Apple Fined $670,000 In Taiwan For Price Fixing

Dec 25 2013, 6:46am CST | by

Another one of these little stories that show the difficulty that multinationals have around te world. What might be considered entirely respectable behaviour in one market can end up being illegal in another. Here Apple's crime was to try and dictate what price iPhones would be sold at. Given that Apple has sold distribution rights to the local firms, Apple is therefore not allowed to pressure them on their pricing:

Apple Inc. has been fined 20 million New Taiwan dollars (US$670,000) and ordered to stop interfering with mobile service providers and handset distributors’ pricing, Taiwan’s Fair Trade Commission said on Wednesday.

Apple can appeal but may face a fine up to NT$50 million if it doesn’t comply, the commission said.

It found the Cupertino-based company violated article 18 of Taiwan’s Fair Trade Act by telling Taiwan’s three main service providers how much to sell iPhones for. Apple also asked Chunghwa Telecom Co. CHT +1.37% , Far Eastone Telecommunication Co. and Taiwan Mobile Co. 3045.TW +0.52% to adjust rates.

The U.S. computer company has no right to meddle in companies’ iPhone pricing plans after selling them distribution rights, the commission said.

The three carriers can distribute or resell iPhones at their complete discretion after paying Apple for those rights, the commission added.

We can all understand what Apple was trying to do: the iPhone is a premium product and the company obviously wants it to sell at a premium price. This is part of the way that the company protects its brand. So they don’t want the three distributors cutting prices in order to gain further market share: and thus the pressure on pricing.

It is indeed true that the distributors are going to pay Apple exactly the same price whatever they charge the consumer. So in the short term it’s no skin off Apple’s nose if they do get into a price war. But there’s that longer term thing of where the iPhone is positioned in the market. And as we know, Tim Cook has repeatedly said that Apple just isn’t interested in chasing market share. It’s perfectly happy being regarded as the aspirational must have at the top of the market spectrum.

However, as we can see, this tactic doesn’t go down very well with the market regulator. At least in Taiwan it doesn’t, it might be just fine elsewhere (here in Europe we’d probably call it retail price maintenance which is similarly illegal except in very special circumstances). We’ve a similar story with Apple and consumer warranties over here in the EU. AppleCare offers one set of rights but these are lower than the statutory rights that the law gives consumers. Or rather they were: Apple is changing the terms after fines from the Italian regulator. Just another reminder that we don’t really have a global market as yet: rather a series of different national ones and the rules and the laws can be different in each one.

Source: Forbes Apple

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Apple Continues to Depend on Samsung
Apple Continues to Depend on Samsung
Despite previous speculation, Apple still relies on Samsung for the production of the components of its major devices
 
 
Apple Black Friday Deals are on Sale in MacMall Black Friday 2014 Sale
 
 
The Black Friday 2014 Sales You can Shop Today 11/26
The Black Friday 2014 Sales You can Shop Today 11/26
Over 20 Black Friday 2014 sales are already launched. Get the deals early to get your head free for the hard to get Black Friday deals to be released on Thanksgiving Day.
 
 
Target Black Friday Pre Sale launched Online
Target Black Friday Pre Sale launched Online
The Target Black Friday 2014 pre sale is live online offering $100 Gift Cards with iPad Air and iPad mini 3 purchases and many more deals.
 
 
 

Latest from the Network

Black Friday Store Maps Download
Black Friday 2014 Online Sales are underway since the early morning hours of Thanksgiving Day. If you are planning to also hit the mall for Black Friday 2014 deal hunting then we recommend to get the Black Friday store...
Read more on Black Friday Countdown
 
South African president to visit China in December
Pretoria, Nov 27 (IANS) South African President Jacob Zuma will pay a state visit to China next month to further strengthen strategic relationship, it was announced Thursday. The visit, scheduled for Dec 4 and 5, will...
Read more on Politics Balla
 
Target Black Friday 2014 Sale has launched Online
The Target Black Friday 2014 Sale will begin in stores at 6pm on Thanksgiving Day, but has already launched in full now online at Target.com.Do not miss the hottest iPad Air 2 Black Friday deal of the season. Target...
Read more on Black Friday Countdown
 
Caitlin Moran seeks sexy actress
Caitlin Moran needs an actress who can cope with an ''enormous penis''. The 39-year-old author has started hunting for an actress who can play the lead role in the film adaptation of her best-selling novel 'How To Build...
Read more on Movie Balla
 
Johnny Depp doesn't care about critics
Johnny Depp doesn't care about film critics. The 51-year-old actor no longer worries about proving his critics wrong and is now ''game for anything'' after coming to the realization that he was becoming too preoccupied...
Read more on Movie Balla
 
Idris Elba: Fame's made me paranoid
Idris Elba admits fame has made him ''paranoid'' about people. The 42-year-old actor is now one of the most recognizable faces in TV and film due to his roles in 'Luther', 'Thor', 'Prometheus' and 'Pacific Rim' but he...
Read more on Celebrity Balla
 
Khloe Kardashian cooking Thanksgiving dinner for family
Khloe Kardashian is cooking Thanksgiving dinner for the entire Kardashian family. The 30-year-old reality TV star is hosting her relatives for the annual US holiday today (11.27.14) for the first time ever because...
Read more on Celebrity Balla
 
Taylor Swift reveals Thanksgiving plans
Taylor Swift is looking forward to tucking into sweet potato casserole during her Thanksgiving meal. The 24-year-old singer said the delicious snack is her favourite side dish to enjoy while celebrating the American...
Read more on Celebrity Balla
 
Kourtney Kardashian nauseous pregnancy
Kourtney Kardashian has felt sick throughout her latest pregnancy. The 35-year-old reality star is currently expecting her third child with partner Scott Disick and she admits she starts to feel nauseous if she doesn't...
Read more on Celebrity Balla
 
Apple Continues to Depend on Samsung
Apple is still working with Samsung, even with more emphasize, as the tech giant reportedly engages the Korean company to provide different components for the iPhone 6 and the upcoming Apple Watch.According to Mac...
Read more on Apple Balla