Samsung Facing Probe for False Advertising in Taiwan

The story of Samsung's response to HTC's new flagship smartphone, the One, seems to be rapidly approaching the "stranger than fiction" category. It's now clear that the fallout from the company's "advertising strategy" may involve legal sanctions since the company is now being probed by Taiwan's Fair Trade Commission for "false advertising."

If found guilty, the company could face penalties of up to 25 million Taiwanese dollars (USD 840,000), making it the third time in recent years that the company has been fined by Taiwanese authorities for its marketing. For those who haven't been following this story as it unfolded over the past week, allow us to provide a brief summary of its events.

Earlier last week, accused the company of engaging in "evil marketing" and released a plethora of documents that supposedly indicated that Samsung's marketing division had hired students to post negative comments about the HTC One on a number of tech / gadget websites that linked to favorably selected benchmark results. Also, it was alleged that the phone experienced a host of problems including, but not limited to, constant crashing.

TSL's allegations were subsequently confirmed on Samsung Taiwan’s Facebook Page. In a statement to the BBC in which the company announced that it had "ceased all marketing activities that involve the posting of anonymous comments." Furthermore, Samsung would engage in employee training to ensure that these events were not repeated, and they promised that “future marketing work would be more in line with its company philosophy of transparency and honesty.”

Though this form of advertising conduct is certainly nothing new, we still cannot fathom why the company, or rather individuals within the company, felt a need to stoop to this level, possibly damaging Samsung's reputation as well as incurring significant legal penalties. After all, Samsung currently holds a comfortable 21.4 percent share of the smartphone market; is expecting the Galaxy S IV to be yet another success; and its rival, HTC, on top of its rather dismal financial results, is even facing problems manufacturing its flagship due to complications with its camera.

CNET has speculated that Samsung may have been "worried" about the "design and build quality of their mobile devices" and "green with envy" over the HTC One's aluminum unibody construction. However, this is hardly a valid reason and can quite easily be addressed by simply adjusting the build of the company's next flagship device, the Note III.

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  • Xalteo
    Even from Samsungs POV that is just damn stupid. It shows us how Badly companies want to obtain market power and keep it, Even to such an extent to pay people to give negative results. But then again not every Company is "Picture perfect" as you can all tell from recent stories from Apple, etc,.