Samsung under probe by FTC for false advertising

COUNTERSTRIKE?:HTC said it was considering legal action over claims that Samsung had paid bloggers to post articles criticizing the Taiwanese firm’s products

By Camaron Kao  /  Staff reporter

Tue, Apr 16, 2013 - Page 13

The Fair Trade Commission (FTC) yesterday said it would investigate whether Samsung Electronics Co had violated the Fair Trade Act (公平交易法) amid allegations that the South Korean company had hired people to criticize HTC Corp’s (宏達電) products online.

The commission said it had formally set up an investigation against Samsung after being tipped off by Internet users last week.

Netizens sent the commission a report accusing Samsung of false advertising, saying the firm had paid bloggers to write defamatory statements about HTC’s products.

“We will check and see whether the online articles mentioned in the report can be categorized as advertisements, and whether the information in the articles is misleading,” commission spokesman Sun Lih-chyun (孫立群) said by telephone.

Samsung would be subject to a fine of between NT$50,000 (US$1672.8) and NT$25 million if the commission deemed the move to be false advertising, Sun said.

In addition, HTC can file a lawsuit against the writers of the articles if they contain defamatory remarks, he said.

Local media reported that between April 1 and April 4, Samsung hired writers to open several online accounts as part of a marketing campaign to promote its new flagship Galaxy S4 phone in Taiwan. But some netizens found user of these accounts also attacked products from its rivals.

On April 5, Samsung responded in a statement that several of its employees had misunderstood the basic principles of the company, and that it had decided to stop the practice of posting articles online or responding to any discussion about its products.

HTC yesterday said it was disappointed with its competitor’s behavior and that it was considering legal action against Samsung.

“HTC has always been dedicated to product innovation and design. We may take necessary action to defend ourselves and consumers’ rights,” the company said in a statement.

Additional reporting by Helen Ku