Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 895

Administrative Motion to File Under Seal filed by Apple Inc.. (Attachments: #1 Apple Inc.s Motion For Adverse Inference Jury Instructions Due To Samsungs Spoliation Of Evidence, #2 Declaration of Esther Kim ISO Apple Inc.s Motion For Adverse Inference Jury Instructions Due To Samsungs Spoliation Of Evidence, #3 Exhibit 1, #4 Exhibit 32, #5 Exhibit 33, #6 Proposed Order Granting Apple Inc.s Motion For Adverse Inference Jury Instructions Due To Samsungs Spoliation Of Evidence, #7 Proposed Order Granting Apple's Administrative Motion to Seal Documents)(McElhinny, Harold) (Filed on 5/1/2012)

Exhibit 1

Peter Mauro Schroepfer
6397 Thornhill Dr.
Oakland, CA 94611
[e-mail]
[e-mail]

Certificate of Translation

29 April 2012

I hereby certify that this Korean to English translation of a Republic of
Korea Fair Trade Commission press release dated March 16, 2012 titled
“Highest Fine Ever Levied for Samsung Electronics’ Repeated Obstruction
of Investigations” is to the best of my knowledge an accurate and complete
rendering of the contents of the document with the same title, that was
obtained
electronically
on
April
29,
2012
at
http://www.ftc.go.kr/news/ftc/reportView.jsp?report_data_no=4688&repor
t_data_div_cd=&tribu_type_cd=&currpage=6&searchKey=&searchVal=&
stdate=&enddate=, except for the word “TRANSLATION” at the upper
right corner and page numbers added at the bottom of each translated page.
I further certify that I translated said document, that I am competent in both
languages and have twenty years of professional experience in Korean to
English translation.

Translation

Press Release
Embargoed
Until:
www.ftc.go.kr
Date of Release
3/16/2012 (Fri)

Reporting allowed for morning papers 3/19/2012 (Mon)
(3/18 (Sun) 12pm for internet & broadcasting mediums)

We will achieve
an advanced
Republic of Korea
without fail.

Department
Responsible
Officials
Responsible

Market Monitoring Division,
Service Industry Monitoring Section

Spokesperson’s
Office

Manager Chul Hyun Kwon 02) 2023-4392
Administrator Hyun Kyu Park 02) 2023-4403

Tel [phone]
Fax [phone]

“Highest Fine Ever Levied for Samsung Electronics’ Repeated Obstruction of Investigations”
- Organized delaying of entry, destruction of evidentiary materials, flight of responsible personnel,
submission of false data, etc. -

□ Fair Trade Commission (chaired by Chairman Dongsoo Kim) levied the highest fine
ever of 400 million won regarding Samsung Electronics Co., Ltd. and its employees’ act
of obstruction of an investigation.
Summary on Obstruction of Investigation

□ 3/24/2011 (Thurs) During an on-site investigation of Samsung Electronics Co., Ltd.’s
Suwon facility regarding mobile phone distribution, significant acts constituting
obstruction of investigation occurred, in which numerous executive employees
participated.
While Samsung Electronics’ security and a third party security company’s employees
delayed the FTC investigators’ entry, Samsung employees from the department subject
to the investigation destroyed relevant materials and replaced the computers of those
employees who were subject to investigation.
The head of the department subject to the investigation evaded the investigation
according to a contingency plan, and, following the FTC investigators’ withdrawal,
returned to the office and deleted relevant materials saved on his computer.
Furthermore, while explaining the circumstances behind delaying of entry, Samsung
Electronics submitted falsified access records, having deleted record of the entry of the
employee who replaced the computers.

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1

Translation

Details of Behavior
Acts of Delaying Entry and Destruction of Relevant Materials
At approximately 2:20pm of March 24, 2011, Samsung Electronics’ security and a third
party security company’s employees delayed the entry of FTC investigators who were
trying to get to the relevant department (Mobile Communications Division, Korean
Product Planning Group) for an on-site investigation relating to mobile phone distribution.
FTC investigators identified themselves as such and requested entry to the Mobile
Communications Division, but their entry was continuously denied, with the reason
given that unless an appointment was made, the personnel responsible must be
present.
Because of this, FTC investigators were able to reach the actual investigation site
around 3:10pm, but by then, an employee ____ Kim was the only remaining person
in the office.
<Security Company’s Internal Report>

2:50
–
3:30

□ R3 lobby
Information Communication Complex Lobby 2
Product Strategy Team
- Situation reported to Lobby 2 through the manager’s landline –
Delay in admitting entry ordered.
- After shutting down operations office and the inner gate, ordered
on-site back-up of two people.
- FTC demands entry at the gate (confronted by six employees
from Human and five employees from S1)
- FTC presents internal document “Confirmation of Samsung
Electronics Entrance.”
- R4 support requested – two people sent (hereafter omitted).

