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Thursday, April 06, 2017
Australian Regulator ACCC Takes Action Against Apple Over Alleged Misleading Guarantee Representations


The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Apple alleging that Apple made "false, misleading, or deceptive representations" about consumers' rights under the Australian Consumer Law.

The ACCC commenced an investigation following reports relating to 'error 53' - an error which disabled some consumers' iPads or iPhones after downloading an update to Apple's iOS operating system. Many consumers who experienced error 53 had previously had their Apple device repaired by a third party; usually replacing a cracked screen.

The ACCC investigation revealed that Apple appears to have routinely refused to look at or service consumers' defective devices if a consumer had previously had the device repaired by a third party repairer, even where that repair was unrelated to the fault.

Under the Australian Consumer Law, there are a number of "consumer guarantees" regarding the quality, suitability for purpose and other characteristics of goods and services, and consumers are entitled to certain remedies at no cost where goods and services do not comply with the consumer guarantees.

The ACCC alleges Apple represented to consumers with faulty products that they were not entitled to a free remedy if their Apple device had previously been repaired by third party, "unauthorised repairers". However, having a component of the Apple device serviced, repaired, or replaced by someone other than Apple cannot, by itself, extinguish the consumer's right to a remedy for non-compliance with the consumer guarantees.

"Consumer guarantee rights under the Australian Consumer Law exist independently of any manufacturer's warranty and are not extinguished simply because a consumer has goods repaired by a third party," ACCC Chairman Rod Sims said in a statement.

The ACCC is seeking pecuniary penalties, injunctions, declarations, compliance program orders, corrective notices, and costs.

The lawsuit was filed late on Wednesday, a week after the consumer watchdog granted Apple a win by denying Australia's banks the right to introduce a mobile payment system to rival its Apple Wallet.



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