Apple loses Taiwan anti-competitive practices court case

Chunghwa Telecom Co

17/06/2015 10:15

By Michael Gold 
    TAIPEI, June 17 (Reuters) - Apple Inc  AAPL.O  has lost a 
lawsuit in which it was accused of engaging in anti-competitive 
practices and will be fined T$20 million ($647,124), a Taiwan 
court said on Wednesday. 
    The island's Fair Trade Commission had previously levied the 
fine against the Silicon Valley firm for requiring its major 
Taiwan telecom partners to receive approval for pricing plans 
for its wildly popular iPhone series in advance of public 
release, in violation of Taiwanese law. 
    Apple subsequently countersued and lost the suit. 
    "Apple limited telecoms from setting contract price for its 
4, 4S, 5 and 5S models, which is against the law," commission 
spokesman Chiu Yung-ho told Reuters. The court noted that Apple 
can still appeal. 
    When contacted by Reuters, Apple declined to comment on the 
matter. 
    Its iPhones are usually bundled with contracts via one of 
Taiwan's three major telecom companies, Chunghwa Telecom Co Ltd 
 2412.TW , Taiwan Mobile Co Ltd  3045.TW  and Far EasTone 
Telecommunications Co Ltd  4904.TW . 
    Taiwan Mobile and Far EasTone also declined comment. 
Chunghwa only said it respects the actions of the Fair Trade 
Commission, without elaborating. 
    The case was the first example of a jurisdiction fining the 
tech powerhouse for limiting the ability of its telecom partners 
to set its own prices, according to the commission. 
    Telecom companies in Taiwan own the rights to the phones 
they sell and can set prices however they see fit, the 
commission said. 
    "When the phone is transferred to a third party telecom, the 
vendor loses its right to set prices," said Chiu of the 
commission. 
    In addition to contract prices, Apple also insisted upon 
approving the telecoms' iPhone subsidies, price differentials 
between old and new phone models and advertising content, the 
commission said. 
    Apple was Taiwan's most popular smartphone vendor as of the 
fourth quarter last year, with a 32 percent market share, 
according to analysts International Data Corp. 
    Many Taiwan companies, including Hon Hai Precision Industry 
Co Ltd  2317.TW , Pegatron Corp  4938.TW  and Taiwan 
Semiconductor Manufacturing Co Ltd  2330.TW , make components or 
provide assembly services for Apple gadgets, and Apple-related 
exports are a major driver of Taiwan's economy. 
    ($1 = 30.9060 Taiwan dollars) 
 
 (Editing by Jacqueline Wong) 
 ((michael.gold@thomsonreuters.com; +886225004899; Reuters 
Messaging: michael.gold.thomsonreuters.com@reuters.net)) 
 
Keywords: TAIWAN APPLE/