Taiwan FTC fines Apple for seeking to manage retailers' iPhone pricing
Taiwan's Fair Trade Commission has slapped Apple with a $670,000 fine for interfering with mobile providers and handset retailers' pricing.
The commission accused Apple of violating the nations Fair Trade Act by advising mobile carriers on how much they should charge for iPhones, stating that Apple had no right to govern how the carriers sold iPhones after having sold the carriers distribution rights.
A report by the Wall Street Journal indicated that the fine involved resale and distribution rights rather than just pricing, noting that the commission maintained that Taiwan's three major carriers Chunghwa Telecom, Far Eastone Telecommunication, and Taiwan Mobile "can distribute or resell iPhones at their complete discretion after paying Apple for those rights."
The decision applies only to iPhones and not other devices such as iPads or Macs; mobile phones and carriers are subject to unique regulations in most countries.
The report cited a FTC statement saying, "through the email correspondence between Apple and these three telecom companies we discovered the companies submit their pricing plans to Apple to be approved or confirmed before the products hit the market."
Earlier this year, Taiwan's FTC also fined Samsung for "dirty tricks" involving orchestrating an internet smear campaign against Taiwanese phone maker HTC and making false advertising claims related to a Galaxy-branded handset.
Both fines against Samsung combined totaled $442,000, considerably less than the since fee Taiwan is seeking to charge Apple in the support of Taiwan's carriers.
The commission accused Apple of violating the nations Fair Trade Act by advising mobile carriers on how much they should charge for iPhones, stating that Apple had no right to govern how the carriers sold iPhones after having sold the carriers distribution rights.
A report by the Wall Street Journal indicated that the fine involved resale and distribution rights rather than just pricing, noting that the commission maintained that Taiwan's three major carriers Chunghwa Telecom, Far Eastone Telecommunication, and Taiwan Mobile "can distribute or resell iPhones at their complete discretion after paying Apple for those rights."
The decision applies only to iPhones and not other devices such as iPads or Macs; mobile phones and carriers are subject to unique regulations in most countries.
The report cited a FTC statement saying, "through the email correspondence between Apple and these three telecom companies we discovered the companies submit their pricing plans to Apple to be approved or confirmed before the products hit the market."
Bigger fine than Samsung's slander and false advertising put together
Apple hasn't responded to the accusations, although the FTC notes that Apple can appeal the ruling. If it does not comply, however, the commission has threatened an even larger fine.Earlier this year, Taiwan's FTC also fined Samsung for "dirty tricks" involving orchestrating an internet smear campaign against Taiwanese phone maker HTC and making false advertising claims related to a Galaxy-branded handset.
Both fines against Samsung combined totaled $442,000, considerably less than the since fee Taiwan is seeking to charge Apple in the support of Taiwan's carriers.
Comments
FTC violation to eBook shenanigans.
On the other hand, Apple has charged these resellers a certain amount of money with what looks like no right to determine anything other than the fact the resellers owe them money for every iPhone they receive from Apple. If they don't sell some phones, tough, they still have to pay for them.
(I haven't read the distribution rights but I can't imagine Apple would let them return un-sold iPhones if they had to give up reasonable fair-trade rights manufacturers usually have.)
Sounds like yet another of someone getting the knickers in a twist and deciding that since Apple has deep pockets they make an easy target to go after with some arcane interpretation of the law (or ordinance or whatever it is in this case). Or perhaps a case where all parties willingly entered into a agreement based on terms accepted by all and then someone decided they should have gotten a better deal than they did.
While I am not saying Apple can do no wrong - it does seem fishy that Apple seems to be the most common target of accusations for things like this which have most likely been standard operating procedure by all industry players for many years.
I know browsing can sometimes be a chore, but come on....I'm 50/50 with the Taiwansese FTC here.
Reuters, Slashgear, Austrian Tribune, Venturebeat ect...all report that the carriers did in fact have resell agreements in place after the purchase of their Iphone orders to distribute at their own prices so and so forth.
Apple more or less decided:
For whatever reasons they decided that they wanted a sort of control over these things(which they agreed to let carriers as opposed to apple decide). So they started strong arming the carriers into certain price brackets by actually limiting the pricing on the iphone contracts(Something Apple should never really have much to do with anyway). Carriers had to get "approval" and were often told how much to charge for what even though under their contract Apple is not supposed to be doing that.
I don't think it's too unreasonable that the FTC act in this instance. You made the agreement, you honor it. This is merely a slap on the wrist, whereas I would've probably backhanded apple to the face for this.
HOWEVER
The fact that this fine is higher than that of Samsung's slander campaign is a wad of crap. There is NO reason why this should be. Price fixing while it may be annoying still generates general business flow. What samsung was doing legitimately threatened Taiwan's economy in a multitude of ways. So if I was giving apple a backhand, then I would dislocate Samsung's shoulders in addition to breaking a nose.
You would think that they simply give them a warning and tell them to stop requiring the carriers to email sales to them for approval. Definitely sounds like Taiwan's FTC is just fishing for free money anyway they can.
there goes 28.6 seconds of revenue
My thought exactly.
Actually, why not just stop selling iPhones in Taiwan? Then the Taiwanese could pay higher prices on the black market like they do in other little countries.