We know that fake online reviews are a bad idea. Businesses that solicit paid reviews, or those that write positive, but fake, reviews on their own are at risk of Yelp alerts, legal trouble, and even FTC action. But there’s an entire other category of fake reviews that can launch a firestorm on your reputation: fake negative comments about competitors.
No one knows about the woes of fake negative reviews better than Samsung, which was just fined a whopping $340,000 for paying writers, bloggers, and students to criticize competitor HTC’s products. The Taiwan Fair Trade Commission identified almost 4,000 different examples of forum messages where users attacked HTC products and praised Samsung’s cell phones. Many of the messages appeared on the Chinese message board Mobile 01 and were placed by a third party marketing company working for Samsung.
In addition to fake negative reviews against HTC, the commission found evidence of “disinfection of negative news about Samsung products” and “palindromic Samsung product marketing,” as well as fake positive reviews of Samsung products.
While sharing a love of Samsung and a dislike of HTC is allowed online, fake paid posts both negative and positive are not. False grassroots campaigns such as Samsung’s are known as astroturfing, and they’ve been a scandal among major companies for years, with notable U.S. astroturfers including Philip Morris, General Electric, and the National Hockey League. Though this is a common (but illegal) practice in the U.S., this is the first case to hit Taiwan.
Taiwan Fair Trade Commission spokesman Sun Lih-chyun commented:
“This is the first case of its kind in Taiwan that a company has concealed its genuine status while attacking a rival. The deceitful behaviour has negative impacts on market order and violated the fair trade law.”
Samsung hasn’t had much to say about the fine. Perhaps they realize that they’ve said enough? In a statement, a spokesman for Samsung shared:
“We are disappointed that the Taiwan FTC has decided that we have violated the Fair Trade Act based on online marketing activities. Samsung Electronics Taiwan is carefully reviewing the decision and will take all necessary steps to protect our reputation as a company which values its customers.”
Samsung has also called off all Internet marketing activities, including posting articles on websites.
This is not Samsung’s first incident with Taiwan’s Fair Trade Commission. It’s not even the first one this year. In January, Samsung was fined the U.S. equivalent of $10,000 for a misleading advertisement about its Galaxy Y Duos. The FTC discovered that online and catalog advertisements claimed automatic focus and flash functions, but the phone does not have these features.
Where does Samsung go from here? An apology to its customers would be a good start. But perhaps the best policy from here on out is one of honesty and respect for competitors. We’ve seen time and time again that fake reviews of any kind, both positive and negative, are always a bad idea. It’s become too easy to catch bogus posts, and high profile companies like Samsung are especially at risk of being identified as cheaters. With multiple fines and lawsuits, government agencies both U.S. and foreign have made it perfectly clear that this kind of behavior is not acceptable. When will companies catch on to the idea that fake online reviews just don’t pay?