Amicus Curiae: ACCC vs Apple - Can Australia Take Down a Tech Giant, and Will We Care?

By Isaac Chen

The Australian Competition and Consumer Commission (ACCC) has recently said that they will be taking technology giant Apple to court. They allege that Apple is in breach of Australian Consumer Law because the tech giant is refusing to repair devices that have been previously touched by third-party repairers. To this end, the ACCC alleges that false, misleading and deceptive representations have been made.This particular situation arose after an investigation into reports of ‘Error 53’ - an error that disabled some iPhones and iPads after an iOS update has been downloaded, and many of the devices affected had been previously subject to repairs by third party companies. On the whole, if customers had hardware issues like a cracked screen, they would have likely saved costs by going to a third-party repairer, rather than to Apple. However, having their devices fixed as part of service that was unregulated by Apple would have meant that they risked product faults down the track. This is especially pertinent where third party repairers have altered the connection of the Touch ID and the other components of the device in order to fix them.ACCC has a bone to pick with Apple precisely because it has discovered that the company had refused to repair the faulty devices of their paying customers if said customers had previously used an “unauthorised” repairer - even though the previous repair was not related to the current fault at all. Apple Support has been also vague about this, and it appears that they generally tell customers to take the device to an Apple-authorised store for repairs. They also state that if any part has been replaced elsewhere, that it is on the customer to contact Apple for pricing around “out of warranty repairs”.It is clear that Australian consumer law grants certain rights and remedies in regards to products not meeting consumer guarantees that relate to quality and suitability. Apple’s decidedly lukewarm response to customers who may have sought frugal alternatives to repairs is hardly a satisfactory response for the multi-billion dollar company, and ACCC’s chairman, Rod Sims, has explicitly recognised this shortcoming. He made it particularly clear in a public statement that “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." Sims was also adamant that punishing a consumer for choosing third-party repairers could well dissuade future consumers from making informed choices about the maintenance and purchase of their products.ACCC is seeking penalties of up to $1.1 million per breach, in addition to injunctions, declarations, compliance program orders and the like to be issued. In light of the kerfuffle over the ditch, what does that mean for consumers in New Zealand?Here, the Consumer Guarantees Act 1993 sets out the statutory rights and guarantees for the consumers to action against the suppliers and manufacturers. In terms of how that applies to the everyday Kiwi, the Ministry for Business, Innovation and Employment has put out a helpful list of criteria, suggesting that all consumer products must:

• be of acceptable quality (durable, safe, fit for purpose, free from defects, acceptable in look or finish)
• be fit for any particular purpose you have told the supplier
• match a description, sample or model shown to you
• have good legal title, e.g. be able to be sold and not have any security interests registered against them
• be a reasonable price if no price is set
• arrive on time (within a reasonable time if not agreed) and in good condition
• have spare parts and repair facilities available (manufacturer is responsible). This does not apply if you are told about limited availability before you buy.

Judging from the comprehensive list above, it is clear that if the same circumstances were to manifest in New Zealand, Apple would have a hard time justifying their commercial practices with regards to repairs. This approach by Apple is objectively discouraging people from seeking out cheaper alternatives to more simple repairs; it penalises consumers for making financial choices. This refusal to repair phones clearly goes against the rights that consumers are afforded under the Consumer Guarantees Act; Apple’s own update was identified as the cause of the phones becoming faulty, and it goes without saying that any hardship borne by consumers should not be exacerbated by a corporate lack of action.Apple should be a company that complies with New Zealand and Australian law in relation to consumer guarantees, instead of a company that relies on a “tough luck” approach to those who buy its products. What can we do if we are consumers on the receiving end of these questionable practices? The logical thing to do if any software errors trigger faults in your products (error 53 or otherwise) is to go back to your supplier and require that the ‘remediable’ and not ‘substantial’ failures be fixed. If they try to double down on Apple’s rhetoric of asking consumers to harden up for not wanting to pay exorbitant repair fees or if they do not fix your product in a reasonable time, then you have the recourse of going to a third party to get it repaired and to recover the costs. Going to get your iPhone fixed should not be something that results in it being unusable the next time Apple decides to launch a buggy update. With the businesses practices of companies becoming more exposed to the public eye, now is as good a time as any for consumers to ensure that they know their rights and to ensure that they are being adequately protected in the marketplace.–The views expressed in the posts and comments of this blog do not necessarily reflect those of the Equal Justice Project. They should be understood as the personal opinions of the author. No information on this blog will be understood as official. The Equal Justice Project makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The Equal Justice Project will not be liable for any errors or omissions in this information nor for the availability of this information.