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Apple slapped with fine in Australia for misleading customers

Published Jun 19th, 2018 6:50AM EDT
Apple Australia Fine

Apple is often thought of as the most pro-consumer company in the consumer electronics industry — and for the most part, it’s true. Apple is a for-profit company and like any other, its primary goal is to make money. If you think Apple cares about you more than it cares about your money, you’re crazy. But even with that having been said, Apple often isn’t always quite as “heartless” as its rivals. More so than other companies in the consumer electronics industry, Apple puts an emphasis on things like consumer privacy and, at times, transparency.

Of course that doesn’t stop the company from putting profit ahead of consumer needs at times. For example, iPhones don’t support microSD cards so customers are forced to buy higher-margin models with more storage. It also doesn’t stop Apple from making missteps that inadvertently end up harming consumers. The best-known example of that was Apple’s policy of secretly throttling older iPhone models. Another example is Apple’s policy surrounding the “Error 53” bug that surfaced a couple of years ago, and now the time has come for Apple to pay the piper for its missteps. Sort of.

Apple on Tuesday was slapped with a fine by Australia’s Federal Court for misleading consumers with regard to the Error 53 bug that impacted some iPhone 6 devices back in 2016. The fine totaled just $9 million AUD, however, which amounts to just over $6.6 million USD. That can’t even be categorized as a slap on the wrist for Apple. To put it in perspective, Apple earned about that much in net income each hour during the March quarter in 2018.

So, what’s the Error 53 bug all about? Long story short, some iPhone 6 users back in 2015 found that when third-party repair shops fixed problems related to the home button, the phones would be completely disabled the next time an iOS update was installed. As it turned out, this wasn’t so much a bug, but rather a deliberate “security feature.”

The Australian Competition and Consumer Commission (ACCC) sued Apple over the issue, and today’s fine is a result of that case.

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

In addition to paying the penalty, if you can call it that, Apple promised not to “engage in this kind of conduct in the future.”

“We’re constantly looking for ways to enhance the service we deliver and we had very productive conversations with the ACCC about this,” a spokesperson said in a statement, according to a report from The Sydney Morning Herald.. “We will continue to do all we can to deliver excellent service to all of our customers in Australia.”

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.