The Fair Trade Commission (FTC) of Taiwan has slapped a fine of $647,124 on Apple over anti-competitive practices.
On Wednesday, June 16 a Taiwanese court announced a fine of TW$20 million, about $647,124, on Apple. Per the lawsuit, Apple required big telecom operators in Taiwan to take its approval for deciding on the price of the company's popular iPhone series. Such a practice is taken as a violation of law in the island nation.
"Apple limited telecoms from setting contract price for its 4, 4S, 5 and 5S models, which is against the law," says Chiu Yung-ho a spokesperson for FTC.
The court also revealed that Apple still has the right to appeal the decision.
In Taiwan, iPhones are often bundled with service plan contracts from one of the three major telecom operators in the country: Chunghwa Telecom, Taiwan Mobile and Far EasTone Telecommunications.
Chunghwa Telecom commented that it respects the decision taken by the FTC; however, Far EasTone and Taiwan Mobile did not comment on the latest fine slapped on Apple.
The FTC suggests that the case is an example of a big company being fined for restricting its telecom partners for setting its own price and, therefore, affecting competition in the market. The FTC suggests that Taiwanese telecom operators are free to set prices of the handsets they offer as bundle and should not be pressured by a company like Apple regarding pricing strategy.
FTC added that in Taiwan the vendor loses the right to set price of a product once it has been transferred to a third party.
Smartphone shipments are increasing throughout the world and iPhones are one of the most popular smartphones globally. Another report suggests that total smartphone shipments in Taiwan in 2014 was 9.72 million units, which is 29 percent higher when compared to 7.56 million units shipped in 2013.
Apple was not the leading the smartphone market in Taiwan until the final quarter of 2014. The launch of iPhone 6 and the iPhone 6 Plus led to a demand of iPhones in Taiwan, and in Q4 2014 Apple was able to grab 32 percent market share and became the most-popular handset.
Asustek was at the second position with a market share of 18 percent. HTC was in the third position and Samsung at fourth with market shares of 15 percent and 14 percent in Q4 2014.
Photo: Karlis Dambrans | Flickr
