Just as Apple escaped a snowballing PR catastrophe in Australia over false “4G” iPad advertising (it settled with Australian watchdog for $2.25 million), the company is facing trouble in Italy, where antitrust authorities are threatening closure of Apple’s operations in the 60 million people market over misleading consumer with coverage advertising. The company has 30 days to make its case.
Cupertino was found guilty of selling its $99 a year AppleCare coverage even though a two-year warranty is mandated by the European Union. Furthermore, Apple’s warranty covers only its products, while EU consumer protection laws require sellers to provide coverage for both first- and third-party products.
What’s Apple gonna do in Italy?
Reuters has the story:
Apple Inc was threatened with the temporary closure of its operations in Italy and with further fines of up to 300,000 euros ($377,500) if it does not offer customers a free two-year warranty as demanded by Italian law.
The AGCM said in its monthly bulletin that Apple was continuing to adopt unfair commercial practices in Italy and noted this could eventually lead to the closure of its Italian operations for up to 30 days.
Italy’s consumer protection agency in March fined Apple a cool 900,000 euros (approximately $1.2 million) for failing to tell customers about their rights to free assistance.
Apple, of course, disagrees with Italy’s AppleCare antitrust complaint, saying in a statement emailed to the news gathering organization:
We have introduced a number of measures to address the Italian competition authority concerns and we disagree with their latest complaint.
I’m not really sure why the heck we even have to discuss this, but I’m worried that Apple’s been pushing its luck lately.
This is Apple Italy’s AppleCare Protection Plan for the iPhone. You be the judge.
True, Apple’s disclaimer in fine print on its Italian website states (machine translated) that “the advantages of the Year Limited Warranty from Apple and the AppleCare Protection Plan in addition to the rights of consumers under the legal guarantee of the seller”.
They also provide a link to a support document with more information and a detailed comparison chart that the Antitrust Authority claims is “misleading and deceitful”.
So, what the heck is going on here?
Consumer protection laws are consumer protection laws and companies are obliged to follow them or face legal consequences.
Does Apple think it is somehow above the European Union law?
How can it even think that AppleCare is superior to state-required warranty?
Statutory warranty requirements imposed by the European Union call for a two-year warranty on electronics so it blows my mind that it even crossed Apple’s mind they could get away for charging a hundred bucks for something that the law demands be provided free.
The AppleCare coverage for iPad. Notice fine print at the bottom.
Apple now has a messy situation on its hands. It’s not just a PR blow, the company’s antagonized EU’s consumer watchdogs, has and will be fined and at the end of the day be forced to play by the book.
Even worse, it could have avoided all this brouhaha simply by doing the right thing for the consumer.
I’m really sorry for these harsh words.
I’m pro-Apple, but can’t stand when big business takes advantage of the consumer.
Am I just getting worked up over mundane things?
How would you feel if Apple talked you into buying a warranty plan for hundred bucks without divulging that consumer protection laws entitle you to a two-year coverage as standard.
How would you feel about that, tell me down in the comments.