Symantec takes heat over Chinese compensation offer

Symantec is taking heat in the mainstream Chinese media over its compensation offer for a destructive software update

Symantec's attempt to make amends with Chinese users who saw their computers crippled by its antivirus software is off to a rocky start, with critics saying the company's compensation offer isn't good enough.

"Symantec's response to its Chinese consumers lacks seriousness and sincerity," said Alamus, the deputy director of the China Electronic Commerce Association's committee on legal and policy issues, speaking in a news report on CCTV 9, the international channel of state broadcaster China Central Television. Alamus uses a single name.

The company also came under criticism in a separate report carried by CCTV's dedicated news channel on Monday.

"We think this kind of compensation, of course, is better than nothing. But it's not a comprehensive and complete compensation offer," Lu Benfu, director of the Chinese Academy of Science's Internet Development Research Center, said in that report.

The problems caused by Symantec's update and its compensation offer have also generated heavy coverage online. Sina.com, one of China's most popular news sites, has set up a dedicated page, complete with links to news reports, blog postings, discussion threads, and user polls.

Symantec's problems began May 18 when it issued a faulty Norton antivirus update for the Simplified Chinese version of Windows XP. The update mistook two system files for malware and quarantined them, crippling thousands of PCs. Symantec estimated that 50,000 PCs were affected, while Chinese press reports put the figure higher.

The incident provoked an outcry among Chinese users, with many demanding compensation for lost data and the cost of restoring their systems. At least two lawsuits have been filed against Symantec over the incident.

At first the company issued a formal apology and a fix for the problem, but offered no compensation. As calls for compensation persisted, the company said details of a compensation offer were under consideration. On Monday, five weeks after the faulty update was released, Symantec announced that affected users will be eligible to receive free software.

Symantec is offering affected Chinese consumers a one-year extension to their license for its Norton antivirus software and a copy of Norton Save & Restore 2.0. Corporate customers are being offered Symantec Ghost Solution Suite licenses, depending on the number of PCs affected. The company is not offering to extend antivirus licenses for corporate customers affected by the faulty update.

This deal, which Symantec described as a "goodwill offer" rather than compensation, will be offered to users for a brief window of time, from June 27 to July 15.

That choice of wording may ultimately come back to haunt the company.

"It's obvious that Symantec is trying to avoid mentioning compensation. They are watching the reaction from users," Alamus told CCTV. "They are attempting to get away from their responsibility."

Chinese consumers have become increasingly vocal in recent years, often taking complaints about products and services online with postings on Internet bulletin boards and blogs. The commentators often have an impact offline, as well.

"They are the experts that you go to when you want to select antivirus software, for example, so their influence certainly extends offline," said Sam Flemming, the CEO and founder of CIC, a firm that tracks Chinese bulletin boards and blogs for multinational companies.

The complaints rarely spill over into mainstream news coverage, such as CCTV news broadcasts. But when they do, foreign companies make easier targets than Chinese companies, for several reasons. Foreign companies generally lack the political backing and connections to shield them from criticism, and they are vulnerable to nationalist sentiments that can inflame consumer attitudes towards them.

"Foreign companies who run into these problems will get hit harder than Chinese companies," said Jeremy Goldkorn, editor of Danwei.org, a Web site that tracks China's media.

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