Samsung Marine Marketing was fined NT$10 million

According to Taiwan media reports, Taiwan’s “Fair Trade Commission” recently stated in a notice on its website that Samsung violated the principle of fair trade and hired the Navy to debase its competitors’ smartphones on the Internet and maliciously promote their own products. The company was fined NT$10 million (approximately RMB 2,060,000).

In addition, the associated Taiwan Pengtai Company and Shangdeli Company were fined NT$3 million and NT$50,000 respectively. The report also disclosed Samsung’s guidelines for employing the Navy, such as attacks against Samsung’s products, helping Samsung’s marketing, and giving Samsung’s products positive reviews.

HTC: It was indeed discredited before. Although the Taiwan Fair Trade Commission report did not mention the specific name of the Taiwanese company. However, according to previous media reports, HTC is considered a direct victim.

HTC stated in its official Weibo that “in the age of the Internet, cyber naval forces have caused great harm to the normal business order. This is not just a matter of business ethics, but also a lack of restraint mechanisms. It calls on the mainland to be as capable as Taiwan. There is a third party 'fair trade committee'."

However, the relevant person in charge of HTC was still very low-key when interviewed by a reporter from the "Daily Economic News". He also said that he had indeed been stigmatized before, but he did not comment on the matter.

The reporter learned that the case originated in April this year. Some Internet users in Taiwan stated that Samsung hired students to attack HTC products on the Internet through its local agents and recommended Samsung mobile phones. Subsequently, the "Fair Trade Commission" in Taiwan conducted an investigation in August. The investigation finally found that Samsung did present such improper behavior.

In response, Li Yi, secretary-general of the China Mobile Internet Industry Alliance, said in an interview with the reporter of the “Daily Economic News” that Samsung’s extreme marketing methods are not unrelated to the homogenization trend of the smartphone industry. "Innovations in hardware including Apple (525.96, -5.95, -1.12%), Samsung, and Huawei have encountered bottlenecks. In the future, more marketing and channel competition will occur."

However, he believes that this mode of naval marketing is not desirable, nor is it a long-term development plan for the brand.

Samsung’s public data on the employment of Navy forces through public relations companies shows that in 2012, Samsung’s expense in the global PR market was US$558 million, and in 2011 it was US$476 million. According to media reports, in addition to HTC, Samsung did not stop attacks on other competitors, and its spearhead once directed Apple.

CNNMoney columnist Philip Elmer-DeWitt once wrote an article saying that Samsung is very likely to use some people to smash Apple on the Internet. In his article, he commented that Samsung is likely to deploy a large number of professional naval forces in the United States. Within a few hours of the publication of the article, there were actually more than 1,000 feedbacks (and voting). The time for these feedbacks was very concentrated and the tendency was exactly the same, that is, contempt for Apple, articles, and authors.

This secret marketing tool is called "military marketing." Although Samsung is not the first company to carry out this type of marketing, it is only this year that it has been involved in such incidents for the second time.

In August of this year, some developers broke the news that a Korean PR company provided 500 US dollars to its individuals and demanded that it secretly promote Samsung. Subsequently, Samsung acknowledged that this happened. However, in the statement, Samsung stated that this type of behavior is in flagrant violation of the company's guidelines and stated that it will commit to transparent and sincere communication with consumers.

After the regulatory notice from Taiwan’s regulatory authorities was issued, Taiwan’s Samsung Electronics Co., Ltd. also responded that it was deeply regretted that it will take necessary steps to safeguard the company’s reputation and focus on consumers.

Even if the negative continues, Samsung Electronics will continue to refresh its quarterly profit record again this quarter. Its third quarter net profit of 8.24 trillion won (about 7.76 billion US dollars), an increase of 26%. This is the company's seventh consecutive quarter of a record high profit. However, Samsung’s smart phone sales growth slowed down, and the mobile business’s profit margin was also lower than the 19.2% recorded in the same period last year.