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

Users Facing Wi-Fi Connectivity Issues in the New OS X Yosemite
Users Facing Wi-Fi Connectivity Issues in the New OS X Yosemite
Users complain about different problems related to the Wi-Fi, including abrupt disconnection and slow transfer rate
 
 
Court Enables Police to Compel Users Unlocking the iPhones with the Fingerprint
Court Enables Police to Compel Users Unlocking the iPhones with the Fingerprint
The Judge rules that it will be permissible for police to force an alleged criminal to unlock his device with the fingerprint
 
 
iPhones Could Be Coming To Iran
iPhones Could Be Coming To Iran
The Cupertino company is in talks to warm relations with the isolated country
 
 
Apple’s CEO Tim Cook Comes Out As Gay
Apple’s CEO Tim Cook Comes Out As Gay
The CEO publicly acknowledged his sexuality for the first time
 
 
 

Latest from the Network

Power outage across Bangladesh as national grid collapses
Dhaka, Nov 1 (IANS) Power outages Saturday hit several places in Bangladesh, including the capital Dhaka, due to the collapse of the national grid. Reports of power cuts were coming in from several other places...
Read more on Business Balla
 
Space plane crash: Sir Branson 'shocked' but to 'persevere'
New York, Nov 1 (IANS) Richard Branson, founder of the Virgin Group, was "shocked and saddened" by the news of the Virgin Galactic passenger space plane crash but said that he would "persevere". The space plane...
Read more on Politics Balla
 
Drugs to abet cancer cells suicide found
London, Nov 1 (IANS) British scientists have found a drug combination that can trigger the self-destruct process in lung cancer cells -- paving the way for new treatments. The combination of two drugs, called TRAIL...
Read more on Business Balla
 
Boko Haram leader says kidnapped girls married off
Lagos, Nov 1 (IANS) The leader of the Nigerian Boko Haram insurgents, Abubakar Shekau, has in a new video said the over 200 abducted schoolgirls have been married to members of the group. The video, released Friday,...
Read more on Politics Balla
 
Another Burkina Faso army officer claims power
Ouagadougou, Nov 1 (IANS) Burkina Faso's senior military officer Isaac Zida, who was in command of the presidential guard, Saturday announced via a televised speech that he has seized power as head of state during the...
Read more on Politics Balla
 
Climate change threatens global health security: UNEP
San Juan, Nov 1 (IANS/EFE) The rapid propagation in recent years of infectious diseases such as Malaria, Chikungunya and even Ebola is one more example of how climate change threatens global health security. "Climatic...
Read more on Politics Balla
 
Nine killed in Afghanistan suicide bombing
Kabul, Nov 1 (IANS) Nine security personnel were killed while 20 civilians were injured in a suicide car bombing in the eastern Afghan province of Lowgar Saturday, the provincial government spokesman said. "One...
Read more on Politics Balla
 
Al Pacino considered name change
Al Pacino considered changing his name to ''Sonny Scott'' when he started acting. The 74-year-old star was advised to alter his moniker when he began working in the movie industry because any stars with an ''ethnic...
Read more on Movie Balla