Apple Fined by Taiwan's Fair Trade Commission for Price Restrictions

Apple Inc. has been fined US$670,000 (20 million New Taiwan dollars) by Taiwan's Fair Trade Commission (FTC) for interfering and restricting the prices charged by local mobile service providers and handset distributors, the Wall Street Journal reported.

The commision said that the Cupertino-based company had been instructing Taiwan's top three mobile service providers on how to price the iPhone, a move that was against the article 18 of Taiwan's Fair Trade Act. 

This was the statement made by the commission:

"We've found the Cupertino-based company violating article 18 of Taiwan’s Fair Trade Act by telling Taiwan’s three main mobile service providers/distributors how much to sell iPhones for. Apple has asked Chunghwa Telecom Co., Taiwan Mobile Co. and Far Eastone Telecommunication Co. to adjust rates.

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.

The U.S. computer company has no right to interfere in companies’ iPhone pricing plans after selling them distribution rights. The three carriers can distribute or resell iPhones at their complete discretion after paying Apple for those rights."

The tech giant had asked Far Eastone Telecommunication Co, Taiwan Mobile Co. and Chunghwa Telecom to adjust the  rates. The three  companies  were found to submit Apple their pricing plans  through email  correspondence to  be approved before  the  products  were  sold  by  local  handset  distributors,  according  to a statement by FTC.

Apple has also been warned that it may face a more substantial charge if it doesn't  stop restricting the local firms' iPhone pricing. While Apple had sold distribution rights to local mobile  service providers and mobile phone distributors, it had no  such rights  to pressure the local  firms on the  adjustment of pricing rates.

Apple can appeal if it wishes but this may extend the current fine to NT$50 million if it fails to comply with the initial ruling, the commission said.