Apple has lost a lawsuit in Taiwan against the country's anti-trust watchdog that had accused the iPhone maker of uncompetitive practices toward telecom firms and has slapped a fine on the US tech giant.
The court in Taiwan's capital Taipei ruled Wednesday that a fine of 20 million New Taiwan dollars ($647,124 or 575,884 euros) imposed by the country's Fair Trade Commission (FTC) was legal.
Taiwan's anti-trust regulator levied the fine because it had found the Cupertino-based gadget maker meddled with service providers' iPhone pricing plans after selling them distribution rights.
"Apple limited telecoms from setting contract price for its 4, 4S, 5 and 5S models, which is against the law," FTC spokesman Chiu Yung-ho told the news agency Reuters.
Email correspondence between Apple and the country's three largest telecom companies - Chunghwa Telecom, Taiwan Mobile, and Far EasTone Telecommunications - showed that Apple demanded to review the three companies' iPhone pricing plans in advance.
The commission found that Apple required the companies to adjust those plans, the subsidies they offered with iPhone contracts and the price difference between the iPhone 4S and the iPhone 5.
Reuters said Apple, Taiwan Mobile and Far EasTone declined comment on the ruling, while Chunghwa only said it respected the actions of the Fair Trade Commission, without elaborating.
Case of precedent
According to the FTC, the case was the first example of a jurisdiction fining the tech powerhouse for limiting the ability of its telecom partners to set their own prices.
It also noted that Apple violated Article 18 of the country's Fair Trade Act which asserts that third parties should be allowed to determine resale prices after purchasing goods from an enterprise.
"When the phone is transferred to a third party telecom, the vendor loses its right to set prices," Chiu told Reuters.
The commission also investigated HTC, Sony and Samsung, but determined they haven't reached similar agreements with Taiwan's telecom companies.
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.
Apple can still appeal the court's decision.
uhe/cjc (Reuters, AFP)