Apple fined $9 million as Federal Court finds repairs policy breached Australian Consumer Law

The Federal Court of Australia has fined Apple $9 million after it ruled that the company’s repair policies breached the Australian Consumer Law (ACL).

The ruling comes despite an attempted settlement agreement between Apple and the Australian Competition and Consumer Commission.

Justice Michael Lee ruled that Apple engaged in misleading or deceptive conduct, or conduct that was likely to mislead or deceive, ruling that its refusal to provide free repairs to Apple devices previously serviced by a third party was in contravention of the ACL.

“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,” ACCC commissioner Sarah Court said in a statement.

“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."

Apple admitted in court it had represented to at least 275 Australian customers affected by the error that they were no longer eligible for a remedy if their device had been repaired by a third party.

These representations were made from February 2015 to February 2016 on Apple US’ website, by Apple Australia’s staff in-store and on its customer service phone calls.

“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.

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

The ACCC took Apple to court in April last year over claims that it refused to remedy a number of customers whose devices had the infamous “error 53”, which bricked a number of consumers’ iPads or iPhones after downloading an iOS update.

The error occurred when a difference was detected between data stored on the device and data on Apple's servers in relation to hardware components.

The ACCC alleged that the free service was refused even if the service done by the third-party repairer was unrelated to the fault.

Apple was also ordered to pay the ACCC’s legal costs in an amount to be determined by the court.