Taiwan fines Apple $647K for forcing carriers to seek iPhone pricing approval

Posted:
in iPhone edited June 2015
Apple has lost a Taiwanese lawsuit accusing it of anti-competitive phone pricing tactics, and barring an appeal will be fined T$20 million, or a little over $647,000 U.S., a report said on Wednesday.




The fine was previously issued by Taiwan's Fair Trade Commission, which charged that Apple broke the law by demanding that Taiwanese carriers get approval for prices on iPhone plans, according to Reuters. Apple launched a countersuit, but lost.

In particular Apple was said to have imposed contract prices for the iPhone 4, 4S, 5, and 5s. It also allegedly claimed final say over iPhone subsidies, ad content, and price gaps between older and newer models.

Such tactics are common for Apple in other countries -- including the U.S. -- but a Commission spokesman noted that under Taiwanese law, a carrier owns the phones it sells and is free to set its own pricing.

Apple has so far refused to comment on the matter, including whether it will pursue an appeal.

The company has an outsized influence on Taiwan. In the December quarter the iPhone achieved a 32 percent marketshare, International Data Corp told Reuters, and major partners in the Apple supply chain -- such as Foxconn, Pegatron, and TSMC -- are headquartered in the country, even if many of their factories are located in mainland China.
«1

Comments

  • Reply 1 of 29
    boeyc15boeyc15 Posts: 986member



    Y-ouch, that's gotta hurt!  /s

  • Reply 2 of 29
    patpatpatpatpatpat Posts: 628member
    Not the pocket, but the ego maybe.
  • Reply 3 of 29
    genovellegenovelle Posts: 890member
    patpatpat wrote: »
    Not the pocket, but the ego maybe.
    It could force a change in that country where phones there only come from Apple's website or stores. This would hurt the carriers as they lose a source of revenue. Apple will more than likely do this than allow the iPhone brand to be at risk by loss leader pricing. I just don't see it happening. When that happens those complaining will suddenly be asking the government to forget their complaints.
  • Reply 4 of 29
    I'm ok with that. Little Taiwan still standing strong.
  • Reply 5 of 29
    These laws sound like they were written by the local carriers, for their benefit.
  • Reply 6 of 29
    robmrobm Posts: 1,068member
    These laws sound like they were written by the local carriers, for their benefit.

    Yea - a hangover from Ye olden days when carriers loaded their own crap software and ux.
  • Reply 7 of 29
    magman1979magman1979 Posts: 1,114member
    Quote:

    Originally Posted by AppleInsider View Post



    Such tactics are common for Apple in other countries -- including the U.S. -- but a Commission spokesman noted that under Taiwanese law, a carrier owns the phones it sells and is free to set its own pricing.

     

    Wow, so in other words, the carriers in that country have the right to do what they please with the handsets, and set their own prices, and they OWN the devices before being sold to the customer? No, doesn't work that way folks... APPLE owns the devices, as they MADE THEM, until they are purchased by their NEW owner, the customer, hence they have every right to ask certain conditions on the sale of THEIR device! Don't like? Too fucking bad, Apple should just pull out of Taiwan and see what happens next.

    Quote:

    Originally Posted by Suddenly Newton View Post



    These laws sound like they were written by the local carriers, for their benefit.

     

    My thoughts exactly... Imagine if the carriers in Canada were given that kind of discretionary power, man the consumers up here would seriously be up shit creek!

  • Reply 8 of 29
    gatorguygatorguy Posts: 20,292member
    magman1979 wrote: »
    Wow, so in other words, the carriers in that country have the right to do what they please with the handsets, and set their own prices, and they OWN the devices before being sold to the customer? No, doesn't work that way folks... APPLE owns the devices, as they MADE THEM, until they are purchased by their NEW owner, the customer, hence they have every right to ask certain conditions on the sale of THEIR device! Don't like? Too fucking bad, Apple should just pull out of Taiwan and see what happens next.
    Do you think the carriers got them for free? Not likely. I'm pretty sure (near certain) Apple sells the iPhones to the carriers who pay for and now own them. They're resellers of products they purchased from Apple and not working on consignment.
  • Reply 9 of 29
    felix01felix01 Posts: 237member
    I'm guessing Apple legal will come up with some workaround and we'll see no substantive change in their Taiwan business model.
  • Reply 10 of 29
    robmrobm Posts: 1,068member
    gatorguy wrote: »
    Do you think the carriers got them for free? Not likely. I'm pretty sure (near certain) Apple sells the iPhones to the carriers who pay for and now own them. They're resellers of products they purchased from Apple and not working on consignment.

    Yea - but they still have to work within the Reseller agreement guidelines they agreed to in the first place.
    If they want to step outside of those guidelines they are effectively breaking a contract.

    They can't have it both ways.
    Or maybe they can ... at the moment.
    Will be interesting to see what Apple does with this.

