Apple to pay AU$9m for misleading iPhone and iPad consumers

Australia's Federal Court has hit Apple with a $9 million fine over claims it mislead local shoppers returning faulty iPhones and iPads.

As ACCC Commissioner Sarah Court explained, you can't tell Australians that "because you've had this third party fix, you are not entitled to any remedy".

Via its U.S. website, customer service calls, and Apple Australia in-store staffers, the tech giant had then told at least 275 customers between February 2015 and February 2016 that they were ineligible to remedies if their phone or tablet had been repaired by a third-party store.

The court also held the Apple parent company, Apple US, responsible for the conduct of its Australian subsidiary.

ACCC Commissioner Sarah Court said this was a direct violation of consumer rights in Australia.

The problems occurred after Apple released its iOS 9.2.1 mobile operating system, which contained a factory test meant to verify the Touch ID fingerprint authentication scanner on a device was genuine. She added users should be free to have their screens replaced and other repairs done by third-party companies, so long as the procedure "doesn't damage the underlying system of the phone".

But having a third-party repairman install unauthorized Touch ID components resulted in "error 53" messages popping up on affected iPhone and iPad models once iOS 9 was installed.

The users were told by Apple that they were not eligible for a remedy if the iPhone or iPad had been repaired by another company.

The ACCC further notes that a concern addressed by the undertaking is that Apple was allegedly providing refurbished goods as replacements, after supplying a good which suffered a major failure - saying Apple has committed to provide new replacements in those circumstances if the consumer requests one.

"We're constantly looking for ways to enhance the service we deliver and we had very productive conversations with the ACCC about this".

The Australian Competition and Consumer Commission said on Tuesday that following an investigation of complaints relating to "error 53" on the devices, the Federal Court had issued the penalty.

Apple has already reached out to compensate around 5,000 customers, also offering a court-enforceable undertaking to train staff on how to deal with warranty matters and ACL compliance, as well as updating the policies on its website.


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