South Korea's antitrust regulator said on Tuesday it has decided to impose a preliminary fine of 20 billion won (about $15.1 million) on Samsung Electronics Co., Ltd. for misleading advertising that concealed a feature limiting the performance of its Galaxy S21 and S22 series smartphones in gaming scenarios.
The Korea Fair Trade Commission (FTC) decision covers the two smartphone series that Samsung launched in 2021 and 2022 respectively, as well as the Galaxy Tab S8 series tablets released in 2022.
According to the KFTC, the South Korean tech giant advertised its products as having outstanding gaming performance but failed to disclose the fact that when users launch certain high-load gaming applications, its "Game Optimization Service" (GOS) forcibly imposes preset performance limits.
GOS is a thermal management system for gaming applications. Under its policy for specific games, the system caps the maximum performance of the CPU and GPU regardless of the device's temperature or other conditions at the time.
The KFTC said these restrictions could cause screen freezing, lag and reduced image quality during gameplay.
"Around 2021, when Samsung Electronics began running such advertisements, high-end PC games were being ported to mobile devices, and the market for high-end smart devices capable of delivering high performance was growing rapidly," the KFTC said.
"Gaming performance is one of the most effective indicators of a high-end smart device's capabilities, demonstrated through fast screen transitions and detailed graphics. As a result, many smart device manufacturers highlighted gaming performance in their advertising," the KFTC noted.
The KFTC said that in such a market environment, consumers often weigh gaming performance when deciding whether to buy a high-end device.
The regulator further pointed out that between 2021 and 2022, Samsung Electronics used marketing slogans such as "the fastest 5-nanometer application processor (AP) in a Galaxy device, letting you race through games" and "the ultimate mobile gaming experience — a 120Hz display delivering smooth screen transitions and instant touch response."
However, the KFTC noted that GOS limits performance regardless of the device's state, and Samsung Electronics highlighted the gaming experience without disclosing these restrictions.
The regulator said such misleading marketing hampered consumers from making informed purchasing decisions and constituted "deceptive labeling or advertising" under the Act on Fair Labeling and Advertising.
The KFTC said the latest decision is significant because it reaffirms companies' obligation to clearly inform consumers of important factors that affect performance when emphasizing certain features in advertising.
Meanwhile, Samsung Electronics released a software update in March 2022 that allows users to lift the performance restrictions.
Comments