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Apple Fined In Taiwan For iPhone Price Fixing 74

Posted by timothy
from the maximizing-returns dept.
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."
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Apple Fined In Taiwan For iPhone Price Fixing

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  • Nice (Score:5, Interesting)

    by lennier1 (264730) on Thursday December 26, 2013 @10:37AM (#45787545)

    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.

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

      • "Nice", you say? (Score:4, Interesting)

        by bogaboga (793279) on Thursday December 26, 2013 @10:53AM (#45787621)

        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 (Score:5, Insightful)

        by Virtucon (127420) on Thursday December 26, 2013 @11:02AM (#45787647)

        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.

        • Cell phones have lock-in so you pay roaming and other stuff like 2+ year deals also the carriers in past even wanted you to only buy from there store and there ringtone / game / app store.

          • by noh8rz10 (2716597)

            Probably what will happen is apple will buy all of the Taiwanese cell providers, then set prices as they like.

          • by richlv (778496)

            this is wrong (besides the crap grammar) - multi-year contracts are just that - contracts. there is no need to force lockin because of that. anything else is anti-competitive practice

        • by zakkudo (2638939)

          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 colle

        • " That's why we have Blu-Ray/DVD Region Codes and Cell phones that have regional lock-in."

          You say that as if regional lock-in is a good thing.

          Torrents don't have that nonsense.

          Please explain how region codes benefit the consumer. Then explain how those cellphones differing technologies benefit the consumer. I see zero benefit for me. All the benefits accrue to the distributors, just as all benefits from DRM accrue to the distributors.

          It's all hog shit.

          • by Virtucon (127420)

            They're of no benefit to consumers in terms of price. There are reasons for having them like language preferences etc. and torrents are a delivery mechanism that avoids these things. My point is that more often than not these types of things are to ensure market prices are higher, not lower in given markets where the producer can get more for their wares.

            • I'm not saying I love region locking, but counterintuitively, it's overly hasty to say there's no benefit to consumers in terms of price.

              Things that are region-locked tend to be things with high fixed one-time costs and very low replication costs. That means to be profitable, you must earn an essentially-fixed amount of money.

              So imagine a $1 million one-time cost item with $0 replication cost, for the sake of argument. If you could region-lock, you may be able to sell 900K of them at $1 apiece in PovertyL

              • Re:Nice (Score:4, Insightful)

                by dk20 (914954) on Thursday December 26, 2013 @01:51PM (#45788699)
                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)?
          • Please explain how region codes benefit the consumer.

            The benefit to the consumer is that the adaptation of a work is allowed to be made at all.

            Say a company has a decades-long contract, which predates home broadband, from the owner of copyright in a book to sublicense the book's movie rights in one particular region. Now a movie studio wants to make a movie based on the book. The sublicensor is willing to license the movie rights only on the condition that the movie not be screened or sold on home video outside the region for which the sublicensor is allow

            • I have zero respect for any such arrangement. I have equal respect for life + anything copyright terms. And, ultimately, I have zero respect for copyright law, because such absurd arrangements are upheld by corrupt legislators and judges.

              • So how should one go about convincing 51 percent of eligible voters in your country 1. to have the same zero respect, and 2. to elevate this zero respect above abortion rights or other major single issues keeping the major parties in power?
                • If I had the answer to that question, I would be in politics. The public is pretty apathetic regarding digital rights, freedom of the press, or any number of issues that we might take seriously.

    • Aren't you assuming that Apple was keeping prices high? What if Apple didn't want them too high? Without knowing any more, we can only speculate. My assumption based on previous Apple history is that Apple wanted uniform pricing so that consumers were not presented with too many pricing options.
    • Re: (Score:2, Insightful)

      by myspys (204685)

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

      It's not like Apple has a monopoly.

      • Re:Nice (Score:5, Informative)

        by Rockoon (1252108) on Thursday December 26, 2013 @11:22AM (#45787763)

        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.

        • 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.

          Depends on how it's being sold.

          Way back in the days of CompUSA, I remember that Apple "owned" all of the machines that CompUSA sold and CompUSA basically got a commission for each Apple machine sold. But since they were Apple's machines, Apple set the prices and not CompUSA. So when Apple released a new machine, you would occasionally come in and find the new machine and the machine it replaced to be the same price because Apple hadn't set a clearance price for the older machines. This is somewhat akin t

    • Re:Nice (Score:5, Insightful)

      by MightyYar (622222) on Thursday December 26, 2013 @11:19AM (#45787741)

      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.

      • by lennier1 (264730)

        So, an attempt to interfere in the carrier's pricing is alright, because the manufacturer only has a twenty or so percent market share?

        • by MightyYar (622222)

          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.

      • by tepples (727027)

        The iPhone doesn't have anything even approaching a monopoly. Just buy an Android unit. Or a Windows unit.

        Neither the Android unit nor the Windows unit will work with preexisting purchases. The only DRM-free thing on the iTunes Store is music, and when Android first came out, even music was still DRM.

        I like Apple's stuff, but it's not $500 better, for my needs, than my cheap Android phone.

        Then you happen not to be among the people who have bought at least $500 worth of books, movies, and apps from Apple.

