Samsung Hit with 20 Billion Won Fine Four Years After GOS Controversy Over "Galaxy Phone Performance Limits"... Samsung: "We Will Take Legal Action" (Full Story)

Promoted as "the ultimate gaming experience," while secretly imposing performance limits

KFTC: "Clearly unfair advertising that concealed restrictions"

The Korea Fair Trade Commission (KFTC) has imposed a fine in the 20-billion-won range on Samsung Electronics for exaggerating the gaming performance of its smartphones and deliberately limiting their speed. Four years after the Game Optimizing Service (GOS) controversy erupted, the KFTC has come down hard on the company over alleged deceptive labeling and advertising. The controversy arose after Samsung promised “the best performance ever” in the era of high-end mobile games, then forcibly reduced device performance to conceal overheating.

Three models in Samsung's Galaxy S21 series. Yonhap News.

The KFTC said on October 27 that it had decided to order Samsung Electronics to take corrective action for unfair advertising and impose a provisional fine of approximately 20 billion won. This is the first time in about eight years that Samsung Electronics has been sanctioned by the KFTC for unfair advertising, following a case involving exaggerated claims about air purifiers in 2018. In that case, the KFTC imposed a fine of 488 million won, finding that the company had deceived consumers with promotional claims such as “removes 99.9% of viruses” without specifying the conditions under which the claim had been tested.

According to the KFTC, Samsung Electronics heavily promoted the gaming performance of its devices while selling the Galaxy S21 and S22 and Tab S8 series from January 2021 to March 2022. In reality, however, the devices were designed so that the “GOS Individual Policy” would activate immediately whenever consumers launched certain high-end game apps, regardless of the devices’ condition, including their temperature. As a result, the maximum operating speeds of the central processing unit (CPU) and graphics processing unit (GPU), the devices’ core components, were forcibly reduced to as low as 30% of their original maximum performance. Screens frequently froze or resolution dropped whenever high performance was needed, leaving consumers with only a fraction of the performance they had paid a premium for.

The problem was that Samsung Electronics made no mention of these facts to consumers while ramping up its high-performance marketing. It touted the devices’ ability to run high-end games with claims such as “the fastest 5-nanometer AP ever in a Galaxy” and “the ultimate mobile gaming experience.” The KFTC determined that Samsung’s failure to disclose the performance limitations constituted “deceptive labeling or advertising” under Article 3(1)(2) of the Act on Fair Labeling and Advertising, even though consumers could have chosen other options had they known about the restrictions in advance.

The three models sold during the period of the violation generated approximately 4 trillion won in related sales. At the initial review-report stage, the violation was considered serious, and a fine in the 60-billion-won range was expected. During the commission’s deliberations, however, the violation was downgraded to a less serious category, and the applicable rate was reduced to 0.5%. This reflected the company’s “prompt voluntary corrective action”: after consumer complaints surged, it belatedly opened a workaround through a software update and lifted the performance restrictions. Asked why it had taken four years after the GOS controversy to reach a sanction, the KFTC explained, “The process took time because we gave the respondent more than 11 opportunities to submit explanatory materials and, through a preliminary opinion-hearing procedure, took sufficient time to hear the validity of its arguments and explanations on technical issues.”

Lee Sun-mi, a standing commissioner of the KFTC, said, “The significance of this measure is that it confirms that when a particular product feature is emphasized and advertised as a key strength, but important limitations affect that feature in ways that differ from the impression conveyed to consumers through the advertising, those limitations must be disclosed so consumers can clearly understand them.” She added, “The KFTC plans to continue monitoring unfair labeling and advertising so that information that could significantly affect consumers’ rational purchasing decisions is provided accurately, while promoting fair competition and working to create a transaction environment consumers can trust.”

Samsung Electronics said, “GOS was a feature designed to improve perceived gaming performance and optimize devices so users could enjoy games stably for extended periods.” It added, “This is a decision that is difficult to understand, given that all domestic and international lawsuits have concluded and the complaints filed with the KFTC by the participants in those lawsuits have also been withdrawn. We will actively explain the company’s position through legal proceedings going forward.”

This content was produced with the assistance of AI translation services.