Apple loses anti-competitive practices court case

iPhone. (Ryan Emberley, Invision for Apple, AP, file)
iPhone. (Ryan Emberley, Invision for Apple, AP, file)

Taipei - Apple has lost a lawsuit in which it was accused of engaging in anti-competitive practices and will be fined T$20m ($647 124), a Taiwan court said on Wednesday.

The island's Fair Trade Commission had previously levied the fine against the Silicon Valley firm for requiring its major Taiwan telecom partners to receive approval for pricing plans for its wildly popular iPhone series in advance of public release, in violation of Taiwanese law.

Apple subsequently countersued and lost the suit.

"Apple limited telecoms from setting contract price for its 4, 4S, 5 and 5S models, which is against the law," commission spokesperson Chiu Yung-ho said. The court noted that Apple can still appeal.

When contacted by Reuters, Apple declined to comment on the matter.

Its iPhones are usually bundled with contracts via one of Taiwan's three major telecom companies, Chunghwa Telecom, Taiwan Mobile and Far EasTone Telecommunications.

Apple tactics

Taiwan Mobile and Far EasTone also declined comment. Chunghwa only said it respects the actions of the Fair Trade Commission, without elaborating.

The case was the first example of a jurisdiction fining the tech powerhouse for limiting the ability of its telecom partners to set its own prices, according to the commission.

Telecom companies in Taiwan own the rights to the phones they sell and can set prices however they see fit, the commission said.

"When the phone is transferred to a third party telecom, the vendor loses its right to set prices," said Chiu of the commission.

In addition to contract prices, Apple also insisted upon approving the telecoms' iPhone subsidies, price differentials between old and new phone models and advertising content, the commission said.

Apple was Taiwan's most popular smartphone vendor as of the fourth quarter of 2014, with a 32% market share, according to analysts International Data Corporation.

Many Taiwan companies, including Hon Hai Precision Industry, Pegatron and Taiwan Semiconductor Manufacturing, make components or provide assembly services for Apple gadgets, and Apple-related exports are a major driver of Taiwan's economy.

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