Apple Fined by Taiwanese Regulators Over iPhone Price Fixing

[MacRumors]

Apple has been fined 20 million New Taiwan dollars ($670,000) by the Taiwanese Fair Trade Commission after the company was found to be unlawfully influencing the price of the iPhone on the country's cell phone carriers, reports The Wall Street Journal.

Under article 18 of Taiwan's Fair Trade Act, an enterprise is not allowed to decide the prices of their goods after handing them over to a third party for resale. The company reportedly asked Taiwan's three major service providers to adjust iPhone rates, including Chunghwa Telecom, Far Eastone Telecommunication, and Taiwan Mobile.

"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," it said in a statement.

Apple may choose to appeal the Taiwanese government's decision, however it may face a fine of 50 million New Taiwan dollars ($1,700,000) if it does not comply with the initial ruling. Furthermore, the ruling itself applies to iPhones only, with the government having no current plans to investigate Apple's price interference with iPads in the region. Apple's office in Taiwan has also not issued a statement on ruling.

Article Link: Apple Fined by Taiwanese Regulators Over iPhone Price Fixing

 

[tdiaz]

So.. don't actually transfer the iPhone to the third party retailer, just grant them the ability to sell it, through Apple's back end. OTOH, the whole industry is driven by this model.

 

[Klae17]

Well Apple lets Wal Mart sell their phones for $27 and $127.

 

[fermat-au]

If Apple want to sell phones outside the US they need to do so under the laws of that country.

Apple have far more control over pricing in the US than they have in most other parts of the world. In Australia the iPhone is sold under a different model than the US. Here in Australia people can buy the iPhone unsubsidised and unlocked from Apple or subsidised from the carrier. Apple sets the wholesale price but the carriers set the retail price. This creates competition between the carriers to give the user the best deal (monthly cost) to get an iPhone.

 

[OriginalMacRat]

Well Apple lets Wal Mart sell their phones for $27 and $127.

That's not the price of the iPhone.

It's a down payment you pay for the privilege of signing up for a 2yr contract.

 

[Twimfy]

That's not the price of the iPhone.

It's a down payment you pay for the privilege of signing up for a 2yr contract.

Yup, I find this whole "get an iPhone for £99" marketing thing totally mind boggling. More often than not if you sit and work out how much you're paying over that two years minus the cost of the tariff (as it would be if you just signed up for a plan with no phone) you're paying about twice the amount for the device itself.

That's why I paid a hefty "deposit" upfront for my 5C practically buying the phone outright and then ensuring that my plan costs very little per month. The downside of this is that I don't really own the phone and I'm tied to the network but at least my buy out cost for the contract isn't something absurd if I wanted to go down that route.

 

[macs4nw]

Aah, the complexities and intricacies of international trade. What’s allowed, or basically tolerated in one country, is clamped down upon, and fined in another jurisdiction. More international legal experts needed?

 

[snowmen]

you're paying about twice the amount for the device itself.

No, you're not if you want to use your iPhone with data.

I've done extensive calculation on Canadian market, and it is really not much of differences even if you added in the unlock fee of whatever mobile company charges. For one company it even costs more to buy your 5c at original price.

Fact is... you'll use your phone no matter what... Are you gonna stop using your phone or switch mobile company in one year rather than 2 years?

 

[mpantone]

Well Apple lets Wal Mart sell their phones for $27 and $127.

As far as I can tell, this is an issue about Taiwan's retail market, not what one American retailer does.

To my knowledge, Taiwan retail laws are not enforceable in the USA.

I know this is a rather rhetorical question, but are people on the Internet really this bad at reading comprehension?

 

[Reason077]

Yup, I find this whole "get an iPhone for £99" marketing thing totally mind boggling. More often than not if you sit and work out how much you're paying over that two years minus the cost of the tariff (as it would be if you just signed up for a plan with no phone) you're paying about twice the amount for the device itself.

This is not always true. There's certainly some crap offers out there, but if you shop around a bit you'll find iPhone deals (on O2 for example) that are very competitive - where you're essentially paying only the equivalent of a sim-only monthly tariff (£10 or so) once you subtract the cost of the phone over 2 years.

So essentially you're getting free credit on the cost of the phone, in exchange for your loyalty.

 

[Parasprite]

As far as I can tell, this is an issue about Taiwan's retail market, not what one American retailer does.

To my knowledge, Taiwan retail laws are not enforceable in the USA.

I know this is a rather rhetorical question, but are people on the Internet really this bad at reading comprehension?

I think they meant that in the USA Apple was allowing retailers to sell their iPhones at a different retail price than the other retailers, therefore are they even doing this practice in the USA?

Not that I am agreeing that Walmart has any such relevance here, or that the statement even makes much sense.

