Apple Fined as Customers Win a Right-to-Repair Fight
June 19 2018 - 5:45AM
Dow Jones News
By Mike Cherney
SYDNEY-- Apple Inc. was fined in Australia for refusing to offer
free fixes for iPhones and iPads that were previously serviced by
non-Apple stores, the latest episode in a global dispute between
companies and consumers about the right to repair.
A court ordered Apple to pay a penalty of 9 million Australian
dollars ($6.7 million), after it told consumers it wouldn't offer
free repairs for devices that had become inoperable due to a glitch
known as "Error 53." The fault had occurred after consumers
downloaded an update to Apple's operating system.
Apple told at least 275 Australian customers affected by Error
53 that they weren't entitled to a remedy because their devices had
been previously serviced at non-Apple stores, effectively voiding
guarantees. The customers were told this between February 2015 and
February 2016 and the information was provided on Apple's website,
by Apple's Australia in-store staff and on customer-service phone
calls.
Under Australian law, customers are entitled to a repair or
replacement, and sometimes a refund, if a product is faulty,
according to the Australian Competition and Consumer Commission,
which sued Apple. Some Apple customers saw Error 53 as part of a
general effort to prevent users from going to non-Apple stores for
repairs.
Commissioner Sarah Court said Tuesday the Federal Court of
Australia ruled Apple couldn't cease consumer guarantees because an
iPhone or iPad had been repaired by someone other than Apple. Apple
didn't immediately respond to a request for comment.
Conflict about where consumers can get their products repaired
has intensified in recent years as consumer devices get
increasingly complex.
In the U.S., the Repair Association has lobbied for state laws
to require manufacturers to share information that independent
repair shops need to fix their products. Others, though, have
raised concerns unauthorized repairs could jeopardize the security
of data held on the devices.
Apple previously said Error 53 can happen after "an unauthorized
or faulty screen replacement" and was needed to protect customers
if a fraudulent fingerprint sensor was used. It later said it was a
mistake and designed to be a factory test. Apple apologized and
posted instructions on its website for consumers to fix the
problem.
After Apple was notified of the Australian regulator's
investigation, the company reached out to some 5,000 customers who
were affected by Error 53 to compensate them, the regulator
said.
Apple also agreed to improve staff training, as well as beef up
its internal systems and procedures to make sure it is complying
with Australian consumer laws, the regulator said. Under that
agreement, Apple also committed to providing new replacement
devices, not just refurbished ones, if a product is faulty.
Consumers are likely to be the major beneficiaries from the
court ruling because third-party repairers typically charge lower
prices, said James Thomson, senior industry analyst at IBISWorld.
Apple and other major companies may have to reduce repair costs to
retain business, he said.
"While the financial penalties are relatively insignificant to a
company of Apple's size, the publicity surrounding the
misrepresentations are likely to have a greater influence on the
company and wider industry," he said.
Write to Mike Cherney at mike.cherney@wsj.com
(END) Dow Jones Newswires
June 19, 2018 05:30 ET (09:30 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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