Samsung staffers slated smartphone arch-rival HTC in fake online reviews - and now a Taiwanese watchdog is investigating.

Sammy has since ended the practice of allowing its employees to post anonymous comments, describing the whole affair as "unfortunate" and one that went against its "fundamental principles". It has even been alleged that the South Korean giant hired students to leave the negative feedback on websites in Taiwan, HTC's backyard.

Now the Taiwanese Fair Trade Commission has launched a false advertising probe that could clobber Samsung (2011 net income: $18.3bn) with a fine of up to $836,595 (25m New Taiwan dollars, £547,000).

In a statement to the media, Samsung said:

Samsung Electronics remains committed to engaging in transparent and honest communications with consumers as outlined in the company's Online Communications Credo. We have encouraged all Samsung Electronics employees worldwide to remain faithful to our Credo. The recent incident was unfortunate, and occurred due to insufficient understanding of these fundamental principles. Samsung Electronics Taiwan (SET) has ceased all marketing activities that involve the posting of anonymous comments, and will ensure that all SET online marketing activities will be fully compliant with the company's Online Communications Credo. We regret any inconvenience this incident may have caused. We will continue to reinforce education and training for our employees to prevent any future recurrence.

Allegations of Sammy skullduggery first appeared on TaiwanSamsungLeaks.org, which published documents it claimed came from Samsung's outside marketing firm. The paperwork apparently revealed all the fake forum posts made on Taiwanese gadget websites, prompting the whistleblowers to slam Samsung's tactics as "evil".

In the cache of forum posts, one user complained that his girlfriend's HTC One X phone was always on the blink, while Samsung's Galaxy Note phone was described as far better than HTC's Sensation XL handset. Another post even asked if anyone who owned a Samsung phone had been given a job promotion.

In a statement, HTC said it was considering whether to take "appropriate action" against Samsung. Both companies tout a range of handheld tech powered by Google's mobile operating system, Android. ®