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 now 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.

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