        • by MightyYar (622222)

          Then you happen not to be among the people who have bought at least $500 worth of books, movies, and apps from Apple.

          That is certainly true. I make sure any content than I purchase is platform-agnostic (or just a streaming service like Netflix). If it isn't platform agnostic, I make sure I can crack the encryption (ebooks, I'm looking at you...). If I can't crack the encryption, I pirate it. I do have a number of App purchases on both i-Things and Android tablets/phones... but I also have a bunch of Windows and Mac apps. Maybe I'm just of a certain age, but I expect to pay for software every few years anyway on the upgrad

      • by 0xdeadbeef (28836)

        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.

        • That's actually some entertaining trivia.

          Microsoft tried to say that Apple was a competitor and, of course, used various statistics that showed how high Apple's market share was in certain markets (e.g., education, graphic arts). The court, though, decided that Apple was not a competitor because Apple did not use Intel chips and the government was saying that Microsoft had a monopoly on operating systems sold for personal computers running Intel x86 CPUs. Thus, Apple was not a competitor to Microsoft.

          Agai

        • by MightyYar (622222)

          It's true you could buy a Mac. It's also true you could run Linux. But realistically, you could not do without MS's products. I've had Macs since the early 90s, and it has always been necessary to either own a cheap x86 machine or run a DOS/Windows emulator. I'm sure someone on Slashdot can claim to swear off MS's stuff 100%, but I've always had to interact with other people using MS Office. Even today, I haven't been able to shed Office or Windows (though Windows is less important now, thanks to smartphone

      • by bloodhawk (813939)
        You don't need to have a monopoly for price fixing to be illegal. they could be a 1% market share and it would still be illegal. They have no right to interfere with the carriers pricing except to dictate the price that they sell to the carrier at and even that has to be on fair and equitable terms.
        • by MightyYar (622222)

          In the US, this would not be true. They cannot collude with other device makers to fix prices, but they most certainly can set the price of their own product.

          Taiwan is free, of course, to steer their own course.

    • Re: (Score:3, Insightful)

      by Rosyna (80334)

      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!"

      Basical

      • 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.

        Price fixing is trying to dictate the price of a good or service at any point of resale. It doesn't matter if the intent is to keep the price up or down, it is still price fixing.

        Carriers want to carry the iPhone, but they also want to charge much more than the MSRP for the iPhone

        Where did you get this? The article doesn't mention anything close to this an

        • by Rosyna (80334)

          Where did you get this? The article doesn't mention anything close to this and traditionally Apple has fought to prevent the product from being sold under certain prices because they don't want their products to appear "cheap".

          From the carriers that complain they can't make as much profit on an iPhone as they do on other phones? The carriers want to increase the price of the iPhones to consumers to increase their profit margins.

          • by Rockoon (1252108)

            From the carriers that complain they can't make as much profit on an iPhone as they do on other phones?

            Did you miss the part where Apple isnt keeping the prices artificially low, but instead is keeping the prices artificially high?

            Yes, you did miss that part.

            • by Rosyna (80334)

              Did you miss the part where Apple isnt keeping the prices artificially low, but instead is keeping the prices artificially high?

              Where was that part?

      • The Carriers are a monopoly power, they compete as little as possible because they know they are the only choice. Being all in the stock market, they have like minded institutional share holders who probably invest in the group of them - which makes them even more unlikely to truly complete; while the short term investors do push them to compete the net result is they will do nothing to lower prices but will compete with approximately the same levels of infrastructure investment (as little as possible.)

        Pric

    • by sribe (304414)

      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???

      • by puto (533470)
        As someone who works for the company you mentioned. Our unlimited data plans for Smart Phones were originally $20 dollars before the Iphone. Apple pushed us to raise the price of unlimited data so it could be a premium service for a premium product. And I imagine that extra 10 dollars went to Apple for some years.
  • every small shop and large carrier everywhere has to charge the same price for Apple products like the iPhone. That's why most don't bother selling them. When my company just recently reviewed which phone model to get, they were flexible on every phone pricing and had credits etc except iPhones. So Apple priced themselves right out of the market. One of our Apple fanboy employees still looked into them but even they couldn't justify that idiotic of an expense for a fragile phone model.
  • No details (Score:4, Interesting)

    by scotts13 (1371443) on Thursday December 26, 2013 @11:54AM (#45787913)

    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.

    • by puto (533470)
      Shady dealers such as those little kiosks in malls, Walmarts, Radio Shacks, and Best Buys, all sell Iphones. I spend most of my day calming down customers whose accounts were screwed up because of all of those places. Also to the OP, Walmart, Best Buy, all offer deep discounts on the Iphone. They were selling the 5s for 125 over the holidays...
  • by russotto (537200) on Thursday December 26, 2013 @11:57AM (#45787925) Journal

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

  • It should be outright illegal for any company to supply goods to a downstream company and then tell that company what price they are going to charge to consumers.

    Apple should have NO right to set prices, it should be up to phone carriers and to retailers what price is charged for iDevices. If I am a retailer and want to sell iPads for $50 (maybe as a loss leader to get people into the store), I should be allowed to do that with Apple being prohibited from penalizing me from doing so.

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