Samsung is alleged to have hired students to post negative comments about phones made by Taiwan's HTC, InformationWeek reported Tuesday.
Taiwan's Fair Trade Commission said it had begun an investigation after receiving a series of complaints.
A Taiwanese website had published documents appearing to show Samsung had been recruiting students to criticize HTC and praise Samsung in anonymous Web postings.
If found guilty of engaging in "false advertising" Samsung and its local Taiwan agents could face fines of a possible $800 million.
Samsung, while saying it was unaware of any official investigation, published an apology on its local Facebook page.
"Samsung Electronics remains committed to engaging in transparent and honest communications with consumers as outlined in the company's Online Communications Credo," the company posted.
"The recent incident was unfortunate, and occurred due to insufficient understanding of these fundamental principles," Samsung said, adding it would conduct training of its employees to ensure such practices were not repeated.
Samsung said it had ceased all marketing activities "that involve the posting of anonymous comments."