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24 October 2013 Last updated at 04:58 ET

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Samsung Electronics apologises to Chinese consumers

There were allegations that some of Samsung's phones were not working properly Continue reading the main story

Related Stories • Starbucks prices criticised in China • China fines infant formula companies • Was Apple right to apologise in China? Samsung Electronics has apologised to Chinese consumers after a report carried on China's state TV claimed some of its phones were malfunctioning. The report alleged the phones were crashing due to faulty memory chips and criticised its repair policies. Samsung, which generates nearly 14% of its overall revenue from China. said it would provide free repairs for the seven models mentioned in the report. In a separate development Samsung was also fined by Taiwanese authorities. Taiwan's Fair Trade Commission levied a fine of fined 10m Taiwanese dollars ($340,000; £210,000) over allegations that Samsung had paid money to people to criticise rival's products. Growing scrutiny China is the world's second largest economy and the most populous country, The combination of a growing economy, rising income levels and a large consumer base has made it a key market for leading global firms. However, as foreign companies continue to grow their business in China, they have come under increased scrutiny.

Samsung, which is the latest foreign firm to be criticised in the Chinese media, said in statement that it "sincerely apologises" to Chinese consumers for inconveniences caused by the company's "management problems" and that it welcomed the media scrutiny. The models mentioned in the China Central Television (CCTV) report on Samsung, which was aired earlier this week, include the Galaxy S3 and the Note2 phones. Earlier this week, a separate report on CCTV claimed that Starbucks, the world's largest coffee chain, was charging higher prices in China than in other major markets. It alleged that Starbucks earned higher margins in China due to its pricing. In April, Apple's chief executive Tim Cook apologised to Chinese consumers following two weeks of criticism by state-owned media over its repair and warranty policies, The media accused the firm of arrogance, greed and of "throwing its weight around". Taiwan trouble The fine in Taiwan came after an inquiry by the Fair Trade Commission alleged that Samsung had hired the services of an advertising firm, OpenTide Taiwan, to help it with online marketing. Sun Lih-Chyun, vice chairperson and spokesman, told the BBC's Cindy Sui in Taipei that its investigations had indicated that OpenTide had hired students and bloggers to post remarks about Samsung and also criticise rivals' products. He added that OpenTide gave weekly and monthly reports to Samsung, on online remarks, which indicated that Samsung was fully aware of what was going on. OpenTide was also fined 3m Taiwanese dollars by the commission for its role. The allegations had first come to light in April this year. At that time, Samsung had called the incidents "unfortunate" and said they had gone against the company's "fundamental principles". In early 2013, Samsung was fined by Taiwanese authorities for an advert that misled consumers about the camera on the Galaxy Y Duo.

More on This Story Related Stories • Starbucks prices criticised in China 21 OCTOBER 2013, BUSINESS • China fines infant formula companies 07 AUGUST 2013, BUSINESS • Was Apple right to apologise in China? 02 APRIL 2013, BUSINESS

From other news sites • Sky News Australia Samsung gives apology in China 1 hr ago • In rerun of Apple debacle, Samsung apologizes in China after state media criticism 2 hrs ago • Yahoo! UK and Ireland Samsung apologises after Chinese media criticism of smartphones 3 hrs ago • Business Recorder Samsung apologises after Chinese media criticism 3 hrs ago • Bloomberg Samsung Apologizes After China State TV Report on Handset Flaws 10 hrs ago • About these results

Related Internet links • Samsung The BBC is not responsible for the content of external Internet sites

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