Print 7 comment(s) - last by Monkey's Uncle.. on Dec 26 at 8:27 PM

Apple faces a NT$100,000 to NT$50 million fine if it doesn't comply

Apple got caught setting iPhone prices in Taiwan through emailed communication with carriers, and the tech giant is now facing a fine of 20 million New Taiwan dollars ($670,000 USD). 

According to The Wall Street Journal, Apple violated article 18 of Taiwan's Fair Trade Act by telling the island's three main service providers (Chunghwa Telecom Co., Far Eastone Telecommunication Co. and Taiwan Mobile Co.) what customers should pay for iPhones. 

The article said the carriers had to send their iPhone pricing plans to Apple for approval before selling the devices at a certain price

But the Fair Trade Commission said Apple had no right to tell these providers what to charge because they already paid distribution rights to the iPhone creator. Hence, Taiwan's three companies can distribute or resell iPhones for any price they'd like. 

[SOURCE: Business Insider]

“The commission’s ruling makes Taiwan the first country to fine Apple Inc’s subsidiaries concerning their handset distributors’ pricing, while there is a similar ongoing investigation concerning Apple Inc for impeding competition in Europe,” said Fair Trade Commission Vice Chairman Sun Lih-chyun.

“If Apple Asia hired local companies to provide services and sell iPhones, the company can set prices for them. However, based on the contracts between Apple and their handset distributors, the company actually sold its iPhones to local companies, therefore local companies should have the right to set prices themselves."

Emails revealed that Apple Asia made local Taiwanese companies adjust plans they proposed concerning the prices for iPhones as well as the the price difference between the iPhone 4S and the iPhone 5, and subsidies they offer for iPhones with contracts. 

Apple Asia's contracts with the companies also stated that subsidies offered for buying iPhones with contracts (as well as certain other buying conditions) cannot be lower than that of their competitors. 

The Fair Trade Commission slapped Apple with the fine as a result, but Apple can choose to appeal if it wishes. However, it could also face a NT$100,000 to NT$50 million fine if it doesn't comply. 

Source: The Wall Street Journal

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By bobcpg on 12/26/2013 2:46:44 PM , Rating: 5
a fine of 20 million New Taiwan dollars ($670,000 USD).

Not even sure Apple knows they make money that small.

RE: Really...
By ClownPuncher on 12/26/2013 4:53:57 PM , Rating: 2
Hi, this is Apple. We don't have bills in small enough denominations to pay this fine.

RE: Really...
By Fleeb on 12/26/2013 8:27:28 PM , Rating: 2
That was just a warning, or so I heard.

RE: Really...
By Monkey's Uncle on 12/26/2013 8:27:31 PM , Rating: 2
Here we go. Apple is in real trouble now...

Sell of your Apple shares fast!

Am I reading this correctly?
By quiksilvr on 12/26/2013 12:17:46 PM , Rating: 3
Apple Asia's contracts with the companies also stated that subsidies offered for buying iPhones with contracts (as well as certain other buying conditions) cannot be lower than that of their competitors.


RE: Am I reading this correctly?
By sprockkets on 12/26/2013 1:27:26 PM , Rating: 2
That's how it has been since like day one in the US. That's why for the longest time, the iphone was the same price no matter what, since they forbid selling it under the $200 price mark for the newest model. It also meant that carriers were footing a big chunk of money for the subsidy, making apple rich at the same time, since apple knew they had no choice.

I've seen some discounts, mainly though in the form of rebate cardsk, so maybe there is now some leeway. But apple feels like it saves on customer "frustration" when they find the prices consistent everywhere. Its all about the "experience".

RE: Am I reading this correctly?
By mckinney on 12/26/2013 3:01:00 PM , Rating: 2
Nikon has done this in the US for at least the past couple of years. Pretty much everyone sells their US gear for the same price. Gray market is sometimes cheaper, but you cant get it repaired in the states by authorized Nikon shops

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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