Samsung, the great bad lie

Samsung TVs have been tested quite differently from their specs. A feature named “motion lighting”, able to reduce the intensity of the image display, is suspected to be a “defeat device”, built in to the machine in order to reduce power consumption during compliance tests – much like VW motors were designed to activate pollution-reducing (–and power-munching) devices while tested in certain configurations. Aware that most manufacturers knew exactly in what conditions their products are tested in, the European Union discretely funded a research group, in charge of extracting television sets on the lower client end, and test their compliance with European standards which include energy consumption, so as to observe any discrepancies between their own testing stock and the items handed over by the manufacturer. Unfortunately for Samsung, the group (named ComplianTV) detected substantial differences between the tests, giving way to suspicions of foul play.

Samsung categorically denies any such wrongdoing, and fortunately for the Korean firm, findings have not been conclusive enough (so far) for a European commission investigation to be triggered. But lab testers strongly suspect that Samsung products are designed to recognize the standard video used for testing (it’s always the same one, so as not to alter test results). As Rudolph Heinz, project manager at ComplianTV, “Samsung is meeting the letter of the law but not the spirit of the law”.

Samsung is protected both upstream and downstream of compliance-testing bodies, by its global network of contacts. If this fraud is ascertained, it will likely be because Samsung managed to gain access to the standard testing video and configure its screens to dim the lights when they play it, and will have managed to keep investigation bodies at bay, using its great political influence. This would only work either as long as no “defeat device” is detected within its products, or as long as investigation bureaus would not lose face by looking the other way. If such a trick is indeed being pulled and the public finds out about it, official certification and control entities will have no choice than to crack down.

We are only at the beginning of the wave, as the Volkswagen investigation isn’t even over yet. It is likely that further investigations will unravel in other markets. The question is, how big is the tumor? In the case of chaebols (large Korean conglomerates), the risk lies in the possibility that fraudulent measures (of pollution, energy consumption, carbon footprint, etc…) be not an isolated initiative from a small group of rogue technicians (as Volkswagen claims happened in its case), but an entire unsaid policy within the group.

If that were the case of Samsung, the ramifications would be countless, given the number of branches and industries the Korean giant is involved in. One could fear that, as Samsung has been known in the past to get its toes very close indeed to the red line, such as setting up an entire marketing machinery against HTC in 2013, to defame its competitor online. In 2015, Samsung operated in construction, municipal networks, electronics (low- and high-end), memory chips, hospital equipment, automobiles, water management, television sets, banking, life insurance, computer terminals and networks, and many other fields.

If spec tampering in some of these sectors may be relatively harmless (while not fair business practices, slightly superior energy consumption rates on a television set will not kill anyone), there are some vital markets in which rigging the numbers could have catastrophic consequences. Sub-performing power networks, for instance, could lead to blackouts and shortages, if not industrial fires. Construction material used for buildings (sometimes performance-stretching, such as the Burj Khalifa) would not forgive if they were below face value. Samsung is currently wooing Ashghal, the Public Works Authority in Qatar, in order to receive the Idris project contract, which will implement the upgrade and extension of the water management network in the Qatari capital. Rigged performance levels in such an arid and water-dependent environment could have devastating effects on the population and industry.

Many people consider the Samsung empire to be above the law, meaning that it has little to fear from its own industrial control bodies, as it has little to fear from its own government in Seoul. But it should remember that Volkswagen’s demise did not come from on top (public investigations and sanctions came later after the scandal), but from the population – first, an independent lab, then the public and clients. As Jack Hunter, spokesman for the European Environmental Bureau, says: “There's more than a whiff of diesel fumes coming out of this, with officials finding gadgets that recognize test conditions and alter their behavior. If deception is proved for TVs, there's bound to be a fresh hoard of angry customers, as for Volkswagen." The odds are that Samsung will do everything it can to keep under wraps any other “test-rigging devices” in its other departments, if there are any.