Business

Taiwan fines Apple for interfering with iPhone pricing

Image Credit: Jolie O'Dell/VentureBeat

Taiwan’s Fair Trade Commission isn’t thrilled with Apple.

The organization has fined Apple 20 million New Taiwan dollars ($666,800 USD) after finding that the Cupertino-based gadget maker meddled with service providers’ iPhone pricing plans after selling them distribution rights, according to reports in the Wall Street Journal and elsewhere.

The FTC’s vice chairman warned that Apple may be subject to another fine of up to NT$50 million if it doesn’t comply.

The commission ruled that Apple’s Asian subsidiary violated Article 18 of the country’s Fair Trade Act, which asserts that third parties should be allowed to determine resale prices after purchasing goods from an enterprise.

Email correspondence between Apple and the country’s three largest telecom companies — Chunghwa Telecom, Taiwan Mobile, and Far EasTone Telecommunications — showed that Apple demanded to review the three companies’ iPhone pricing plans in advance. The commission found that Apple required the companies to adjust those plans, the subsidies they offered with iPhone contracts, and the price difference between the iPhone 4S and the iPhone 5.

The commission also investigated HTC, Sony, and Samsung, but determined they haven’t reached similar agreements with Taiwan’s telecom companies.

The fine is not a consequential amount for Apple, which is sitting on a massive amount of cash. Phone sales in Taiwan account for around 1 percent of worldwide iPhone sales, according to Taiwan’s FTC.

The commission established the case in April after legislators urged the organization to investigate the iPhone pricing parity between all the local service providers. The ruling only applies to iPhones; the organization has no plans to investigate price interference with iPads or other Apple gadgets.

Apple could not be reached for comment on the matter.


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