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HOW STUFF WORKS / INDUSTRY

Samsung Slammed By Court For Slandering LG

By Wire Service | Tuesday | 30/05/2006

Samsung Electronics has suffered a court defeat for slandering rival, LG Electronics, in TV, catalogue and pamphlet advertising.

This is the same company has has seen its Chairman questioned over allegations that Samsung provided illegal campaign funds to Korean Presidential candidates ahead of the 1997 election. The company has also had Executives jailed in the US for price fixing and the company fined millions for the same offence.

The Seoul Central District Court has ordered Korea's largest electronics appliance maker to retrieve the materials containing unfair performance comparisons and abusive expressions from its retail stores in South Korea. The verdict said the wording used in the leaflets are giving "A negative image to consumers,'' and such activities "cannot be justified.''

LG, the second largest digital TV seller, had filed a request with the court in March, asking it to stop Samsung Electronics from using advertisements and product catalogues which are "Unfair, false and abusing.'' In its suit, LG argued that Samsung -- the world's leading plasma display panel (PDP) and liquid crystal display (LCD) TV maker -- purposefully distorted the performance of LG's PDP TVs in its product catalog.

The catalog described LG's popular "Time Machine'' TV as being only good for 20,000 hours of operation, which is shorter than the 50,000 hours which LG claims. The catalog also described the noise level of LG's TV sets as 3.2 times higher than similar Samsung products, mocking the former as an electric fan.

On Monday, Samsung said it had already withdrawn the controversial materials when LG filed the suit in March. However, LG insisted Samsung used the pamphlets up until last week. "We found evidence of Samsung using the materials, even a day before the trial,'' an LG spokesperson said by phone. "If Samsung had stopped using them, the court wouldn't have had to give such a verdict. It is obvious that the unfair ads have been circulating at Samsung stores.''

Samsung has been downplaying the issue, saying it is a widespread industry practice to make an arbitrary comparison in advertisements of electronic appliances. It also said it was LG that first began the spat over the performance of the digital TVs. "They (LG) first mocked us in December, by describing a Samsung TV as a heating stove,'' Samsung's public relations official said, though they didn't specify in what material such an expression had been used.

It is not the first time for Samsung to be ordered to correct advertisements. Last year, LG and Samsung had a spat over the performances of their washing machines. Samsung touted its silver-particle technology as being at a higher level than similar sterilization methods of other companies. After LG and other companies protested, the Korea Consumer Protection Board ruled the advertisement was exaggerated, dealing a blow to Samsung's credibility.

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