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Anti-trust watchdog fines Groupon Korea for posting fake reviews

Groupon’s South Korean operation has encountered a bit of bother after it was fined by the country’s anti-trust watchdog for putting up fake reviews on its website and exaggerating the number of products bought by consumers.

The incident highlights just how competitive the daily deals industry has become as local rivals in the Asian country, such as Coupang and Ticket Monster, fight Groupon for a share of the market.

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The Korea Herald reported on Monday that the country’s Fair Trade Commission (FTC) had fined Groupon’s Korean arm 17 million won ($14,773) for its wrongdoing. It has also ordered the company to put up a notice on its website detailing the penalty for a period of four days.

In a statement relating to the company’s misdemeanor, Groupon Korea said that the disingenuous reviews were put up before August and that it had since taken “corrective measures.”

Three other daily deals websites based in the country have also been fined for claiming to have sold more products than they really had, the FTC said.

Groupon pioneered the daily deals business with its launch in 2008. The Chicago-based company currently operates in 45 countries and employs around 10,000 people.

Earlier this month Groupon went public, raising $700 million in its IPO. However, since then some investors appear to have got cold feet, with its share value last week dropping below its launch price of $20. At the time of writing it stands at $15.24.

The drop has been attributed to a number of factors, including fears of increased competition from rivals such as Amazon-backed LivingSocial and Google Offers.

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Facebook Deals: Facebook Deals are currently available in Atlanta, Austin, Dallas, San Diego, and San Francisco. However the social network also has its Check-in Deals application, which is more widely available via its mobile app. Using its Places tool, users can check in and view deals nearby – a similar concept to the newly-launched Groupon Now. You can view available Check-in Deals on the site as well, and it’s widely available.

Google Offers: At the moment, Google Offers is beta testing in Portland, Oregon. New York City, San Francisco, and Oakland should follow. As of press time, Google had only introduced two deals, and there seems to be some sort of hitch rolling them out. We checked the site both yesterday and today, and were told there were currently no deals available in Portland. After a short wait, we received e-mail notification that there was a new discount. A small inconvenience, and one we'll chalk up to early glitches.

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