NT$20-mil­lion fine given to Ap­ple Asia up­held by court

The China Post - - LOCAL -

The Taipei High Ad­min­is­tra­tive Court up­held a de­ci­sion by the R.O.C. Fair Trade Com­mis­sion (FTC) to im­pose a fine of NT$20 mil­lion ( US$694,324) on Ap­ple Asia Ltd., the lo­cal sub­sidiary of U.S.-based Ap­ple Inc., for in­clud­ing re­stric­tive prac­tices in its cell phone dis­trib­u­tor con­tracts with lo­cal telecom­mu­ni­ca­tions com­pa­nies.

Cit­ing a vi­o­la­tion of Ar­ti­cle 18 of the Fair Trade Act, the FTC on Dec. 25, 2013 fined Ap­ple Asia NT$20 mil­lion for re­strict­ing the free­dom to de­ter­mine pric­ing and cost struc­ture among its three main dis­trib­u­tors in Tai­wan, namely Chunghwa Tele­com Co. Ltd., Tai­wan Mo­bile Co. Ltd., and Far EasTone Telecom­mu­ni­ca­tions Co. Ltd.

The FTC said it was the first time that Ap­ple was fined for its prac­tices. At the time, the com­pany was un­der in­ves­ti­ga­tion by the Euro­pean Union for pos­si­ble vi­o­la­tion of the EU fair com­pe­ti­tion law.

Ap­ple sub­mit­ted the case to the Taipei High Ad­min­is­tra­tive Court, claim­ing that the three telecom­mu­ni­ca­tions com­pa­nies were us­ing free iPhone hand­sets as sales pro­mo­tion items.

Since the hand­sets were of­fered free of charge to cus­tomers and were not be­ing resold to a third party, Ap­ple Asia said, it had not vi­o­lated Ar­ti­cle 18, which stip­u­lates that en­ter­prises sup­ply­ing prod­ucts to a trad­ing coun­ter­part for re­sale to a third party must al­low the coun­ter­part to set its re­sale prices freely.

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