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Samsung under investigation for false advertising about HTC in Taiwan

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Samsung (STOCK)
Samsung (STOCK)

Samsung is under investigation by Taiwanese authorities over allegations that it used deceptive advertising practices in the country, the AFP reports. The company reportedly hired students to write negative remarks online about HTC and to post promotional content for itself. Though it's unclear what the actual content of these messages was, in a statement provided to The Verge, Samsung said that its Taiwanese branch "has ceased all marketing activities that involve the posting of anonymous comments." It believes that the incident was an error due to insufficient training, and that it is not consistent with Samsung's policies.

The AFP reports that the online campaign occurred through a local advertising agency hired by Samsung Electronics Taiwan, and that Samsung could be fined up to NT$25 million ($835,000) if the allegations are upheld. Taiwan's Fair Trade Commission has already fined Samsung at least twice in the past year. The jointly owned company Toshiba Samsung Storage Technology was penalized for price fixing in September 2012 along with LG, Sony, and Philips, and earlier this year Samsung itself was fined around NT$300,000 ($7,670) for misleading advertising of one model of its Galaxy Y Duos.

Samsung's full statement on the incident is below:

Samsung Electronics remains committed to engaging in transparent and honest communications with consumers as outlined in the company’s Online Communications Credo. We have encouraged all Samsung Electronics employees worldwide to remain faithful to our Credo. The recent incident was unfortunate, and occurred due to insufficient understanding of these fundamental principles.

Samsung Electronics Taiwan (SET) has ceased all marketing activities that involve the posting of anonymous comments, and will ensure that all SET online marketing activities will be fully compliant with the company's Online Communications Credo.

We regret any inconvenience this incident may have caused. We will continue to reinforce education and training for our employees to prevent any future recurrence.