* R3 and R4 are building names on Samsung Electronics’ Suwon facility.
* Human and S1 are third party security service providers at Samsung Electronics’ Suwon facility

While FTC investigators’ entry was being delayed, materials subject to investigation were
destroyed and computers of key employees subject to investigation were replaced under
the direction of (Senior Vice President) ____ Park, Samsung Electronics Mobile
Communications Division Support Team Leader

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2

Translation

-

<Samsung Electronics’ Internal Report by Email>
Instances discussed as obstruction of investigation: Restricting entry, physical
altercation, replacing of computers (3 computers)

Replacing of computers on the first day between 2:40 and 3 under the direction of
the Support Team Leader, I, _____, replaced computers with empty ones.
FTC found out about the replacement of computers on Friday morning, intense
interrogation followed. Evaded under various reasons but suspicions remain
(hereafter omitted)
<Samsung Electronics’ Internal Report>
Moving of documents in the desk drawer at the Korean Product Planning G Office prior to FTC entry

Scene of destruction of documents

2:51pm

Scene showing the moving of desk drawers

* Above document is Samsung Electronics’ internal report and was made with CCTV captured footages

The fact that delaying the entry of FTC investigators was not random was also confirmed
by materials on the internal evaluation of the security employees.
<Evaluation of Security Company Actions>
* Information Protection Group* Meeting Content (Group Director ____Jung attended)
1. Group Director _____ Jung (Evaluation regarding FTC Visit on 3/26)
1) Evaluation: S1 and Human responded well
- Confirmation of identity, response to trespassing, Information Protection and
Communication’s response, and mutual cooperation and interfacing praised
- Executed Information Protection Group’s directions faithfully: No questioning
regarding the security company’s employees’ responsibility (following omitted)
* Information Protection Group is a Samsung Electronics section in charge of security and directs the
security companies.

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3

Translation

After this obstruction of the investigation, Samsung Electronics prepared something
called the “Present Security Action Conditions in Response to Emergency Situations,” but
the content of it was instead to further strengthen its security provisions.
-

Even if government investigators visit, deny entry of their vehicle at the main gate
if no prior communication, construct barricades, designate key files as classified
and delete permanently, and concentrate the data on the server, and etc.

Acts of evading investigation and deleting materials from computers
(Vice President) ____ Kim, head of a section at Samsung Electronics Mobile
Communications Division, deliberately evaded the FTC investigation on March 24, 2011.
-

Even though Vice President ____ Kim was present at the Suwon facility at the
time, he claimed he was on a business trip to Seoul headquarters during a phone
conversation with the FTC investigator, and did not comply with the investigation
request.

-

This type of response was in accordance with an internally established and
previously planned scenario.

<Samsung Electronics Internal Report>
Per pre-planned scenario, Vice President ____ Kim responded that he was on a
business trip to Seoul and after clearly ascertaining the investigator’s intentions,
complied with the investigation the following day (following omitted)
<Email that Vice President ____ Kim sent to Executive Vice President>
1. Progression of Events:
- Thursday (3/24) afternoon around 2:30, raided Suwon without notice. During
central gate and Information Communication Complex entry, physical altercation
with Secom.
- Swooped in to find Vice President ___ Kim, and Department Manager ___ Kim
received and responded. During this time, other employees all left their stations
except 3-4 employees.
- I made up the excuse that I was at a meeting in Seoul and ascertained the
ongoing situation from outside. (following omitted)

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4

Translation

When investigators withdrew because an investigation was impossible that day, the head of the
department deleted all materials subject to the investigation stored in his computer, which had been
hidden, using a file deletion program.
* Internal documents and statements have confirmed that the deleted files were important materials
relevant to the investigation.
<An excerpt from Vice President ____ Kim’s statement>
Q23. In the content of the email you sent to the Executive Vice President on March 25, it states
that files containing “Korean roadmap iPhone countermeasure related report materials, Tab
price policy, company’s proposal if iPhone not adopted, etc.” were deleted. Is it correct that you
deleted such files?
A. Yes, that is correct.
Q24. What other files did you delete?
A. I do not remember well, but I remember that I deleted all the relevant files that came up in a
search for SKT-related files using the Windows search function.
The Submission of Falsified Data
FTC requested access to records of the building where the related department is located to verify the
reason for the delaying the entry investigating civil servants on March 24, 2011.
– Samsung Electronics submitted falsified records of who was admitted to the building, having held
two meetings about submitting such records, in which it deleted the name of employee ____ Lee, the
individual who had replaced the computers,