 

[KPOM]

Aah, the complexities and intricacies of international trade. What’s allowed, or basically tolerated in one country, is clamped down upon, and fined in another jurisdiction. More international legal experts needed?

To be fair, $670,000 isn't that much (it's about 1000 iPhone sales). It's a relatively token sanction for violating a rather arbitrary local law. Apple can easily adjust its practices in the future to avoid the violation.

 

[Rad99004]

There is no price fixing on phones

 

[brdeveloper]

Aah, the complexities and intricacies of international trade. What’s allowed, or basically tolerated in one country, is clamped down upon, and fined in another jurisdiction. More international legal experts needed?

Well, it's pretty obvious for the sake of liberalism that no company should enforce any pricing policy for its resellers. If you live in a capitalist country where you want free competition working healthy, that's simply the right thing to do...

 

[anomie]

Well, it's pretty obvious for the sake of liberalism that no company should enforce any pricing policy for its resellers. If you live in a capitalist country where you want free competition working healthy, that's simply the right thing to do...

Free competition never worked healthy.

 

[claus1225]

too little

$700,000 is like $5 bucks to Apple. Also, Taiwan market is pretty irrelevant to Apple.

 

[coolspot18]

So.. don't actually transfer the iPhone to the third party retailer, just grant them the ability to sell it, through Apple's back end. OTOH, the whole industry is driven by this model.

But doesn't this go back to the whole shipped versus sold issue?

 

[Twimfy]

No, you're not if you want to use your iPhone with data.

I've done extensive calculation on Canadian market, and it is really not much of differences even if you added in the unlock fee of whatever mobile company charges. For one company it even costs more to buy your 5c at original price.

Fact is... you'll use your phone no matter what... Are you gonna stop using your phone or switch mobile company in one year rather than 2 years?

This is not always true. There's certainly some crap offers out there, but if you shop around a bit you'll find iPhone deals (on O2 for example) that are very competitive - where you're essentially paying only the equivalent of a sim-only monthly tariff (£10 or so) once you subtract the cost of the phone over 2 years.

So essentially you're getting free credit on the cost of the phone, in exchange for your loyalty.

You're both right, I know most of the time it's usually a good deal but it is possible to get stung now and again, that's kind of why these deals exist, the low "cost" is to get you in the door. More often than not most people can work out what is good and what isn't for themselves but I know a few poor souls who have taken out contracts for a 4S recently paying up front and they're paying quite large monthly bills for 2 years on top.

 

[JAT]

the company was found to be unlawfully

So there are laws. Interesting.

 

[Mrbobb]

EVERYBODY does it. If they get caught, $675K is a bucket change, if they don't get caught then hey.

 

[Klae17]

As far as I can tell, this is an issue about Taiwan's retail market, not what one American retailer does.

To my knowledge, Taiwan retail laws are not enforceable in the USA.

I know this is a rather rhetorical question, but are people on the Internet really this bad at reading comprehension?

Lets not be dim about it. I'm saying apple lets Walmart discount it so much, why would they have a problem with Taiwan doing the same? You clearly demonstrated you text enlargement skills though. Very impressive.

 

[oplix]

note to Apple: New World Order hasn't started yet.

 

[Donoban]

Yup, I find this whole "get an iPhone for £99" marketing thing totally mind boggling. More often than not if you sit and work out how much you're paying over that two years minus the cost of the tariff (as it would be if you just signed up for a plan with no phone) you're paying about twice the amount for the device itself.

That's why I paid a hefty "deposit" upfront for my 5C practically buying the phone outright and then ensuring that my plan costs very little per month. The downside of this is that I don't really own the phone and I'm tied to the network but at least my buy out cost for the contract isn't something absurd if I wanted to go down that route.

Agreed.

In Australia you could get an iPhone 32gb on an $82 month plan over 24 months with Telstra (major telco) vs buying it outright for $1000 + going on a $19 a month plan. You're about $500 ahead after 2 years. Not much money? Thats probably 6 months of groceries, a set of new tyres for a standard car, etc, etc...

But hey, who am I to dish out financial advance, I'm just some random on the internet.

 

[stylinexpat]

$700,000 is like $5 bucks to Apple. Also, Taiwan market is pretty irrelevant to Apple.

There are roughly 24 million people on that island. Say 10-15 million wanted an iPhone at an average of $650 per phone that looks like a relevant number to me.

$700K is a drop in the bucket for Apple though but the market is not irrelevant.

 

[Mousse]

Odd law. Well, not my place to judge. Still I think it's a strange law.

Seem a manufacturer can't suggest a price. We see it all over the place in the US: MSRP (Manufacturer's Suggested Retail Price). It doesn't mean they're forcing the retailer's to sell at that price. Apple ain't TELLING them to sell at a certain price (or else), are they?