Competition

ACCC takes Apple to court over claims it “routinely refused” to service devices repaired by third parties

Dominic Powell /

The Australian Competition and Consumer Commission will take global technology giant Apple to court over allegations it made misleading representations about consumer guarantees.

The action is a result of an investigation by the ACCC into Apple’s “error 53”, which multiple users report having experienced on their iPhones and iPads after updating their operating system.

A number of users facing the error, which the ACCC claims disabled some users’ devices, had previously received repairs from third party repair businesses for things like repairing a cracked screen or faulty home button.

The ACCC alleges Apple “routinely refused” to service devices that had been repaired by a third party, despite the Australian Consumer Laws entitling the users to a range of consumer guarantees.

“In this situation, Apple has misleadingly said it doesn’t have to repair the phone if users have had third party repairs done,” commercial lawyer at TressCox Lawyers Alistair Little told SmartCompany this morning.

The ACCC outlines that receiving third party repairs cannot “extinguish” consumers’ rights to a remedy where “goods and services do not comply 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 on the case on Thursday.

“Denying a consumer their consumer guarantee rights simply because they had chosen a third party repairer not only impacts those consumers but can dissuade other customers from making informed choices about their repair options including where they may be offered at lower cost than the manufacturer.”

The consumer watchdog is seeking pecuniary penalties, injunctions, declarations, compliance program orders, corrective notices, and costs from Apple.

Consumers are entitled to repairs from your business, even if a third party has completed a repair: Lawyers

Little says the case involves the suggestion from the ACCC that by making the misleading representations, Apple may be participating in anti-competitive conduct by discouraging users from taking their products to third party repairers.

“This creates a situation where consumers think ‘we have to get repairs from Apple’,” he says.

Read more: Is Apple developing an iPhone-powered “dumb” laptop?

The legal action can be compared to a previous case against international video game company Valve, says Little, which the ACCC took to court in 2014 over its claims Australian users on its service were not entitled to refunds as the business was based in the US.

“It indicated users could not receive a refund, which is contrary to Australian Consumer Law. Even though the company had no Australian presence, the Federal Court decided it was still bound by the ACL,” Little says.

Little believes the ACCC’s case against Apple is “very likely” to go the same way and could find in favour of the watchdog on consumer protections.

As for businesses manufacturing or or selling repairable devices, Little says this is a timely reminder “you can’t exclude third party repairers”.

Commercial lawyer at LegalVision Ursula Hogben agrees, saying businesses should make sure they’re aware of their obligations.

“Consumers are entitled to repairs from your business, if your product is not of acceptable quality or not fit for purpose, even if other repairs were carried out by a third party,” Hogben says.

One exception is when the consumers’ product has been broken as a result of third party repairs, says Little.

“If the repairs have in some way damaged the equipment, you’re entitled to say you don’t have to repair it,” he says.

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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