    Apple won't let any reseller compromise the "brand" by operating outside the agreements.
  • Reply 11 of 29
    retrogustoretrogusto Posts: 712member
    I suspect they are refraining from comment to keep from cracking up. 647k? They could probably recoup that by selling a lock of Federighi's hair on eBay.
  • Reply 12 of 29
    The user and all related content has been deleted.
  • Reply 13 of 29
    djsherlydjsherly Posts: 1,016member
    robm wrote: »
    Yea - but they still have to work within the Reseller agreement guidelines they agreed to in the first place.
    If they want to step outside of those guidelines they are effectively breaking a contract.

    They can't have it both ways.
    Or maybe they can ... at the moment.
    Will be interesting to see what Apple does with this.

    Apple won't let any reseller compromise the "brand" by operating outside the agreements.

    Don't know how it works there but price maintenance is illegal in my country. One you buy the thing it's yours. You can throw it away if you want.

    Apple *can* choose who they do business with, however.
  • Reply 14 of 29
    tbelltbell Posts: 3,146member
    Quote:

    Originally Posted by Gatorguy View Post





    Do you think the carriers got them for free? Not likely. I'm pretty sure (near certain) Apple sells the iPhones to the carriers who pay for and now own them. They're resellers of products they purchased from Apple and not working on consignment.

     

     

    Yes, but they sell them to the carriers under terms of a contract. So the carriers agreed to the terms that allowed Apple to control those issues. So the carriers took ownership of the product subject to conditions. Otherwise, Apple may not have agreed to sell them.

  • Reply 15 of 29
    tbelltbell Posts: 3,146member
    Quote:

    Originally Posted by djsherly View Post





    Don't know how it works there but price maintenance is illegal in my country. One you buy the thing it's yours. You can throw it away if you want.



    Apple *can* choose who they do business with, however.

     

    However, the sale of the product is subject to terms of a contract. The party buying the product has to honor the terms of the contract.

  • Reply 16 of 29
    tbelltbell Posts: 3,146member
    Quote:

    Originally Posted by RobM View Post





    Yea - but they still have to work within the Reseller agreement guidelines they agreed to in the first place.

    If they want to step outside of those guidelines they are effectively breaking a contract.



    They can't have it both ways.

    Or maybe they can ... at the moment.

    Will be interesting to see what Apple does with this.



    Apple won't let any reseller compromise the "brand" by operating outside the agreements.

     

     

    Good points. However, you can't include any terms in a contract that are illegal. If you do, those illegal terms do not need to be followed. So, if the law in Taiwan is Apple can't control certain issues after the sale of the product, and the contract says otherwise, it is likely a Court will just disregard those terms.

  • Reply 17 of 29
    djsherlydjsherly Posts: 1,016member
    tbell wrote: »
    However, the sale of the product is subject to terms of a contract. The party buying the product has to honor the terms of the contract.
    Yep, but any part of the contract to do with price maintenance is not enforceable. Or, to put it another way, price maintenance is illegal.
  • Reply 18 of 29
    croprcropr Posts: 914member
    Quote:
    Originally Posted by Suddenly Newton View Post



    These laws sound like they were written by the local carriers, for their benefit.



    Well that law is not written for the carriers, in fact it is a very general law.  It just is saying that if a company works with a reseller, the reseller and not the original company defines the pricing to the final customer.     It is not because the company involved is Apple, that the law should not be applied

  • Reply 19 of 29
    robmrobm Posts: 1,068member
    tbell wrote: »

    Good points. However, you can't include any terms in a contract that are illegal. If you do, those illegal terms do not need to be followed. So, if the law in Taiwan is Apple can't control certain issues after the sale of the product, and the contract says otherwise, it is likely a Court will just disregard those terms.

    yep ok - but wait.
    What if I was representing a carrier in Taiwan.
    I knew that Taiwanese law granted full ownership and any terms required by Apple would be deemed to be illegal if tested in court.

    Because I want the product, I need the product - I willingly agree to the Reseller Agreement.
    I have demonstrably shown bad faith in entering into that Agreement knowing it was illegal.

    Semantics aside - It's all a storm in a teacup and I'm sure it will get resolved.
    I said earlier it's likely some hang over piece of legislation from yesteryear that needs updating.

    Anyway - what are the carriers going to do ?
    Use a 6+ as a loss leader for a promo lol
  • Reply 20 of 29
    cropr wrote: »
    It is not because the company involved is Apple, that the law should not be applied

    I did not mean to imply otherwise. But if the law isn't specific to the telecoms, but any resellers, then I stand corrected, or rather AppleInsider and the Reuters article it quotes should stand corrected for wording it the way they did. Can you cite a specific reference to this Taiwanese law you described? The issue for me is that the Reuters article does not describe the law in that way, so it appears to contradict your spin.
Sign In or Register to comment.