The Fair Trade Commission (FTC) yesterday fined Apple Asia Ltd NT$20 million (US$666,220) for restricting local telecommunications companies to set their sale prices of iPhones — a move that inhibits competition.
“The commission’s ruling makes Taiwan the first country to fine Apple Inc’s subsidiaries concerning their handset distributors’ pricing, while there is a similar ongoing investigation concerning Apple Inc for impeding competition in Europe,” Fair Trade Commission Vice Chairman Sun Lih-chyun (孫立群) said.
Apple Asia Inc has to stop the practice immediately once the company receives official documentation from the government, otherwise the company may be subject to another fine of NT$100,000 up to NT$50 million, Sun said.
Photo: Lo Pei-der, Taipei Times
“If Apple Asia hired local companies to provide services and sell iPhones, the company can set prices for them,” Sun said. “However, based on the contracts between Apple and their handset distributors, the company actually sold its iPhones to local companies, therefore local companies should have the right to set prices themselves.”
According to Sun, Apple Asia violated Article 18 of the Fair Trade Act (公平交易法), which states that when an enterprise supplies goods to its trading counterparts for resale to a third party, the trading counterparts shall “be allowed to decide their resale prices freely.”
The contracts between Apple Asia and Chunghwa Telecom Co (中華電信), Taiwan Mobile Co (台灣大哥大) and Far EasTone Telecommunications Co (遠傳電信) showed that Apple Asia demanded the three companies to send their iPhone pricing plans for its review, Sun said.
In e-mails between high-ranking officials of the companies, the commission also found evidence that Apple Asia required local companies to adjust plans they proposed concerning the prices for iPhones, the subsidies they offer for iPhones with contracts, and the price difference between the iPhone 4S and the iPhone 5, he said.
The contracts between Apple Asia and the three local companies also stipulated that the conditions they set for buying iPhones, such as subsidies these companies offer for buying iPhones with contracts, cannot be lower than those of their competitors, Sun said.
The three local companies also needed to submit their promotion plans for iPhones for the approval and confirmation of Apple Asia, he added.
Sun said the commission investigated three other smartphone makers, HTC Corp (宏達電), Sony Corp and Samsung Electronics Taiwan, but none of them has reached similar contracts with local service providers.
The three companies account for 80 percent of the local market for telecommunication services, Sun said, adding that 90 percent of iPhones sold in Taiwan are from the three companies, with most of the headsets sold with contracts.
Sales of iPhones in Taiwan account for 1 percent of iPhones sold by Apple Inc around the world, Sun said.
The commission established the case in April this year when FTC Chairman Wu Shiow-Ming (吳秀明) was urged by legislators to investigate why all local mobile service providers had set the same prices for iPhones, Sun said.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old