Samsung under investigation by Tawain’s Fair Trade Commission over unethical marketing practices

South Korean company, Samsung has landed up in hot water with Taiwan's Fair Trade Commission due to fabricated internet posts that sought to give it a leg over HTC.

According to Taiwan's FTC it was investigating the matter and could punish Samsung for up to NT$25 million ($835,000) if it was found to be in violation of fair trade rules.

The investigation comes following a local site, called TaiwanSamsungLeaks', accusations of the South Korean adopting "evil marketing" that involved criticising rival products through anonymous internet users.

By way of evidence the site published documents allegedly from Samsung's hired marketing firm cataloguing the different forum posts it made last year on local gadget sites.

The topics included a user complaining of his girlfriend's HTC One X phone constantly crashing, and how Samsung's Galaxy Note phone was superior to HTC's Sensation XL handset.

Benchmark reviews that claimed Samsung's Galaxy S3 outperformed the HTC One X in battery life and graphics had also been posted. Additionally a number of comments tried to praise Samsung.

According to Samsung it had yet to receive a notice from Taiwan's FTC on the investigation, but the company said the "unfortunate incident" did occur.

"Samsung Electronics Taiwan (SET) has ceased all marketing activities that involve the posting of anonymous comments," it said on Tuesday in a statement. The company adheres to "transparent and honest communications with consumers," and is working to prevent the problem from occurring again.

Commentators point out that Taiwanese companies have long looked at tech giant Samsung as a major threat and the battle in recent times had been seeming to tilt in favour of the South Korean company with Taiwan's smartphone, memory chip and display panel taking a hit amid sagging sales.

The sales erosion had come due to competition, some of it from South Korea, as also a weak global economy but had also led to fears in the export-dependent country that Taiwanese firms had been deliberately targeted by Samsung as part of a campaign to undermine their competitiveness in markets around the world.

The sentiment recently found expression in Taiwan's top business magazine Business Today, which ran a cover story last month that accused Samsung Electronics of launching a "Kill Taiwan" effort as also targeting some of the island's leading high-tech companies including Taiwan Semiconductor Manufacturing Co, the world's largest contract chip maker.

However, while Taiwanese companies have been facing a challenge from Samsung, according to some industry analysts perceptions in Taiwan that the South Korean company was setting out to crush Taiwan's lucrative technology industry were wide off the mark.

They point out that Samsung was trying to make inroads in specific areas where it saw a big profit potential and these areas are also where Taiwanese companies had a major stake. They point out that it was not Taiwan as much as its industry sectors that were motivating Samsung.