Home Technology Regulation Court hits Apple with $9m fine over consumer law violations

Court hits Apple with $9m fine over consumer law violations

Court hits Apple with $9m fine over consumer law violations Featured

Australia's Federal Court had ordered Apple to pay $9 million in penalties for making false and misleading statements to customers with faulty iPhones and iPads, about their rights under Australian Consumer Law.

The action was brought against Apple US and Apple Australia by the Australian Competition and Consumer Commission which investigated complaints over "error 53" – a message that appeared on some iPads and iPhones which became unusable after an iOS update.

In a statement, the ACCC said Apple US had admitted telling at least 275 Australian customers who encountered this error between February 2015 and February 2016 that they could not obtain any help from the company if their devices had been repaired by a third party.

This message was conveyed to the customers via the Apple US website, by Apple Australia staff in-store and also on the phone when customer service was called.

“If a product is faulty, customers are legally entitled to a repair or a replacement under the Australian Consumer Law, and sometimes even a refund. Apple’s representations led customers to believe they’d be denied a remedy for their faulty device because they used a third party repairer,” ACCC commissioner Sarah Court said.

“The Court declared the mere fact that an iPhone or iPad had been repaired by someone other than Apple did not, and could not, result in the consumer guarantees ceasing to apply, or the consumer’s right to a remedy being extinguished.

“The Court’s declarations hold Apple US, a multinational parent company, responsible for the conduct of its Australian subsidiary. Global companies must ensure their returns policies are compliant with the Australian Consumer Law, or they will face ACCC action."

The ACCC said after Apple was told about the investigation, the company had instituted an outreach program to offer remedies to about 5000 affected customers.

In addition, Apple Australia undertook to train its staff about Australian Consumer Law, provide information about warranties and the ACL on its website, and ensure its systems and procedures were compliant.

Also addressed was the alleged provision of refurbished devices as replacements by Apple; the company said it would provide new replacements if they are requested.

“If people buy an iPhone or iPad from Apple and it suffers a major failure, they are entitled to a refund. If customers would prefer a replacement, they are entitled to a new device as opposed to refurbished, if one is available,” Court said.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

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