Battle For Home Appliance Market Share Becomes Actual Battle, With Execs Vandalizing Machines And Indictments Handed Down

from the La-Cosa-Nostra:-Large-Appliance-Division dept

Tue, Feb 17th 2015 9:00am — Tim Cushing

We're used to corporate battles over product placement, intellectual property and market share, but they usually take the form of courtroom disputes, targeted advertising and bland mission statements. But two major consumer electronics companies' recent fight has not only found its way into a courtroom, but also involves the alleged deployment of Mafia-esque tactics.

Last fall, Samsung placed some of its washing machines in a German shopping mall as a teaser/advertisement for its appearance at an upcoming trade show. That's when things turned surprisingly unprofessional.

Samsung accused LG executives of breaking the doors of several of its washing machines at two Berlin shopping centers in what they claim was an attempt to gain a competitive advantage in the cutthroat appliance business, which market-research firm Euromonitor International says was worth about $400 billion globally last year.

LG, of course, has denied this. It doesn't deny the fact that it sent a small team of executives to the mall to check out the competition. It also doesn't deny that its execs did a little stress testing of the washing machine's door, something that was captured by the mall's security cameras. (See video below.)

Samsung claims LG's personnel "broke" the washing machine door deliberately in order to sabotage Samsung's reputation ahead of the upcoming show. LG claims that if the door was indeed broken by its employees' downward shoves, it's only because Samsung's washer doors are crap.

This dispute eventually made its way from mall display to the Korean courts. LG tried to head off Samsung's lawsuit by offering to purchase the washing machines (which retail for more than $2700 a piece). Samsung replied with a curt "Thanks, but see you in court."

The end result? An indictment of the executives involved in last year's Man vs. Competitor's Machine shoving match.

A top LG Electronics Inc. executive has been indicted by Seoul prosecutors for allegedly vandalizing several high-end washing machines manufactured by rival Samsung Electronics Co.

An LG Electronics spokeswoman said Sunday that Jo Seong-jin, head of the company’s home-appliance division, has been indicted on charges of deliberately damaging four Samsung “Crystal Blue” washing machines ahead of a trade show in Germany last September. Mr. Jo has also been charged with defamation and obstruction of business, she said.

Two other company executives have been indicted on similar charges over the same incident, the spokeswoman said.

LG had countersued for defamation and evidence tampering (it claims Samsung accessed the washing machines during their trip back from Berlin to be presented in court), but that will no longer move forward as a result of this court decision.

LG is now fighting back via its own corporate channel. It uploaded a video containing the questionable "examination" performed at the German shopping center, along with comparative demonstrations of everyday usage that supposedly exert as much strain on washing machine doors as Mr. Jo did. For reasons only known to LG, the video contains the sort of electronic library music more suited for painfully boring 5th period educational films than corporate exculpatory efforts… so heads up on that.

Samsung has responded to LG's video by claiming it's "arbitrarily edited," pointing to the court decision as evidence enough that its rival deliberately broke the displayed machines.

Fighting for a larger share of a $400 billion market is never going to be pretty, but until now, these companies have managed to keep these efforts hidden from the public. Sabotaging a competitor is generally the sort of thing done in secrecy, behind closed boardroom doors, rather than in full view of the general public and Samsung employees. Maybe the market is too large to keep the gloves on and the cutthroat tactics obscured. Any portion of $400 billion is a whole lot of money and the potential gain of a few points in market share could be tantalizing enough to persuade large companies to put their reputation on the line with the open appearance of mob-level impropriety. ("Nice washing machine you got here. Be a shame if the door didn't close properly.")

Money -- especially that much money -- does strange things to normally logical people. In the underrated Way of the Gun, when a long-time criminal is asked why he would do something terrible for a motivator as supposedly weak as "just money," he responds:

Not money, 15 million dollars. Fifteen million dollars is not money, it's a motive with a universal adaptor on it.

What's a few $2700 washers (and a few indictments) in a $400 billion market? Not enough to be of consequence and certainly not enough of a deterrent to head off future brute force attacks on competitors. I, for one, welcome our corporate giants' embrace of low-level thuggery, which is more interesting and more relatable than a string of noncommittal and obfuscatory sentences hidden in the back pages of quarterly SEC filings. I'm looking forward to a world where demographic groups are captured not via Super Bowl ads and targeted marketing, but by competitors tripping "check engine" lights in competitors' showroom vehicles or pinstriped execs hacking the home screen of the latest connected home thingie to display nothing but a steady stream of porn shots.

