Caught! Samsung Investigated for Placing Fake Reviews on the Web

Photo of girl caught with hand in cookie jarSamsung Electronics Co., one of the fastest growing and most popular electronics brands in the world, is the subject of an investigation by the Taiwan Fair Trade Commission that is acting on tips it received that the company’s marketing department has allegedly been placing, or contracting for, fake reviews on the web. These reviews, which were said to be positive on Samsung products and negative on Samsung competitors, were not visibly identified as paid or sponsored reviews.

See what Samsung meant when it said this was a simple case of “insufficient understanding”…

Samsung, while widely diversified in the amount of products they offer, has been focused on growing their market share of smartphones, a category once dominated by Apple, Inc. with significant additional share going to Nokia. Another fast rising up-and-comer, Taiwan’s HTC Corp., has recently struggled to maintain its growth and launched a new phone, the HTC One, just last month.

Thanks to creative design and aggressive marketing, Samsung has continued to grow its market share…blowing by the other competitors. However, competition is strong in the smartphone game – and marketers will do just about anything to further the cause of their company. Like HTC, Samsung announced the launch of their highly anticipated Galaxy S4 just last month – ratcheting up the competition even more.

Suspicious reviews from anonymous ‘consumers’…

Earlier this month, Taiwan’s Fair Trade Commission received complaints that a rash of product reviews have appeared, supposedly posted by anonymous consumers, that were positive for Samsung smartphones and negative for any Samsung competitor smartphone. Apparently enough consumers emerged to complain about what they felt were “suspicious” reviews, that Taiwan’s FTC launched the investigation.

In a report by Bloomberg, Sun Lih-Chyun, a commissioner for the Taiwan Fair Trade Commission, confirmed the investigation. Samsung responded with a statement which called the situation “unfortunate.”

Sun told Bloomberg that the company has contacted HTC for any information they may have. However, at this point, the commission has not formally spoken with executives at Samsung.

Explanation from Samsung sounds like an admission…

Although Samsung has not specifically admitted or denied the allegations, they did release a statement that is sure to raise eyebrows as it appears to confirm the activities. In the statement, Samsung says that this situation “occurred due to insufficient understanding of these fundamental principles” of honest communications with consumers.

“Samsung Electronics Taiwan has ceased all marketing activities that involve the posting of anonymous comments,” Samsung’s statement said.

Taiwan’s FTC is said to be trying to determine whether Samsung has violated any pertinent laws or regulations regarding false advertising. Likewise, the commission is also attempting to determine if the electronics giant is guilty of defamation.

Serious penalties at stake…

The penalty for false advertising is NT$25 million ($837,000) per incident, commissioner Sun told Bloomberg. But worse than that, if the commission finds that Samsung engaged in defamation, the case could become a criminal prosecution with penalties of up to two years in prison for each incident.

In a separate statement from Samsung competitor HTC, the company said: “We are disappointed that a competitor would resort to misleading consumers to discredit our innovation.

About Ted

A sales and marketing specialist - primarily in the technology industry - I've experienced a sort of "circle of life" in business. I've been a mass merchant retailer, a specialty retailer, a specialty manufacturer, a large volume manufacturer, a distributor, and even represented sales representatives. Now the owner of a marketing company that works with a variety of businesses on improving their strategic marketing and business development - I analyze issues from all angles to develop holistic solutions.

Comment on this Post

Your email address will not be published. Required fields are marked *


We welcome your comments and encourage you to participate by offering your insights and thoughts on our posted stories. However, in some instances, your comment may be subject to editing or deletion if they violate one or more of the following points.

    --First, while we support vigorous debate and are generally quite tolerant of even controversial thoughts and ideas - we do not tolerate rudeness, profanity, or personal attacks.
    --Second, please stay on topic with your thoughts.
    --Third, while links to relevant content are OK, we do not allow self-promotion or SPAM.

The owner of this site reserves the right to edit or delete any comments submitted to this site without notice. This comment policy is subject to change at any time.

This site uses Akismet to reduce spam. Learn how your comment data is processed.