Taiwan authorities on Thursday slapped a fine of Tw$10 million ($341,300) on Samsung after the South Korean tech giant was found to have paid bloggers and students to attack local rival HTC online.
An investigation by Taiwan's Fair Trade Commission showed that Samsung, through one of its Taiwan units called Opentide, had hired people to write online articles attacking HTC and recommending Samsung cellphones.
The paid writers, and Samsung employees, concealed their status while posting their evaluation reports about One, HTC's flagship cellphone. They highlighted what they described as flaws in the HTC gadgets and played down any negative reports about Samsung products.
"This is the first case of its kind in Taiwan that a company has concealed its genuine status while attacking a rival," commission spokesman Sun Lih-chyun said.
"The deceitful behaviour has negative impacts on market order and violated the fair trade law."
Opentide was fined Tw$3 million and another smaller local advertising agent contracted by Opentide was fined Tw$50,000, according to the commission.
The three companies can appeal.
Samsung Taiwan said it "deeply regrets" the commission's decision but has not yet been formally notified of it. It would not say whether it would appeal.
After the commission started probing the complaints in April, Samsung Taiwan posted a statement on its Facebook page regretting "any inconvenience and confusion from the Internet event".
"Samsung Taiwan has halted all Internet marketing such as posting articles on websites," it said.
Samsung was fined Tw$300,000 by the commission earlier this year for a misleading advertisement about the camera functions on its Galaxy Y Duos GT-S6102, according to Taiwan's state Central News Agency.
According to research firm IDC, Samsung held a 30.3% share of the global smartphone market in 2012, while Apple had 19.1% and HTC 4.6%.