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