Apple Fined $9 Million Over Error 53 Backlash

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After an iOS update back in 2015, "Error 53" caused some Apple devices to freeze up. At least 275 Australian customers affected by the were told by Apple they couldn't get a refund if they used a third party to try and fix the problem. But that's not how Australian Consumer Law works.

Today, the Federal Court has ordered Apple to pay $9 million in penalties for "making false or misleading representations to customers" about their rights.

The advice from Apple to customers was given between February 2015 and February 2016 on the Apple US' website, by Apple Australia's staff in-store and on its customer service phone calls.

"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."

Court said the Court's declarations hold Apple US responsible for the conduct of its Australian subsidiary, that global companies must ensure their returns policies are compliant with the Australian Consumer Law, or they will face ACCC action.

After the ACCC notified Apple about its investigation, Apple implemented an outreach program to compensate individual consumers whose devices were made inoperable by error 53. This outreach program was extended to approximately 5,000 consumers.

Apple Australia has also offered a court enforceable undertaking to improve staff training, audit information about warranties and the ACL on its website, and improve its systems and procedures to ensure future compliance with the ACL.

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

"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.


Comments

    I'm glad the ACCC won this case, but I know what will happen. In 1 month people will forget it like they do all other ACCC successes and go back to saying the ACCC does nothing.

      It's such a miniscule penalty, even by non-Apple standards. Hardly seems like it'd serve as a disincentive for this kind of stuff in future.

        You know we work though (penalty points among other things). We never get huge monetary outcomes. I take from it though that is shows the ACCC will front up against a large player and they can win, that is the disincentive.
        A court case never looks good and it shows locally and internationally that you can take on foreign entities that operate in your locality with your own laws and don't have to kowtow to American laws and that their laws over-ride all others.
        I suppose I am essentially saying it's a moral victory

          I agree, and even for a huge company like Apple, 9 million dollars isn't something you enjoy paying.

          I agree it's a moral victory for the ACCC. It's just that companies make so much money off doing stuff like this that it feels like they could just shrug the $9M off as an operating expense, since they're still coming out ahead even with that.

            It's like the courts going to Apple: "You were caught going 210kph in a 50kph zone. Pay a dollar to the bailiff on your way out. Next case!"

            And lets be honest, it will probably have about the same impact on their operations here in Aus.

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