Apple fined $670,000 in Taiwan for interfering with iPhone pricing

By Trevor Mogg December 26, 2013

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Apple has been slapped with a sizable NT$20 million (US$670,000) fine by Taiwan’s Fair Trade Commission (FTC) for interfering with pricing procedures carried out by mobile service providers and mobile phone distributors, the Wall Street Journal reported.

The fine, which was handed down Wednesday, came after it was found the tech giant had been instructing Taiwan’s top three mobile providers on how to price the iPhone, behavior that violated a section of Taiwan’s Fair Trade Act.

The FTC said that Apple “has no right to meddle in companies’ iPhone pricing plans after selling them distribution rights”, the Journal reported, adding that they have the right to resell or distribute the Cupertino company’s handsets in any manner they wish having paid out for those rights.

The commission said that after examining email correspondence between the iPhone maker and the Taiwanese mobile companies, “we discovered the companies submit their pricing plans to Apple to be approved or confirmed before the products hit the market.” The ruling doesn’t apply to other Apple products, such as the iPad.

Selling the iPhone and other products at premium prices is part of Apple’s strategy to portray itself an aspirational brand, which is likely why it was reluctant to see the Taiwanese mobile providers possibly enter into a price war with its handset.

In October, Taiwan’s FTC also punished Apple’s Korean rival Samsung after it was discovered the company had been paying students to post negative comments in local forums about devices made by Taiwanese tech firm HTC. Despite Samsung’s Taiwan base promising to adopt a marketing strategy that fell in line with Samsung’s philosophy of “transparent and honest communications with consumers,” the FTC fined the company NT$10 million ($335,000).

As for Apple’s fine, the FTC said the tech giant can appeal if it wishes, though failure to comply with Wednesday’s ruling could result in an even larger fine of up to NT$50 million ($1.7 million).

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