Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) could face NT 25 million ($836,000) if its subsidiary in Taiwan will be found guilty of violating fair trade regulations in the country.
Samsung Taiwan is allegedly paying students to post negative comments against its competitors such as Apple Inc. (NASDAQ:AAPL) and HTC Corp (TPE:2498). A report from BBC cited that Taiwanese Fair Trade authorities are investigating Samsung Taiwan for conducting false advertising after receiving a series of complaints.
TaiwanSamsungLeaks, a local site, accused Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) of “evil marketing” as it uses anonymous internet users to post critical comments on rival products. The site published documents allegedly obtained from the marketing firm hired by Samsung Taiwan showing the different comments posted on forums on local gadget sites last year.
One of the users said that the HTC One X Phone was constantly crashing. Other comments suggested that the Samsung Galaxy S3 has a better battery life and graphics than HTC One X.
CNN Money said that a person with the user name The_Truth_Hurts posted more than 2,000 comments against Apple Inc. (NASDAQ:AAPL) on different tech related sites. One of his comments reads, “Apple Inc. (NASDAQ:AAPL) RELIES on POPULARITY to SELL. Once the popularity decreases, they are doomed.” The user told Philip Elmer-Dewitt, author of CNN Money that he was never paid to post negative comments about Apple.
According to Samsung Taiwan, the company has no knowledge about the investigation of the Fair Trade authorities. In its Facebook page, Samsung Taiwan wrote that it stopped all its marketing initiatives involving the posting of comments from anonymous users. The company added that it will ensure that all its future marketing efforts will be more in line with Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) philosophy of transparency and honesty.
Samsung Taiwan wrote, “”Samsung Electronics Taiwan (SET) has ceased all marketing activities that involve the posting of anonymous comments. The recent incident was unfortunate, and occurred due to insufficient understanding of these fundamental principles.” The company added that it will ensure that the issue will not be repeated.
On the other hand, HTC Corp (TPE:2498) stated that it will take appropriate actions to protect the company and its consumers.