Apple’s (NASDAQ:AAPL) attempts to sell the iPhone at a premium price around the world has landed the company in trouble as Taiwan’s Fair Trade Commission, or FTC, has fined the company for allegedly dictating the smartphone’s pricing to the country’s telecom companies.
FTC said on Wednesday that it had slapped Apple with a $670,000 fine for interfering with the iPhone's pricing plans at Taiwan’s mobile-service providers and handset distributors. Although Apple can appeal against the fine, it could face a fine of up to $1.6 million (NT$50 million) if it does not meet the terms, the Wall Street Journal reported.
“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,” FTC said in a statement.
According to the regulator, Apple has violated Article 18 of Taiwan’s Fair Trade Act by advising the country’s three main mobile-service providers -- Chunghwa Telecom Co. (NYSE:CHT), Far Eastone Telecommunication Co. (TPE:4904) and Taiwan Mobile Co. (TPE:3045) -- on how much they should charge for iPhones. Apple was also accused of asking the companies to adjust their rates.
FTC said that the Cupertino-based tech giant has no right to dictate the price of iPhones sold by local carriers after it has sold them the distribution rights for the device. As the three carriers paid Apple for those rights, they are allowed to distribute or resell iPhones at their own convenient price, the FTC said.
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The ruling applies only to iPhones, while pricing for other Apple devices such as iPads and Macs will not be investigated, the FTC statement said. Officials at Apple Asia were yet to respond to the ruling, reports said.
In October, Samsung (KRX:005935) was fined $340,000 by Taiwan's FTC for paying marketing companies to attack HTC (TPE:2498) in a defamatory Internet campaign.