Taiwan fines Apple $647K for forcing carriers to seek iPhone pricing approval
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.
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.
Comments
Y-ouch, that's gotta hurt! /s
Yea - a hangover from Ye olden days when carriers loaded their own crap software and ux.
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.
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!
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.
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.
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.
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.
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
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
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.