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5

Translation

<Internal Samsung Electronics Document>
Hello.
We would like to have a meeting as below to discuss the materials requested by
FTC as I have previously communicated.
o Date: 7/11 (Mon) 16:00
o Location: Suwon Business Site Information Communication Sector
(Senior Manager _____, please reserve the conference room.)
o
o

Attendees : See Recipients
Agenda
– Discuss the submission of Lobby 1 access records and phone records of 7 people
– Share other progress status
Please attend despite your busy schedules, as decision making is necessary regarding
the content of statements up to this point and the individual phone records.

Details of Action: Penalty total ₩400 million
□ Samsung Electronics (Obstruction of investigation: ₩200 million, submission of falsified data:
₩100 million), 2 executives (₩50 million each)
* Grounds for this measure: Statute for Monopoly Regulation and Fair Trade Article 69,
Section 1, Paragraph 6, 7

□ In another related case, Samsung Electronics was fined an additional penalty of ₩2.38 billion for
obstruction of investigation regarding its case for unfair customer enticement.

The significance of this measure and future plan
□ This action is to impose strict sanctions on corporations’ organized obstruction of investigations,
which is becoming increasingly skillful.

□ The maximum penalty legally possible was imposed on Samsung Electronics considering the
following:
It delayed access according to a plan and numerous employees destroyed materials during that time

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6

Translation

Intentional obstruction of an investigation under the direct command of high-level executives
according to the company’s pre-planned scenario.
It is a company with a repeated pattern of obstruction of investigation.
It prepared falsified data and submitted it to the investigating agency to reduce the charge of
obstruction of investigation
Following this case of investigation obstruction, it drafted security procedures that put emphasis on
making it difficult for FTC investigators to enter, instead of swiftly cooperating.

□ Going forward, the FTC plans to continue with strict responses, using every possible legal means
towards any company that obstructs investigation hindering the discovery of legal violations.
The FTC will impose fines for obstructing investigations, increasing penalties for related cases,
selecting repeated violators of obstruction of investigation as subjects for monitoring, etc.
In addition, the FTC’s will actively pursue the imposition of penalties for future cases of obstruction of
investigation such as delaying of site access.
* On February 27, 2012, the National Assembly passed an amendment to the Fair Trade laws
imposing imprisonment under 3 years, penalty under ₩200 million for obstruction of investigation
including verbal abuse, assault, and delaying or restricting site access (announced March 16, taking
effect June 16)

Appended: Previous actions taken in major cases of obstruction of investigation.

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7

Translation

Appendix
Decision Date
Nov. 6, 1998
Jan. 31, 2003
Jan. 7, 2003
Aug. 4, 2003
Dec. 16, 2003
Jun. 3, 2005
Jul. 27, 2005
Dec. 2, 2005
Oct. 18, 2005
Mar. 17, 2006
Jul. 26, 2007
Apr. 3, 2008
Jul. 31, 2008
Oct. 22, 2010
Aug. 1, 2011

sf-3139209

Previous actions taken in major cases of obstruction of investigation

Defendant & Case Name
Resisting and obstructing investigation by Samsung Motors and
its executives
Submission of false report and data by
executives of Samsung Card
Submission of false data by Hyundai Merchant Marine
Submission of false data by employees of CJ
Resisting investigation by an employee of Kiturami Boiler
Obstruction of investigation by an employee of Samsung Total
Obstruction of investigation by employees of CJ
Obstruction of investigation by
Samsung Electronics and its employee
Obstruction of investigation by an employee of Hyundai Hysco
Obstruction of investigation by an employee of Semes
Obstruction of investigation by INP Industries
Obstruction of investigation by
Samsung Electronics and its executives
Obstruction of investigation by
SK Communications and its executives
Obstruction of investigation by an employee of eBay G-Market
Obstruction of investigation by
CJ CheilJedang and its executives

Total Penalty
(in million ₩)
120
20
30
10
10
185
20
50
50
10
15
40
125
250
340

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