Kurt Eichenwald at Vanity Fair has a story on the Samsung-Apple patent war.
It’s focused largely on Samsung. Unlike most stories about Samsung, which have been overwhelmingly positive, Eichenwald’s story is not flattering.
Eichenwald says Samsung has historically skirted, and in many cases broken, the law to achieve success.
- Sam Baxter, an attorney who represented Samsung in the past, said, “They never met a patent they didn’t think they might like to use, no matter who it belongs to … I represented [the Swedish telecommunications company] Ericsson, and they couldn’t lie if their lives depended on it, and I represented Samsung and they couldn’t tell the truth if their lives depended on it.”
- In 2011 and 2012, Samsung was fined $US32 million by the U.S., $US21.5 million by South Korea, and $US197 million by the E.U. for conspiring with its competitors to fix prices for cathode ray tubes that power TVs.
- Samsung did the same thing with LCD screens. It conspired with Hitachi and Sharp to raise LCD screen pricing. Apple caught wind of this and alerted the authorities. Samsung turned in its co-conspirators, according to Vanity Fair, to get leniency. It still had to pay hundreds of millions to settle that case.
- Samsung was also caught in a price-fixing conspiracy for dynamic random-access memory, or DRAM, which is used in computers. Samsung had to pay a $US300 million fine, and Eichenwald says “Six of its executives pleaded guilty and agreed to serve sentences of 7 to 14 months in American prisons.”
- Samsung’s former top legal officer, Kim Yong-chul, accused the company “of engaging in bribery, money-laundering, evidence tampering, stealing as much as $US9 billion, and other crimes,” says Eichenwald. There was an investigation, but nothing came of it.
- Eichenwald has a list of instances where Samsung copied a rival’s technology. The rival sues Samsung and it just countersues until its products are blocked, at which point it settles.
These paint a pretty damaging picture of Samsung’s reputation, but nothing in the story is as jaw dropping as the following.
One day in March 2011, cars carrying investigators from Korea’s anti-trust regulator pulled up outside a Samsung facility in Suwon, about 25 miles south of Seoul. They were there ready to raid the building, looking for evidence of possible collusion between the company and wireless operators to fix the prices of mobile phones.
Before the investigators could get inside, security guards approached and refused to let them through the door. A standoff ensued, and the investigators called the police, who finally got them inside after a 30-minute delay. Curious about what had been happening in the plant as they cooled their heels outside, the officials seized video from internal security cameras. What they saw was almost beyond belief.
Upon getting word that investigators were outside, employees at the plant began destroying documents and switching computers, replacing the ones that were being used — and might have damaging material on them — with others.
A year later, Korean newspapers reported that the government had fined Samsung for obstructing the investigation at the facility. At the time, a legal team representing Apple was in Seoul to take depositions in the Samsung case, and they read about the standoff. From what they heard, one of the Samsung employees there had even swallowed documents before the investigators were allowed in. That certainly didn’t bode well for Apple’s case; how, the Apple lawyers said half-jokingly among themselves, could they possibly compete in a legal forum with employees who were so loyal to the company that they were willing to eat incriminating evidence?
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