This is the future we consumers deserve. Too many products fail to excite buyers, what with a preponderance of me-too styling and features. If the products don't move us, maybe the companies themselves will. It's time to be wowed by the gutsiest display of executive-level disregard for corporate propriety. We need our business leaders to step up and vow to be the next Suge Knight or Broad Street Bullies of their respective fields. Even if LG's execs didn't actually break Samsung's washer doors, they should be commended for their willingness to stroll into a public place and give every appearance that they were doing exactly that.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: competition, indictments, korea, vandalism, washing machines
Companies: lg, samsung

31 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 17 Feb 2015 @ 9:13am

Vandalize with care
[ link to this | view in thread ]
KoD (profile), 17 Feb 2015 @ 9:13am

...
Obstruction of business...? Not entirely sure what that means, but damn if that isn't dystopian sounding.
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 9:17am

" I, for one, welcome our corporate giants' embrace of low-level thuggery,"

What's next sitting around in car's and running over people then sticking cyborg enhancements into then.
[ link to this | view in thread ]
Yes, I know I'm commenting anonymously, 17 Feb 2015 @ 9:23am

I wonder if the washing machine reported the forces on its door to its corporate overlords. After all, that is what Samsung's TVs would have done.
[ link to this | view in thread ]
radix (profile), 17 Feb 2015 @ 9:24am

Re: ...
IANAL, but I've heard it compared to the more western idea of Tortious Interference.
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 9:24am

There can only be one.... but aren't they meant to use swords to decapitate each other?
[ link to this | view in thread ]
Derek Kerton (profile), 17 Feb 2015 @ 9:49am

The important question?
Were the executives all served WARM nuts IN A BOWL on their flights back to Seoul?

ref: http://www.dailymail.co.uk/news/article-2891236/Arrest-warrant-ex-Korean-Air-exec-nut-rage.html
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 9:59am

I'm not sure I trust either of these companys' washing machines to not spy on my clothes washing habits.
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 10:15am

I think Gibson's Sprawl Trilogy might've been a little optimistic about the cool-factor of a battle between zaibatsu.
[ link to this | view in thread ]
Chronno S. Trigger (profile), 17 Feb 2015 @ 10:28am

I'm going to assume two possibilities. One, there's more to this video than LG is putting out (if that's the case, ignore the rest of this comment). Two, the simple act of stress testing is what sparked the suit.

Over the course of the several year life span of the washer more damage is going to be done to that door than one guy should be able to do in one or two little pushes.

I think it was a reasonable stress test, but it still would be vandalizing private property. If you stress tested your friend's car and broke it, you would be responsible for the damages.

So it may have been a reasonable lawsuit, but Samsung may have done more damage to their reputation. LG probably shouldn't have even bothered trying for defamation and just made this video. Hell, they could probably make an advertising campaign out of it. "Yes we got sued and yes we lost, but we proved their stuff is not going to survive the years."
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 10:29am

Re:
This is starting to sound like Jennifer Government.
[ link to this | view in thread ]
Mason Wheeler (profile), 17 Feb 2015 @ 10:48am

Re: Re:
Good to see I'm not the only person on here who's read that...
[ link to this | view in thread ]
John Fenderson (profile), 17 Feb 2015 @ 10:55am

Re:
"Samsung may have done more damage to their reputation"

I don't know. My takeaway from the whole thing isn't that Samsung's washers are substandard, but that LG hires violent thugs.
[ link to this | view in thread ]
Chronno S. Trigger (profile), 17 Feb 2015 @ 12:37pm

Re: Re:
I don't know about "violent thugs." More like "inconsiderate assholes." You know, sales people.
[ link to this | view in thread ]
charliebrown (profile), 17 Feb 2015 @ 1:18pm

More Of This, Please!
I'd like to see more of this stuff happen. For example, now that this has happened, Samsung can redesign their washer doors to be LG proof! And LG can build a TV that learns keywords for voice control within the TV. I'd like to see Apple and Samsung battle it out, literally! Then Sony and Microsoft! Then Nintendo could grab their Pikachus and zap the other two too! I like where this is going.....
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 2:11pm

Really ..... Thugs??
If thats being a thug I think you need to go back and see what a thug is. A thug would have broken the door off not just pushed on it a bit.

