The Fair Trade Commission (FTC) yesterday fined Samsung Electronics Taiwan Co NT$10 million (US$340,000) for hiring online writers to promote its products without identifying themselves as employees working for its public relations company.
OpenTide Taiwan (鵬泰), the public relations company consigned by Samsung Taiwan to market its products, was fined NT$3 million, while Sales and Profit International Co (商多利), the firm subcontracted by OpenTide to carry out the job from March to May last year, was fined NT$50,000, the commission said.
The three companies violated Article 24 of the Fair Trade Act (公平交易法) by doing “deceptive or obviously unfair conduct that is able to affect trading order,” the commission said, adding that it was the first time it has penalized companies for such behavior.
The commission found that from 2007 to last year, OpenTide Taiwan hired online writers to post articles to clarify negative comments about Samsung’s products, introduce the firm’s new products and compare them with those of other companies on the Mobile 1 online forum, without making readers know they are being paid for their articles.
The commission traced about 200 Internet accounts and collected evidence of money flow between OpenTide Taiwan and the online writers, and “a certain number” of writers admitted receiving money from OpenTide Taiwan, commission spokesman Sun Lih-chyun (孫立群) said.
Sun said Samsung Taiwan was aware of OpenTide Taiwan’s conduct, as OpenTide Taiwan furnished Samsung with weekly and monthly reports on the hottest topics on social networks related to Samsung, the number of articles posted online, general comments about Samsung’s products and the direction that future articles about the company should take.
OpenTide Taiwan is a subsidiary of OpenTide Hong Kong, and Samsung Electronics Co is a major shareholder of the Hong Kong company, the commission said.
The commission said OpenTide Taiwan should stop its actions immediately and that it would continue to monitor its conduct.
“Online writers should make it clear whether they receive money from companies to write about their products,” Sun said.
Although some online writers hired by OpenTide Taiwan compared Samsung’s products with those of HTC Corp (宏達電), Samsung Taiwan’s action cannot be defined as defamatory because HTC refused to clarify allegations posted by online writers hired by OpenTide Taiwan, Sun said.
In response, Samsung Taiwan said in a statement that it is “disappointed by the commission’s ruling” and “will review the FTC’s report and take appropriate actions when necessary.”
As a company of integrity, Samsung Taiwan will continue communicating with customers, it said.
In January, the commission fined Samsung NT$300,000 for a misleading advertisement about the camera functions on its Galaxy Y Duos GT-S6102 phone.
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