The court battle originally began in December 2013, when the Taiwan FTC first levied the fine against the Silicon Valley company over concerns regarding its iPhone pricing and carriers. More specifically, the agency believes Apple broke the law by forcing Taiwanese carriers to adhere to Apple-imposed contract pricing for the iPhone 4, iPhone 4S, iPhone 5, and iPhone 5S. In addition, Apple also determined subsidies, as well as the price differences between different iPhone models.
“Apple limited telecoms from setting contract price for its 4, 4S, 5, and 5S models, which is against the law,” said commission spokesperson Chiu Yung-ho.
Even though it’s normal for Apple to force U.S. carriers to get its approval for the prices at which carriers sell iPhones, the problem here is that Taiwanese carriers get to dictate pricing, since they own the smartphones they sell to their subscribers. As such, the Taiwan FTC had enough cause to pursue a case against Apple.
“When the phone is transferred to a third-party telecom, the vendor loses its right to set prices,” said Yung-ho.
Interestingly, Apple didn’t set the pricing for the iPhone 6 and iPhone 6 Plus in the country, since those iPhones launched after the Taiwanese FTC investigation began. Regardless, Apple can appeal the decision. If the company fails to win the appeal, however, then the $647,000 fine is final, and Apple will be forced to pay.
In hindsight, the fine itself is unlikely to affect Apple in any significant way. However, the case could set a precedent for regions with similar laws. It remains to be seen whether other countries will follow in Taiwan’s footsteps and take away Apple’s ability to dictate iPhone pricing.
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