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.
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