Apple Fined In Taiwan For iPhone Price Fixing

Frankie70 writes "Taiwan's Fair Trade Commission has hit Apple with a small fine and warned the company that it may face a more substantial penalty if it doesn't stop interfering with carriers' iPhone pricing and the prices of the plans carriers sell alongside the iPhone. '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,' Taiwan's FTC said in a statement."

Comments

Nice

[lennier1]

Meddling in the deals between the carriers and the customers has been a tradition of theirs since the first iPhone. So it couldn't have happened to a more deserving corporation.

Too bad the fine itself is so laughably low that it's probably less than their yearly budget for toilet paper in their locations around the world.

Re:Nice

[Runaway1956]

At least SOMEONE is offering some resistance. Maybe just token resistance, but still better than none.

Re:Nice

[Virtucon]

Resistance to what exactly? I see this is as a token gesture because we all know that in most nations the MSRP really means "you won't sell this for less." The problem for electronics manufacturers is that with global markets you can have a lot of variability that makes it more feasible to buy in one nation for a lower price and sell it in another for a higher price. That's why we have Blu-Ray/DVD Region Codes and Cell phones that have regional lock-in.

Re:Nice

[zakkudo]

Companies have quoted various reasons for regioning and it changes depending on the audience they are talking to. For Nintendo, they say it is because of the ESRB and such being different between each country.

I like to play my games in Japanese. The only way I can get them is by importing them. BECAUSE ITEMS ARE REGIONED DOESN'T MEAN THEY ARE NECESSARILY THE SAME PRODUCT THEY WILL INTRINSICALLY HAVE A DIFFERENT WORTH. Even if it is only the language.

I'm honestly just waiting to lose my whole game collection one day thanks to a software update. People like me are viewed as the scum of the earth for not wanting the local english version of something.

Re:Nice

[MightyYar]

The iPhone doesn't have anything even approaching a monopoly. Just buy an Android unit. Or a Windows unit. I like Apple's stuff, but it's not $500 better, for my needs, than my cheap Android phone. I'm all for banning monopolistic practices, but pricing agreements for a popular but non-monopoly product in a very competitive market are not a problem.

Re:Nice

[Rosyna]

Price-fixing is artificially keeping a product's cost higher than the product is worth via collusion. Display manufacturers, various entertainment stores (Sam Goody), and memory makers have done this a lot in the past.

The opposite of price-fixing is negotiating a deal so carriers cannot charge a higher price on the iPhone than the iPhone's going rate in that region. Carriers want to carry the iPhone, but they also want to charge much more than the MSRP for the iPhone. Apple says, "You can't do both!"

Basically, the carriers in taiwan want to engage in price-fixing for the iPhone, but the agreement they willingly made with Apple prevents it.

Re:Nice

[Rockoon]

And exactly why shouldn't a company be allowed to decide how much its product should cost?

Because its wrong.

You are confusing what Apple sells its devices to resellers for, and what the resellers then sell the devices for.

Apple has every right to determine the first, but has no right to determine the second.

I'm sure that Apple doesnt want to accept the consequences of these resellers being agents of Apple, primary of which is complete liability with regards to the agents actions and behavior. Yet Apple wants them to be agents in every other respect. Thats not how it works, and is why we have anti-trust laws.

Re:Nice

[sribe]

Meddling in the deals between the carriers and the customers has been a tradition of theirs since the first iPhone.

True. But going back to the first iPhone: do you really think it was bad for Apple to push AT&T to provide unlimited data at a then-unheard-of rate?
Do you think it was a good thing that in later years either Apple quit pushing for that or AT&T won the argument, and that rate now gets us a piddly amount of data???

Re:Nice

[dk20]

Now compare this with most companies ability to outsource with ease as labour is cheaper elsewhere.

Region locks prevent consumers from benefiting from "Globalization" even though companies can exploit it at will. If i can get a legal DVD from China for around a dollar and it has an english soundtrack why shouldn't I be able to import these back? Isn't this the same mechanism outsourcing uses (jobs to where labour is cheap, but yet you cant reimport the cheap products back)?

Re:Nice

[0xdeadbeef]

And you could buy a Mac when Microsoft got sued.

It's funny to see the fanboys come full circle and become the same as their enemy. They're like the pigs in Animal Farm.

Re:Nice

[MightyYar]

An Apple is a brand of phone or a brand of computer. In no way does Apple have anything close to a monopoly in either of those markets. At one time, they almost cornered the MP3 player market, but history made that market irrelevant.

Re:Nice

[MightyYar]

Sure, that's my opinion. It's the old-school dealer model. You can make whatever contractual obligations you can negotiate with the dealer.

On the other hand, I recognize that corporations are just a convenient economic tool, and rules and regulation are pretty much arbitrary, or at least are open to a lot of debate. If the Taiwanese want that kind of marketplace, it is certainly within their rights to implement it.

Re:Nice

[mysidia]

They are allowed to decide how much their product costs. They can sell it to the carrier at whatever wholesale price they desire. They have no right to tell the carrier what to do with their property once they've purchased it though.

Apple can require you to adhere to their price list to be an authorized Apple reseller. Apple can also refuse to supply their product to retailers who are not authorized Apple resellers.

Plenty of manufacturers do this.

Did Ford or Honda have to approve how much you sold your car on Craigslist for?

No, but the vehicle you purchased was not subject to additional conditions on your right to sell or otherwise dispose of your product in the future.

The dealer didn't make you sign a "not for resale" or "resale only at price X" agreement.

"Nice", you say?

[bogaboga]

If I were Apple, it would be business as usual as the fine can be recouped in just 20 minutes of worldwide operations. In fact, I'd be laughing all the way to the bank as I'd simply ask our field offices to add a few cents to the cost of devices.

This is surely some joke or useless gimmick.

Re:"Nice", you say?

[LordLimecat]

Its funny till you start getting hit with fines for wilfully ignoring their instructions. I recall a similar incident where Microsoft decided to ignore an EU ruling, and got hit with fines in the neigborhood of ~$3million per day of continued infringement.

No details

[scotts13]

Note that the linked article didn't say Apple actually influenced the pricing up or down; just that they asked to review and approve the plans. I think there's a fair chance they were, as stated, trying to prevent gouging. I've worked for plenty of Apple authorized dealers; the profit margin (often less than 10%) on Apple hardware just isn't enough to allow discounts. The only real influence Apple can offer is co-op advertising. That is, you sell below a certain price and Apple doesn't reimburse you for promoting their products.

I suspect that advertising allowance (and it's influence) doesn't exist in Taiwan. So, they want to maintain some control, to avoid shady dealers (any of THOSE in Taiwan?) from sullying the brand.

If Taiwan carriers are like US and European ones

[russotto]

This reads like "Apple's price-fixing is interfering with carrier price-fixing". Cry me a frigging river.