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Samsung and LG get fined for fraud on their home turf

You might've not gotten your money's worth
by Neps Firmalan | Mar 16, 2012
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The Korean government and the FTC (Fair Trade Commission) is working overtime to bring their local manufacturers to justice. Why, you ask, and at a time where Apple needs a worthy opponent to prevent the iPad monster from gradually getting too big? The answer: price rigging and fraud. Manufacturers including Samsung and LG plus other Korean carriers are being slapped with a fine of $40.1 million (about P1.7 billion).

Apparently, the government found them to be guilty of conspiring with competitors to charge big money for a product that costs less than that. Typical business practice, right? But this makes consumers think that they're getting a bargain while companies are actually getting bigger profits and sales.

If you still don't get it, it's okay to get a decent profit off of your sales, but to talk to other companies and agree to sell all your devices at a fixed price then that's considered fraud because it harms fair competition. Companies could offer "special promos" which would lead customers to believe that buying the device during the promo period allows them to save more but really, it's priced far less than what the promo price is.

Samsung got the biggest brunt of the million-dollar fine. Its share is about $12.6 million (P541 million); a big amount of money but with their billion-dollar contract with Apple, they should be able to make up the difference in no time. 

As consumers though, we're flabbergasted and angry. As journalists, we can't shake the feeling that we might've also been duped by "promo" offers, and even encouraged consumers to avail of them by writing about it. 

WORDS BY Neps Firmalan
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