Samsung in fraudulent review scandal; ispONE to countersue Kogan

Electronics manufacturer Samsung last week admitted it had paid internet users to criticise phones from rival vendor HTC on various websites.

Leaked documents obtained by taiwansamsungleaks.com show that the company’s marketing firm paid students to write negative comments on social networking and review websites.

The comments included praise for Samsung’s Galaxy Note and Galaxy S3 and criticism of HTC’s One X.

In a statement, Samsung labelled the marketing move as “unfortunate” and said it occurred “due to insufficient understanding of these fundamental principles”.

The company said it has “ceased all marketing activities that involve the posting of anonymous comments, and will ensure that all [Samsung Electronics Taiwan] online marketing activities will be fully compliant with the company’s Online Communications Credo”.

Samsung said its Credo espouses “transparent and honest communications with consumers”.

“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,” the company said.

Taiwan’s Fair Trade Commission (FTC) is now investigating whether the comments constitute false advertising.

If the comments are found to be false advertising, Samsung may face fines of up to TWD$25 million (AUD$812,000) per incident.

ispONE returns fire

The legal dispute between online retailer Kogan Mobile and telecoms distributor ispONE heated up last week, when ispONE revealed it is planning a counterclaim against Kogan Mobile, alleging the retailer breached an agreement by engaging in misleading and deceptive conduct.

Kogan offers mobile services through ispONE, which is a Telstra Wholesale prepaid mobile distributor. Earlier this year, ispONE kicked some of Kogan’s users off its network for what it considered overly high usage, without notifying Kogan.

Kogan offered affected customers a $50 voucher for use on Kogan.com as compensation. The retailer then launched legal action against ispONE for booting the users, saying the distributor breached the agreement the two companies had.

Now, ispONE is launching a counterclaim saying that Kogan engaged in misleading and deceptive conduct by calling one of its mobile plans “unlimited”, leading to the problem of overconsumption by users.

Kogan disagreed, saying ispONE itself used the word “unlimited” in many of its own documents.

“In the service suspension policy, the ISP itself confirms that the service is intended to be an unlimited service,” Kogan’s counsel said.

The presiding judge encouraged the two companies to undertake further mediation, urging them to consider the potential damage to their business relationship and the distracting effect litigation would have.