Last October we posted a report titled "A Historical List of Samsung's Trickster Ways" that outlined Samsung's unethical history. Today a report from Vanity Fair looks at Samsung's history of ruthless business tactics of patent infringement and notes that while Apple will win some battles, they'll lose the war. The report goes on to quote an ex-Samsung lawyer who stated that Samsung "couldn't tell the truth if their lives depended on it," and that loyal executives went so far as to eat incriminating evidence to save their company. Yes, this is behaviour resembling that of a criminal cult instead of an international business. But to the mindless, Samsung is the new Robin Hood of our times. No wonder they spend billions in bribery, oh I mean marketing. It all makes sense now.
The new report notes that Samsung's methodology is to countersue, delay, lose, delay, appeal, and then, when defeat is approaching, settle. Sam Baxter, a patent lawyer who once handled a case for Samsung stated in the Vanity Fair article that appears in the June edition of the magazine, that Samsung "never met a patent they didn't think they might like to use, no matter who it belongs to."
Baxter who once represented Ericsson stated that Ericsson "couldn't lie if their lives depended on it. On the flipside, Baxter also represented Samsung and noted that "they couldn't tell the truth if their lives depended on it."
The article goes through Samsung's history of copying other leading technology companies with inferior products, cheap knockoffs and illegal price fixing. The first products known to have been the focus of one of Samsung's major price-fixing conspiracies were cathode-ray tubes (C.R.T.'s), which were once the technological standard for televisions and computer monitors. According to investigators in the U.S. and Europe, the scheme was quite structured. The scheme was eventually exposed, and over the course of 2011 and 2012, Samsung was fined $32 million in the U.S., $21.5 million in South Korea, and $197 million by the European Commission.
The success of the C.R.T. conspiracy apparently sparked similar schemes such as the one regarding LCD displays. Samsung knew that their next conspiracy was going to blow up in their face and so "Samsung ran to the Justice Department under an anti-trust leniency program and ratted out its co-conspirators. But that didn't lessen the pain much—the company was still forced to pay hundreds of millions of dollars to settle claims against it by state attorneys general and direct purchasers of L.C.D.'s." Samsung ratted out its co-conspirators in-part because they knew Apple was going to file a formal complaint they knew would be taken seriously.
Yet while the LCD conspiracy was playing out, Samsung was already in law enforcement's sights: sometime earlier a co-conspirator in another criminal price-fixing conspiracy had given up Samsung. That scheme, beginning in 1999, involved Samsung's huge business for dynamic random-access memory, or DRAM. In 2005, Samsung agreed to pay $300 million in fines to the U.S. government. Six of its executives pleaded guilty and agreed to serve sentences of 7 to 14 months in American prisons.
In 2007, its former top legal officer, Kim Yong-chul, who made his name as a star prosecutor in South Korea before joining Samsung, blew the whistle on what he said was massive corruption at the company. He accused senior executives of engaging in bribery, money-laundering, evidence tampering, stealing as much as $9 billion, and other crimes. In essence, Kim, who later wrote a book about his allegations, contended that Samsung was one of the most corrupt companies in the world.
In January 2008, government investigators raided the home and office of Lee Kun-hee, the chairman of Samsung, who was subsequently convicted of dodging some $37 million in taxes. He was given a three-year suspended sentence and ordered to pay $89 million in fines.
Samsung's dirty schemes just continued. Kodak also got fed up with Samsung's shenanigans. It filed suit against the Korean company, contending that it was stealing Kodak's patented digital imaging technology to use in mobile phones. Once again, Samsung countersued and agreed to pay royalties only after the International Trade Commission found for Kodak.
Samsung Executives Eat Incriminating Evidence
One of the stories that Vanity Fair recounts was an incident 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?
If you have the time, the Vanity Fair report covers details of Apple's Purple Dorm, the iPad and the Galaxy Quest that are really worth reading.
In the end, it's really difficult to understand how smart North Americans could in good conscience choose a product from a company whose past is full of thievery, money laundering and stealing technology outright from those who legally own patents for it. Even when they're caught, Vanity Fair makes it clear that their tactic is to countersue, delay, lose, delay, appeal, and then, when defeat is approaching, settle. They're conduct and actions steals profits from US Companies like Apple and could result in lost jobs. They do it to simply to enrich themselves. They certainly don't do it for the "poor consumer."
Yet somehow Androiders continue to champion these thieves believing all the while, that Apple is the criminal in all of this. Even when it's documented history, even when they're found guilty in a US Court of law, they simply choose to look the other way. Now, how upside down can reality get?
Side Note: As much as I appreciated Sam Baxter's input into the Vanity Fair article, it strikes me as a little odd. Wouldn't his commentary be considered a breach of confidentiality or client privlege if he really worked for Samsung at some point?