Posted : 2012-03-29 21:04
Updated : 2012-03-29 21:04

Samsung, Hyundai locked in intensifying credit card fight

By Kwon Mee-yoo

After accusing each other of being copycats, the fight between Samsung Card and Hyundai Card continues to get uglier day by day. The dispute is approaching the courtrooms as Hyundai prepares for a lawsuit.

It claims Samsung mimicked the concept of

its popular Hyundai Zero Card, with its Samsung Card 4, as they both provide 0.7 percent discounts at shops that take those cards and interest-free payments for up to three months.

Hyundai says Samsung has a history of copying its products and the benefits offered to card holders. Hyundai released its Black Card in 2005, a product tailored for high-end users, who by paying an annual fee of 2 million won, were able to upgrade to first-class seats when flying and receive regular vouchers to be used in hotels, luxury brand stores and beauty shops.

Four years later Samsung introduced the Raume card in 2009, which provides nearly-identical benefits, also with an annual membership fee 2 million won.

``When Samsung introduced Raume, we figured right away they were copying us. We let that one slide because we didn’t want to stir up trouble, but their actions have become harder to ignore,’’ a Hyundai spokesman said.

Hyundai has sent a number of documents to Samsung that describes how its rival supposedly stole its ideas and demanded the company halt its marketing of Samsung Card 4. This shows that Hyundai has already entered the certification phase of legal action. This is the first time in the credit card industry that a company has demanded a rival shelve a certain product.

Samsung denies the charges of plagiarism and says that the country’s complicated regulations on credit card services make it inevitable for companies to provide similar products.

``We will file a lawsuit against them if Samsung fails to respond within a week or turn down our request to stop issuing the cards,’’ said the Hyundai official.

``Whether we win the case or not, we need to address the plagiarism issue on credit cards one way or another.’’

This dispute adds to Samsung’s public relations troubles. It is also facing protests from small- to medium-sized businesses and small shop owners over the transaction fees it charges them. A national lobby group of self-employed people has been threatening a boycott of Samsung cards because the firm provides more favorable rates to big chains like Costco.

Costco only accepts Samsung cards and pays the company a 0.7 percent commission, while small shop owners pay as much as 4 percent. The lobby group has called for Samsung to lower transaction frees and end its exclusive contract with Costco.

Samsung has rejected the demands, claiming that doing so would create international problems related to the provisions of the Korea-U.S. free trade agreement (FTA) that recently went into effect. However, Samsung later dropped the FTA aspect of the argument, admitting it was based on false facts.
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