FTC fines Samsung for obstructing probe

The Fair Trade Commission has been investigating whether Samsung Electronics has been excessively charging Korean consumers for their mobile phones.

Korea’s anti-trust regulator has fined technology giant Samsung Electronics 400 million won (about $354,000) for obstructing an investigation into whether collusion took place between the company and wireless operators to fix prices of mobile-phones, thereby defrauding consumers. It marks the biggest fine ever levied by the watchdog for such charges.

Security guards at a Samsung Electronic’s plant in Suwon, Gyeonggi Province, barred investigators from entering during a raid last March and destroyed critical evidence, the Fair Trade Commission (FTC) announced Sunday. The investigators were collecting data to determine if handsets were excessively expensive here while sold for much lower prices abroad.

Investigators were prevented from entering the Samsung plant for about half an hour, during which time employees destroyed important documents and switched computers. Investigators were only able to enter the premises after calling in the police.

The FTC issued a 200 million won fine for obstructing the investigation and another 100 million won for submitting fake documents. It also added a 50 million won fine for two company executives who gave the orders to obstruct the probe.

These fines are the highest according to related laws for companies attempting to hinder, refuse or dodge FTC investigations.

They exceed the 340 million won penalty given to CJ Cheil Jedang, Korea’s top food company, and the FTC said the heavy penalty was due to Samsung Electronics’ systematically obstructing their investigation stemming from management’s orders.

“Samsung employees systematically responded to our probe as if they had been trained to prepare for such events,” an FTC official said, citing internal reports obtained from Samsung. “It also turned out executives were behind the employees barring our probe.”

In an internal report submitted by the security guards, they received an order to prevent the investigators from entering the facility, and in another report by one of employees, they replaced three personal computers at the request of a manager from the general affairs department, the official said.

He added the agency secured video clips from a surveillance camera installed in the facility, which showed employees removing documents right after they were informed of the investigation.

The FTC pledged to take stern action against any activity obstructing the probe.

“We will take every countermeasure to root out illegal attempts to tamper with our investigation,” the official said. “We will not only levy heavy fines but also closely monitoring such firms.” <Korea Times/Kim Tae-jong>

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