Samsung is being fined $340,000 after allegations arose of the Korean smartphone maker paying people to write fake reviews about competitors like HTC. Apparently the maker of the Galaxy S4 has been cheating a bit, as Taiwan's Fair Trade Commission recently discovered Samsung had been paying people to write positive reviews of Samsung smartphones while posting negative comments about competitors — namely HTC.
The investigation into Samsung's fake review posting started back in April, at which time the FTC shared the allegations about the smartphone maker. According to the FTC, Samsung had a "large number of hired writers and designated employees" going on various Taiwanese forums to post the fake reviews and false comments — positive reviews for Samsung and negative for competitors. The paid reviewers were instructed to "highlight the shortcomings of competing products," while "disinfecting negative news about Samsung products," in something the FTC referred to as "palindromic Samsung product marketing" — also known as "astroturfing." Astroturfing, or paid promotion that is masked to appear like organic conversation, is in violation to the rules of fair trade resulting in Samsung's latest fine.
According to the FTC, Samsung hired at least two third-party marketing companies to do the dirty work of posting fake reviews about competitors; both firms were also fined over $100,000 combined for their part in the fake review scheme.
Though the practice of astroturfing isn't particularly novel in the competitive business world, the problem is this isn't Samsung's first time being caught in this kind of act. A few months ago the smartphone maker was caught up in another allegation of astroturfing. A PR company which was representing Samsung at the time had been caught offering a kind of bribe or payment to developers on Stack Overflow website to help them promote Samsung's Smart App Challenge. The developer contacted was to be paid $500 to post a series of four questions within the forum in order to boost awareness about the Samsung App Challenge, while making it appear as though it were organic conversation as opposed to paid promotions for Samsung.
In addition, earlier this year the Korean smartphone maker was subject to a smaller but still significant fine of $10,000 by the FTC for running misleading advertisements about the camera features of its Galaxy Y Duos handset.
Though it's disappointing to see more allegations of dishonest marketing on the part of the Korean smartphone maker, after the latest fine of $340,000, hopefully Samsung will reevaluate it's marketing strategies and opt for something more acceptable in the future.
Samsung vs. HTC: Samsung cheats, or is it better?
Twitter Response to Samsung Fined For Fake Comments About Competitors
Both individually and collectively, these types of covert marketing are known in the industry as "astroturfing." While Samsung is by no means the first company to engage in astroturfing, it's been caught in the act twice this year alone. In relation to a later case, Samsung told The Verge that it remains "committed to engaging in transparent and honest communications with consumers.
— Duncan Ng (@duncan_ng) October 24, 2013
Wow // Samsung fined again for posting fake product reviews on forums http://t.co/lW7yyQ0jPU — Paul Crolley (@pbcrolley) October 24, 2013
— Brad Kanning (@Brad2524) October 24, 2013
HA! > Samsung fined $340,000 for faking online comments http://t.co/Fp0vxCqKNg — Elaine Huang (@_osculate) October 24, 2013
— Sean Chin (@SeanChin) October 24, 2013
Whoops Samsung, caught being dicks again! http://t.co/QX0K6EryOt — Rat Fascal (@MrPSB) October 24, 2013