Apple Loses Anti-Competitive Practice Case

Apple Loses Anti-Competitive Practice Case

The iPhone maker has lost a Taiwanese lawsuit in which it had been accused of following anti-competitive practices. A Taiwan court has ordered Apple Inc. to pay a fine that’s about $647,124. Previously, the Fair Trade Commission of the island had levied the fine against the US smartphone giant for requiring its major telecom partners in Taiwan to receive approval for the pricing plans of its immensely popular iPhone series before the device was released in the public. This is a direct violation of the Taiwanese law. Subsequently, Apple Inc. had countersued and they ended up losing it. The spokesman for the commission said that telecoms had been restricted by the US firm from setting contract prices for the iPhone 4, 4S, 5 and 5S models, which is not in accordance with the law.

Nevertheless, the court said that Apple still had the option of making an appeal. There are three major telecom companies in Taiwan, which are Far EasTone Telecommunications Co Ltd, Taiwan Mobile Co Ltd and Chunghwa Telecom Co Ltd. Contracts for the iPhone are typically available from one of these carriers. FarEasTone and Taiwan Mobile didn’t comment on the matter whereas Chunghwa only said that the actions of the Fair Trade Commission were reasonable and didn’t elaborate further.

This case is the first example of the tech powerhouse being subjected to a jurisdiction fining for restricting the ability of its telecom partners in setting their own price, as per the commission. Telecom companies that are based in Taiwan have full ownership of the phones they are selling and they have the right to set the prices as they see fit, according to the directives of the commission. A member of the commission said that when the phone is given to a third party telecom operator, the vendor no longer retains the right to set its prices.

The commission said that not only did the Silicon Valley firm insist on setting the prices of the devices, but also insisted on approving the iPhone subsidies provided by the telecom companies. They were also adamant on approving the advertising content as well as the price differential of the new and old models of the iPhone. According to information gathered by analysts, as of last year’s fourth quarter, Apple Inc. had become the most popular smartphone member in Taiwan as it had about 32% market share. Exports related to Apple are a major driver of the Taiwanese economy.

Furthermore, several companies in Taiwan such as Taiwan Semiconductor Manufacturing Co Ltd, Pegatron Corp and Hon Hai Precision Industry Co Ltd provide assembly services for the iPhone maker devices and some of them also make components for it. This is an indicator that Taiwan cannot afford to get into a scuffle with the American giant because losing Apple’s support would be a huge loss for the consumers as well as the country’s economy. With Apple’s actions with Monster Inc., it has become quite clear that the tech firm doesn’t appreciate lawsuits from its partners.

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