I saw nothing wrong with what the LG execs did, If I was going to buy a new washing machine and I saw an add that a lets say 60lb kid can swing on the door I am going to see if the door can really take that kind of pressure. If it breaks in store I would claim a defect of I only opened it and leaned on it a bit and wow this thing is flimsy, I am not buying one.

If they were being as violent as you all say why did security not interfere? Why did the reps for Samsung not call mall security or the police?

The doors look liked they opened and closed after they left.

But again hey when more than half of the american population is overweight how many do you think will use the door to prop themselves back up? If it can not hold up to a small asain man pushing on it a bit how do you think it will fair when a 300lb person leans on it?
[ link to this | view in thread ]
John Fenderson (profile), 17 Feb 2015 @ 3:20pm

Re: Re: Re:
"Violent" is a inflammatory way to put it, but I don't think it's wrong. Stress-testing (taking the LG people at their word) is a violent act, and to do it to machines that you don't own or have permission for is an act of thuggery.

Anyway, my point is that in my view this incident makes LG, and LG alone, look terrible.
[ link to this | view in thread ]
Zonker, 17 Feb 2015 @ 4:07pm

We should hold an LG execs vs Samsung execs MMA no holds barred match, and I'll buy my washing machines from the winner.

Now that's the way to choose which washing machine brand is the best!
[ link to this | view in thread ]
Dan G Difino, 17 Feb 2015 @ 4:15pm

Crane Picker Vending Game/Off topic a bit
Love those games, but whenever I see the vendor has packed them so tight its a rip off to play, I go out of my way to post an "OUT OF ORDER" sign in big bright print on the glass!
[ link to this | view in thread ]
Anonymous Coward, 17 Feb 2015 @ 4:19pm

Re: No Holds Barred
That would be the best way to get the next President of the United States of America.
[ link to this | view in thread ]
techflaws (profile), 18 Feb 2015 @ 2:58am

Re:
Don't expect anything less from LG, they suck too!
[ link to this | view in thread ]
nasch (profile), 18 Feb 2015 @ 8:41am

Re: Crane Picker Vending Game/Off topic a bit
whenever I see the vendor has packed them so tight its a rip off to play

They're designed from the ground up to be a ripoff to play. Otherwise the operator wouldn't make money off them.
[ link to this | view in thread ]
John Fenderson (profile), 18 Feb 2015 @ 8:48am

Re: Re: Crane Picker Vending Game/Off topic a bit
I am surprised to learn that not everyone understands this. Those crane games are nothing but low-stakes gambling, and as always the house has the edge.
[ link to this | view in thread ]
Sheogorath (profile), 19 Feb 2015 @ 8:40am

LG claims that if the door was indeed broken by its employees' downward shoves, it's only because Samsung's washer doors are crap.
o.O What kind of domestic situations do LG employees live in if they expect fully mature adults to be swinging on washing machine doors?
[ link to this | view in thread ]
hananh, 6 Mar 2015 @ 10:42pm

Hi
I wonder why did the reps for Samsung not call mall security or the police?
[ link to this | view in thread ]
Vincent, 18 Sep 2015 @ 7:28pm

I don't trust both Samsung and LG. Both of them suck, too.
[ link to this | view in thread ]
George, 20 Sep 2015 @ 9:57am

Crane Picker Vending Game/Off topic a bit
An fascinating discussion is value comment. I think that it is best to write extra on this matter, it won’t be a taboo topic however generally people are not enough to talk on such topics. To the next. Cheers
[ link to this | view in thread ]
Alex G., 2 Dec 2015 @ 12:35am

Samsung's "war"
Samsung vs. Apple, and now vs. LG, who next join the "war"
[ link to this | view in thread ]
Alkaline Water, 23 Apr 2016 @ 6:22am

They have no pure in their competitions!
[ link to this | view in thread ]
Alice, 2 Oct 2016 @ 7:59pm

Sabotage
This talk of sabotage is pure nonsense. I can't believe some people take themselves so serious.
[ link to this | view in thread ]
Nick, 13 Jun 2017 @ 12:21am

Court Decision
Has the court made a decision on the process already or are LG and Samsung still fighting each other? :)
[ link to this | view in thread ]