Apple Accused Of iPhone Price Fixing In Taiwan

The Taiwan Fair Trade Commission (FTC) has slapped Apple with a fine of 20 million New Taiwan dollars, or $670,000, for allegedly interfering with mobile service providers' iPhone pricing plans after selling those provider distribution rights for the phones.

According to a report this week from Wall Street Journal, the FTC found that Apple has violated article 18 of Taiwan's Fair Trade Act by dictating how much Taiwan's three main service providers -- Chunghwa Telecom, Far EasTone Telecommunications and Taiwan Mobile Co. -- should charge for the iPhone and the device's service plans.

Apple was allegedly asking the three carriers to submit their iPhone pricing plans to Apple for review before moving forward with the plans.

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"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," the Taiwan FTC said in a statement, according to the Journal.

The FTC noted that, because these mobile carriers paid Apple for iPhone distribution rights, they are allowed to set their own prices for the phones.

Apple did not immediately respond to CRN's request for comment.

If Cupertino, Calif.-based Apple does not comply with the Taiwan FTC's $670,000 fine, the smartphone giant could face an increased fine of 50 million New Taiwan dollars, or $1,668,000. The Journal said the FTC's ruling applies only to iPhones, and that there are no plans to investigate the pricing of iPads.

Taiwan's price-meddling allegations against Apple come on the heels of the company landing a major multiyear agreement with China Mobile, the world's largest telecommunications carrier at 763 million subscribers.

The deal, which had been rumored for years, will put the iPhone 5s and iPhone 5c in both Apple's and China Mobile's retail stores in mainland China starting Jan. 17.

In 2009, Apple inked a three-year iPhone deal with China Unicom, the country's second-largest carrier.

PUBLISHED DEC. 27, 2013