Apple faces $647K fine in Taiwan for forcing carriers to seek iPhone price approval

Apple faces $647K fine in Taiwan for forcing carriers to seek iPhone price approval
Apple today lost a court battle with Taiwan's Fair Trade Commission, which previously accused the tech giant of meddling in the iPhone pricing tactics employed by Taiwanese carriers. 

The Taiwanese FTC slapped Apple with a $647,000 fine for this back in December 2013, and Apple's countersuit fell short of repealing the fine. Apple can appeal this decision, but if it loses that court battle as well, then the decision will be final.

According to Taiwan's FTC, Apple is breaking the local law by forcing Taiwanese carriers to get its approval for the prices at which carriers sell iPhones. Although this is not an uncommon practice for Apple - the company also does this in the United States - it does seem to be violating Taiwanese laws. Under the country's laws, carriers own the smartphones that they sell to their subscribers, meaning that they are free to price iPhones according to their own desires.

According to the Taiwanese Fair Trade Comission, Apple imposed contract prices for the iPhone 4, the iPhone 4S, the iPhone 5, and the iPhone 5S, while also determining iPhone subsidies, and the price difference between the newer and older iPhone models. In short, Apple was dictating the way Taiwanese carriers should sell iPhones, although this practice seems to have been put on hold for the iPhone 6 series, as the two new smartphones were launched after the original Taiwanese FTC investigation.

According to the International Data Corporation, in the December quarter, Apple's iPhone lineup held a 32 percent market share of the Taiwanese smartphone market. Some of Apple's largest supply chain partners are based in Taiwan, including here companies such as Foxconn, Hon Hai Precision Industry, and TSMC.

In itself, the fine is not a major setback for the iPhone maker, but the decision could set a precedent. It remains to be seen if other countries will follow in Taiwan's footsteps by barring Apple of its ability to dictate iPhone prices on local carriers.

source: Reuters

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29 Comments

1. -ARTE-

Posts: 80; Member since: Jun 14, 2015

They should've fined them with 6million instead. They deserve it. From patent trolling to now bulling.

10. Simona unregistered

I would fine them unlimited fine .. endlessly

16. waddup121 unregistered

647k dollars to apple is like $6.47. Doesn't hurt them at all!

17. tedkord

Posts: 17303; Member since: Jun 17, 2009

It's not the amount, it's the bad press.

24. BobbyBuster

Posts: 854; Member since: Jan 13, 2015

Nothing compared to the paid s-hills. Sammy remains the undisputed king. What a shame. Confess - Shame

25. drunkenjay

Posts: 1657; Member since: Feb 11, 2013

HMM because samsung has more divisions than a mobile company? look at some facts before talking.

27. BobbyBuster

Posts: 854; Member since: Jan 13, 2015

More divisions? The paid s-hills were crap talking HTC. Therefore, it's safe to say it was Samsung-IM period.

28. BobbyDigital

Posts: 2124; Member since: May 29, 2014

Like you're a paid Apple shill you mean? And my GROUPIE GIRL to boot.

2. shiftt

Posts: 333; Member since: May 03, 2015

Apple does stupid bullsh** to get around and cheats there way through these types of things. I wouldn't be surprised if Obama comes to their rescue again. Apple is irrelevant at this time and point. Next article please.

5. -ARTE-

Posts: 80; Member since: Jun 14, 2015

Samsung had patents to totally shut down Apple by selling there Toys-R-Us kids Iphones. So lucky, yet again the president Obama had to save and rescue them. Lol.

9. Planterz

Posts: 2120; Member since: Apr 30, 2012

Hey -ARTE-, do us Android fans/Apple haters a favor and STFU. Your idiotic, ignorant, illiterate rantings aren't doing us any good.

11. -ARTE-

Posts: 80; Member since: Jun 14, 2015

The truth is idiotic now, really? Lmfao. I'm not making bs up and posting. Google it, you will find the truth. What did I say that was idiotic and illiterate? Is it hard to accept the truth?

7. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Obama can't Taiwan is a sovereign nation and Obama cannot tell their courts what to do. Just to thumb their noses at the administration if they did try to interfere Taiwan would probably increase the fine to 1 billion. Apple is not irrelevant at this time they are still one of the biggest players in the mobile space. However, nothing last forever ( next big thing is always around the corner). It is their time now - tomorrow will belong to someone else and then Apple will be fighting to stay relevant.

12. willard12 unregistered

I had no idea that Taiwan was a sovereign nation.

3. Ordinary

Posts: 2454; Member since: Apr 23, 2015

I dont think other countries will sue

4. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

If you break the law of said country then you must face the consequences. Does not matter if you are Google, Microsoft Apple, Nokia etc.. If you know the rules and you purposely violate them then you have to be prepared to take whatever punishment that comes. Now, even though this is almost a billion dollar judgment it will not hurt Apple because the have close to 200 billion off shore in their coffers.

6. -ARTE-

Posts: 80; Member since: Jun 14, 2015

And they've never spent a single penny on R@D, just recycling the same design and phone with old outdated hardware, and excellent brainwashing therapies. Telling "if you don't own an iPhone, you don't own an iphone". And there's everyone else spending lots of money on latest techs and hardwares, and it's not selling well. Apple sells cause of its logo, orelse thier history.

8. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Remember people grow up and grow wiser. there is always the next generation that wants nothing of the past generation to identified them. They want to chart their own identifying characteristics. What identifies this generation in terms of hardware is the iPhone like it or not. However, these teens and yuppies ( lack of a better term ) don't stay that way forever they do grow up. Their music preferences change, their priorities change etc.. and the upcoming generation will induct another manufacture and device as the cool hip thing to have. Remember - Motorola, Nokia, Blackberry were at one time or another the devices to have tomorrow it could be Asus, Xiamo who knows. One thing the industry has shown is that no one stays on top forever and I don't think Apple will break that cycle.

13. justrt

Posts: 446; Member since: Jul 10, 2014

Kick 'em out, Taiwan! You don't need them!

15. bucky

Posts: 3776; Member since: Sep 30, 2009

Wonder what would happen if apple did stop in Taiwan.

20. tedkord

Posts: 17303; Member since: Jun 17, 2009

Life there would go on.

26. dancheung77

Posts: 202; Member since: Jan 28, 2015

If apple stop stop selling in Taiwan, people will go to Hong Kong or Japan, China to get it, just like when iPhone weren't available in those countries the first couple of years, people were in line at the Hong Kong Apple Store, most of them were from either mainland China or Taiwan.

14. bucky

Posts: 3776; Member since: Sep 30, 2009

I like that apple makes sure to keep a stern hand on their devices. Better than being an electronic billboard full of permanent advertisements. The iPhone stays unmolested this way and their resale value Stays strong.

18. tedkord

Posts: 17303; Member since: Jun 17, 2009

You've got to follow the local laws, Apple. Whether you like it or not.

19. dimas

Posts: 3343; Member since: Jul 22, 2014

It's unclear how they try to dictate the taiwan pricing. Do they dictate the carriers to make taiwan iphones add more mark up or to make the price more closer to the US price?

21. tedkord

Posts: 17303; Member since: Jun 17, 2009

They tell them what to charge.

22. dancheung77

Posts: 202; Member since: Jan 28, 2015

iPhone is expensive in Taiwan, every other phone with price drop after a few month but iPhone still stay the same. Based on a 50usd plan on a 30 month contract, the current promotion for iPhone is 200usd and you have to pay in advance the amount of 500usd, so a total of 700+. I'm only talking about a 9 month old iPhone 6 with 16 gb.

23. meanestgenius

Posts: 21769; Member since: May 28, 2014

Apple and their damn anti-competitive practices. They should have gotten a higher fine for this.

29. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Please read this too.http://www.neowin.net/news/apple-criticized-for-requiring-publishers-who-arent-interested-in-apple-news-to-opt-out How come PA isn't reporting this? Come on PA. Take the good with the bad. Apple is bullying publishers of News over the new News App. Read it and weep.

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