Taiwan fines Apple for unfair practices

Taipei, Dec 26: Taiwan’s Fair Trade Commission (FTC) Wednesday slapped Apple Inc’s Asia subsidiary with a fine of 20 million new Taiwan dollars ($666,800) for pricing irregularities in iPhone 5S and 5C, Xinhua reported.

The FTC said in a statement that Apple Asia violated the island’s free trade regulation by restricting local telecom operators’ iPhone service contract prices for years, sparking public complaint.

The island’s three largest telecom operators — Chunghwa Telecom, Taiwan Mobile Corp. and Far EasTone — began selling iPhone 5S and 5C Wednesday.

After investigating contracts signed by the three carriers and their email correspondence, the FTC said the three telecom carriers signed dealership contracts which afforded them discretion in pricing.

However, the investigation showed that all three carriers sent their proposals on telecom service charges and iPhone service contract prices to Apple for approval before launching each series.

Apple was found to have told telecom operators to alter prices for iPhones, subsidising the price spread between service contracts for different iPhone series.

The three telecom carriers are the major distribution channels for iPhones in Taiwan, as iPhones sold without service contracts account for less than 10 percent of the total in the island.

It is the first time Apple has been fined for dictating service contract price, the FTC said, warning that further violations will lead to larger fines.