
Apple fined for price fixing - bane
http://mobile.itnews.com.au/Article.aspx?CIID=368523&type=News
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laureny
First there's that and then there is the eBook price fixing, and who else
knows what we haven't found out about how Apple conducts business.

I, for one, am thankful that Android rose to keep Apple in check, because a
world where Apple would be a monopoly frightens me about as much, if not more,
that when it was Microsoft pulling the same kind of dirty and illegal tricks.

~~~
r0h1n
Given Google's staggeringly broad, global and interconnected reach (Android,
Gmail, search, advertising etc.), I'm not sure if they're exactly the
alternative worth rooting for. And they've been found indulging in as many, if
not more, monopolistic or questionable business practices as Apple.

~~~
_delirium
I'm also worried about their increasing move towards taking Android at least
partially back proprietary. The original idea seemed to be an open-source
platform, which is a nice way of spurring innovation. But they've slowly been
replacing components with proprietary Google versions, which is making the
core open-source OS less and less maintained. My guess is that the goal is to
make it more like a Darwin/OSX situation, where the core OS is open source but
lacks all the interface elements and is not really usable as-is by
competitors. What would motivate that? One guess is that they're more worried
nowadays about Kindle-type competitors than they used to be, devices that
build on Android but hook into an alternative (non-Google) cloud ecosystem.

Some examples: Messenger seems to be in the process of being phased out in
favor of Google Hangouts; Gallery and Photos duplicate functionality to such
an extent that I suspect one of them will not last; even the main _keyboard_
is no longer open source, as Google has more or less abandoned the default
Android keyboard and is rolling all improvements into the default-on-Google-
devices Google Keyboard app.

~~~
w1ntermute
> What would motivate that?

The OEMs and carriers delaying updates. By moving as much code as possible out
of the core OS and into apps that they can update via the Play Store, they
managed to make an end run around the OEMs/carriers. Notice how no one is
really complaining about not having KitKat - the majority of the important
updates are available on all Android 4.x devices, since they're in the Play
Store.

~~~
throwaway2048
So what? why cant these componets be open source?

If Google really cared, they could split them out into a separte service and
still require them for official Android licensing.

I think this notion that they have to be closed source is a very strange
redherring that people have bought for some reason.

~~~
valarauca1
Its not that people 'bought' anything. Its just the general population doesn't
care. They just want something that works.

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orbitur
Honest question. Can someone explain to me what's wrong with this sort of
"price fixing"?

The contract is attached to the iPhone, and Apple doesn't want the contract
sold for less than $X. If the carrier doesn't want to do that, they can choose
not to sell the phone. What's the issue?

~~~
stephen_g
I agree - I was under the impression that you could have a clause in a
contract with a retailer/distributor restricting the price they could charge
for _your_ product - I thought it was generally only illegal if you're
conspiring with competitors to change prices across the market.

~~~
josephlord
Certainly not in the EU. If you sell it yourself you can charge what you like
and there may be agency models where you pay distributors to deliver to
retailers at agreed prices but I think in those cases you probably have to own
the stock until sold. If you sell to a distributor they can sell a whatever
price they like.

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leephillips
In the living memory of many of us, Taiwan was essentially a dictatorship. Now
its protection of free markets for its people exceeds that of the U.S., at
least in some areas, where U.S. law tends to favor corporate interests.

~~~
CaveTech
A dictatorship doesn't necessitate evil or corruption.

~~~
Dylan16807
>A dictatorship doesn't necessitate evil or corruption.

Still, a dictatorship implies central control, and there is quite a contrast
between that and strong market-favoring.

Edit: missed a word that changes tone a bit

~~~
dublinben
>a dictatorship implies central control, and there is quite a contrast between
that and strong market-favoring

Not in Asia. Singapore is consistently ranked as one of the most economically
free (pro-business and free market) countries in the world, yet they are
essentially a one-party 'democracy.'

Hong Kong is another example of an entity consistently ranked as one of the
most economically free, but less democratic.

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salient
This is starting to become sort of trend with Apple.

~~~
threeseed
In what way ? Way too many people seemed to have rewritten the last 10 years
of Apple's history.

They have done a ridiculous amount of dodgy, illegal and anti-user things
before, during and after Job's reign. They aren't perfect nor should any sane
person expect 100K+ people to be. Just like Google, Microsoft, IBM etc.

~~~
Moocat87
No one should expect perfection, but I think most would expect any company
with the means to follow the laws of every country they operate in, because
that's their obligation. If they can't follow the law, they shouldn't be given
a <$1M wrist-slap, they should be _corrected._

What about the Taiwanese businesses that are disadvantaged by this type of
practice? Surely that's worth far more than $1M.

~~~
icebraining
What about the Taiwanese businesses that benefit from this type of practice,
by having less competition when selling their cheaper phones? I'm sure Acer,
Asus and HTC aren't complaining that iPads aren't cheaper.

~~~
Moocat87
This is about contract price-fixing, not price-fixing of apple products.

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smackfu
Apple's usual strategy to "fix" prices is to not give retailers any room to
work with. If they can't buy an iPad for much less than $499, they can't put
it on much of a sale. Why sell it at all if the margins are so bad?
Accessories and warranties!

This strategy doesn't work very well with iPhones, since there is a lot of
excess carrier profit in the 24-month subsidies, above the $700 or so cost of
the iPhone.

~~~
JohnTHaller
There's not as much profit as you'd think. And a lot less than lower priced
phones from other manufacturers. Plus, the carriers have to assume a ton of
risk by agreeing to buy millions of iPhones whether they sell or not. Verizon
had an estimated shorfall of $12-14 billion dollars as of July of iPhones
they'd have to buy even though they didn't have the sales to warrant it. Not
sure how that would up.

~~~
huxley
That shortfall was predicted by one analyst and it never occurred:

[http://www.mondaynote.com/2013/12/15/shameless-
carriers/](http://www.mondaynote.com/2013/12/15/shameless-carriers/)

[http://www.verizon.com/investor/secfiling.htm](http://www.verizon.com/investor/secfiling.htm)

~~~
JohnTHaller
Ah, thanks. Wasn't aware of that.

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Touche
IANAL and have always wondered why this practice is allowed in the U.S.

~~~
pinaceae
you mean a hardware vendor like Apple not allowing mobile carriers to set any
price for its own handsets? why exactly is this bad?

~~~
vidarh
Because it drastically limits competition that would otherwise put a downwards
pressure on the price of these devices.

~~~
thedrbrian
Surely android phones put downward pressure on these devices?

~~~
cbhl
The idea is that putting a lower price floor on iOS devices differentiates
them as a premium product, so that lay people aren't inclined to think that an
Android Phone with a lower price is "as good as" an iPhone.

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jusben1369
I wonder if they meant to fine them the number of the beast as a way of
sending a strong message.

~~~
pliu
If they wanted to send a message like that they would have fined them $444
000.

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darrenkopp
Sweet, Apple will make that amount of money in ~146 seconds. That will
certainly show them.

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brandonbloom
This fine is surely smaller than the ill-gotten gains. If the court is ruling
that Apple was behaving with nefarious intent, shouldn't there be meaningful
punitive damages?

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eatfish
Is this for good or bad in the Taiwanese market? I can't imagine carriers in
the UK trying to lower prices or give a better deal without persuasion from
outside.

When the first iPhones were introduced it had the first affordable data plan
I'd ever seen in the UK. I think o2 we're asking around £50/month for some
tiny data plan on my Nokia N95, on top of the contract cost(there was no data
bundles). The iPhone was £35 month on contract, phone and unlimited data.

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bitemix
$666k is a rounding error for Apple.

