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Samsung Fined for Paying People to Criticize HTC's Products

b_250_0_16777215_00_images_obgrabber_2013-10_b602d4d232.jpgAmazon.com (NEW YORK) -- If you're buying a new smartphone or laptop, chances are you look up Internet reviews and customer ratings to figure out what device is best for you. But you can't always believe everything you read online. Earlier Thursday, Samsung was fined $340,300 by Taiwan's Fair Trade Commission for paying people to post messages online that attacked HTC products while praising Samsung's.

The site lists nearly 4,000 examples of these types of attacks, with many originating on the Chinese message forum Mobile 01. People on Mobile 01 are allowed to express their love of Samsung or dislike of HTC, but Samsung explicitly paid them to make these types of posts, regardless. This strategy is also known as astroturfing because it imitates a grass-roots campaign, but it's artificial.

Sun Lih-chyun, a spokesman for the Taiwan FTC, said that Samsung's astroturfing was the first case of its kind in the country. "The deceitful behavior has negative impacts on market order and violated the fair trade law," he said, as reported by the wire news service AFP.

"We are disappointed that the Taiwan FTC has decided that we have violated the Fair Trade Act based on online marketing activities," said a spokesman for Samsung. "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."

Astroturfing doesn't just occur with companies overseas. Recently, the online reviews site Yelp sued the McMillan Law Group in San Diego for astroturfing when it created fake positive reviews from nonexistent clients.

Sinan Aral, an associate professor of IT and marketing at the Massachusetts Institute of Technology, said the effects of those fake reviews might be felt long after they're removed. His research found that positive reviews, regardless of whether they're fake or genuine, snowball into more positive reviews. "It has this kind of insidious effect," he told ABC News. "Yelp might go and pluck those fake reviews out, but all of the subsequent reviews are influenced to be more positive."

So what happens if a business in the states gets caught astroturfing? While Yelp instituted its own policies, customers can also choose to report it to the Better Business Bureau.

"Online reviews may represent a new medium, but the principles of honest advertising are longstanding," said Katherine Hutt, a spokesperson for the Better Business Bureau. "The Federal Trade Commission has had guidelines in place for nearly 40 years that make it clear that astroturfing is an unacceptable business practice. Ultimately, only businesses that meet our standards can remain accredited by the Better Business Bureau."

While Aral's research also says that fake negative reviews don't spiral into more negative reviews because of an online community's tendency to neutralize negative feedback, he says that it's important for all reviewers to be honest. "The bottom line is that ratings and consumer feedback is a centerpiece of e-commerce," he said. "We have to be really attuned and sensitive to detecting fraud."

Copyright 2013 ABC News Radio

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