Taiwanese regulator slaps TW$20 million fine on Apple Inc for restricting prices

By Nicel Jane Avellana

Dec 26, 2013 12:23 AM EST

Apple Inc has been fined TW$20 million or $666,700 by the Fair Trade Commission of Taiwan for limiting the prices charged by local telecom carriers for their iPhone contracts, Reuters reported. This is the first time that Apple was levied a penalty for this practice, the report said.

According to the regulator, Apple Inc unit Apple Asia made it a requirement for carriers to get its permission before setting its iPhone contract prices, which had violated Taiwan's free trade laws. An FTC statement said Apple Asia instructed carriers to change service contract as well as subsidy prices, which led to the TW$20 million penalty.

FTC Spokesman Sun Lih-chyun was quoted in the report as saying that the three carriers in Taiwan, namely, Chunghwa Telecom Co Ltd, Taiwan Mobile Co Ltd and Far EasTone Telecommunications Co Ltd, had the right to set prices because their contracts with Apple gave them reseller rights.

News agency AFP also quoted a statement from the regulator, who said, "Apple deprived the telecom operators of liberty to decide on the prices based on their own cost structures and competitive market situation, to restrict competition ... and violate the fair trade law." The FTC urged the tech giant to stop its illegal actions right away.

The FTC said the Cupertino, California-based firm can still appeal the decision. Should it choose to not comply, it can be fined an additional TW$50 million, the AFP report said.

Reuters reported that Apple, which once held a commanding lead in the smarthphone market, is now facing challenges in the rapidly-evolving segment. Apple recently said that it had inked a long-awaited agreement with China's biggest telecom carrier China Mobile Ltd to offer its iPhones. The deal raises hopes that the tech giant will be able to make substantial inroads in the biggest smartphone market in the world, the report said.

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