FTC to probe iPhone pricing deals

FAIR TRADE QUESTION::The commission wants to determine if telecom firms are buying the phones outright from Apple or simply serving as distributors for it

By Camaron Kao and Shih Hsiu-chuan  /  Staff reporters

Thu, Apr 04, 2013 - Page 13

The Fair Trade Commission (FTC) said yesterday that it would investigate whether Apple Inc has violated the Fair Trade Act (公平交易法) by requiring all telecom companies to submit their proposed iPhone prices for approval.

The act stipulated that when a product is sold from one company to another, the one that buys the product has the right to decide how it wants to sell and price the product to consumers.

However, the commission still needs to investigate if telecom firms purchased iPhones from Apple or just serve as iPhone distributors, Wu said

If telecom firms are just consigned to sell iPhones for Apple and collect commissions for it, the practice does not violate the act, Wu said.

The maximum fine for violating the act with regard to setting prices is NT$25 million (US$837,650), he said.


Meanwhile, Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) demanded Apple treat Taiwanese customers more fairly.

His call came two days after the US company apologized to Chinese consumers in the wake of a barrage of criticism that it had discriminated against them by offering less favorable terms for product repair and after-sales services than in Western markets.

Chinese consumers can return their iPhone 4 or iPhone 4S within 15 days of purchase, so “why has Apple adopted a seven-day returns policy in Taiwan?” Lai said at a press conference attended by consumer ombudsmen and other officials at the National Communications Commission (NCC).

Discriminating against Taiwanese consumers deserved a protest, Lai said, adding that Apple should not give preferential treatment to Chinese customers.

Wu Cheng-hsueh (吳政學), deputy head of the Executive Yuan’s Consumer Protection Commission, said that, under the Consumer Protection Law (消費者保護法) and the Civil Code, consumers can claim their rights to redress for faulty goods within six months of purchase.

Wu said consumers could file complaints if cellphone retailers consider the damages to the goods were due to manmade factors and refuse to repair or replace the faulty goods.

National Communications Commission official Liang Wen-hsin (梁溫馨) said the agency would call a meeting with cellphone retailers and urge them to revise their repair or replacement policies for faulty goods.


In other developments, the FTC said companies involved in the Next Media (壹傳媒) buyout had on Tuesday filed to withdraw from the review process, which was now officially closed.

The buyers’ withdrawal came after the Hong Kong-based company said on Thursday last week the deadline for completing the deal had passed the previous day and it had received notice from the buyers that they would not extend the deal.

The media company announced in December last year that it would sell its Taiwanese print assets — the Chinese-language Apple Daily, Sharp Daily and Next Magazine — for NT$16 billion ($536 million), on the condition that the deal be completed by Wednesday last week.

Fair Trade Commission commissioner Wu Shiow-Ming (吳秀明) said yesterday if Next Media makes another attempt to sell its local assets, it would have to file an application for the FTC to review because of its large market share of the newspaper industry.

As for Next Media’s plan to sell its Next TV Broadcasting Ltd, FTC spokesman Sun Lih-chyun (孫立群) said it may not need to file a review application with his agency because the market share and revenue of Next TV are lower than the threshold for buyout review, but such a deal might need to be approved by the NCC.