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Samsung Fined For Alleged American Porky Pie

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Samsung dips into pocket change for paltry fine for “misleading” resellers to the US government

Samsung has received a light wrap over the knuckles, after the Korean electronics giant was accused of misleading resellers of equipment to the US government.

The allegations centre over which countries Samsung listed as having manufactured its equipment.

Samsung Fine

Samsung agreed to pay a small fine for misleading resellers over where its equipment was made.

“Samsung Electronics America Inc. (Samsung) has agreed to pay $2.3 million (£1.4m) to resolve allegations that it caused the submission of false claims for products sold on General Service Administration (GSA) Multiple Award Schedule (MAS) contracts in violation of the Trade Agreements Act of 1979 (TAA),” the US Department of Justice (DoJ) said.

© Karen Roach - Fotolia (Medium)The US government can only purchase equipment made in the United States, or from countries with which it has an approved trade agreement. According to the DoJ, Samsung allegedly misled resellers between 2005 to August 2013, about where the equipment they were using to fulfill government contracts was actually made.

“The United States alleges that Samsung represented to the resellers, who in turn represented to federal agencies, that the specified products were made in TAA designated countries, generally Korea or Mexico, when the specified products were in fact manufactured in China, which is not a TAA designated country,” said the DoJ.

“It is unacceptable to sell unauthorized foreign electronics to the United States,” said GSA Acting Inspector General Robert C. Erickson. “We expect all companies doing business with the federal government to comply with contracting laws.”

China Distrust

The United States has an increasingly distrustful relationship with both China and with leading Chinese tech firms.

Networking giant Huawei for example has effectively closed down its American presence after scrutiny of US lawmakers and regulators who believe that Huawei’s alleged close ties to the Chinese government make it a national security risk.

In 2012, the US House Intelligence Committee warned that Huawei and ZTE could pose a threat to US national-security interests.

China has hit back however after Edward Snowden revealed the NSA’s global spying activities, and has made life increasingly difficult for Western firms operating in China.

The Chinese government has begun vetting Western technology companies operating in the country, and it has pressured its domestic banks to replace high-end IBM servers with similar equipment manufactured within the country.

It has also banned the procurement of technology from a number of foreign firms, including Microsoft, Apple, Symantec and Kaspersky for government US.

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