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Apple Fined By Italy For Misleading Customers About Warranty Terms

Posted by Unknown on from the legal-obligations-are-for-other-people dept.

beaverdownunder writes "An Italian watchdog has fined Apple 900,000 euros ($1.2m, £750,000) for failing to inform Italian shoppers of their legal right to two years of technical support, recognizing instead only a one-year standard warranty. This had led people to pay extra for Apple's own support service, AppleCare, which overlapped with the government-mandated guarantee."

21 of 218 comments (clear)

  1. Not surprised... by AngryDeuce · · Score: 4, Informative

    Service plans are probably the most profitable thing anybody sells. Just like rebates, odds are very very high that the person buying said plan won't ever use it, so it's pretty much free money a lot of the time...

    1. Re:Not surprised... by Anonymous Coward · · Score: 5, Informative

      If you compare Apple Care with the Dell Next-Business-Day-Support, Apple Care is next to useless, at least in my experience. I've been asked to reinstall the OS even ofr trivial/obvious things (e.g. the soundcard being noisy even when muted, even during boot) - Dell ships a diagnostics tool inside the Bios and/or on CD, which you can go through even with a "technician" on the phone. Even if you managed to convince Apple that your Macbookpro is broken, you'll have to walk/drive it to a shop, and they'll take at least 14 days to fix it, if they manage fix it at all. With Dell, you can arrange for a technician to visit you the next day, or just have them send you the spare part in advance for easy to install things such as harddisks. This complete inability to support their own productts is really the traw that broke the camels back why I won't ever by another Apple product again.

    2. Re:Not surprised... by AngryDeuce · · Score: 4, Interesting

      I'm not speaking as to the quality of the plan, obviously some are better than others; I'm just saying from a business standpoint they make a lot of money. This is why Best Buy, Apple, pretty much any major electronics retailer are so aggressive pushing them whenever you buy something that is even covered by one. You can't buy cables at Best Buy without someone trying to sell you a $3 replacement plan. Hell, even Home Depot pushes replacement plans on stuff now, doesn't matter what it is, doesn't matter who even makes it...

      The "shady" part comes in when the business pushes plans to cover things that are already covered by law, not to mention other considerations (I know many credit cards have certain consumer protections if you use them to purchase a product, for instance). Curious as to how this will play out in Italy, but here in the States there is nothing illegal about taking advantage of a person's ignorance to their own rights as consumers. Ethically questionable, definitely, but not illegal. It's not their job to educate you as to what your rights are.

      Personally, when I worked for a company that dealt with these things, I was always honest and open about the benefits to the customer, and if there wasn't one (customer taking product out of the country where it's not covered anyway, for instance) I wouldn't try to push it on them...which is probably why I didn't last long in that particular job nor had particularly impressive commissions. Nothing against those who subscribe to "the hard sell", but I just couldn't bring myself to capitalize on customer ignorance like that.

    3. Re:Not surprised... by nahdude812 · · Score: 5, Informative

      Apple Care is better though

      No, it's really not.

      They have stores all over the world

      Yeah, just like most big brand stores, but this is not very relevant because the store you bought an item at is presumably local to you, so who cares if they also have a location in East Jabyyp? Unless you regularly travel a lot, the chances of this being useful is pretty low.

      if you are supported, they an tell you that

      There's the problem. It's not like Apple Care is one of those cell phone insurance plans where it covers anything that can go wrong. Plenty of things can go wrong that they will be happy to tell you is not covered - even stuff that is not a wear-and-tear fault. Try to get a reasonably expensive part replaced, such as a video card, and they'll tell you how they found some dust in your chassis, so it overheated and it's your fault for not keeping it clean (nevermind that you can't open the chassis on most modern macs without voiding the warranty anyway). At least that's what they told me for my wife's 3 month old iMac.

      Likewise my brother's 1 year old Macbook Pro had a recognized fault with its video card. It would sometimes just refuse to produce any video, sometimes to the built-in LCD, sometimes to the video out port, sometimes to both. Plenty of people with the same generation MBP had the same problem. He took it in to get it repaired, and was initially told it was covered since it was a known problem. When he went to pick it up a week later, they wanted $800 in parts in labor - even though he had been told it was going to be a covered repair. Their reason? The chassis had a scratch on it - seriously. They claimed this scratch (in an aluminum chassis) had caused the damage. They went ahead and made the repair without consulting him, and now refused to return his laptop until he coughed up the cash.

      Also, if it's not this year's model, they're not going to have replacement parts on hand, and it's going to be 1-2 weeks before you can get that replacement part.

      But it seems like a good idea for someone who isn't tech savvy and doesn't want to bother their friends for help

      That's probably true. If you don't know how to use your computer, the Geniuses can tell you how to double click. Make sure to call ahead for an appointment, they're booked until next week, but they'll be happy to let you sit in their gallery store for 45 minutes after your appointment time while you have nothing else to do but decide if maybe buying a new one is a better path than being without a computer for two weeks while your old one is getting fixed on your own dime despite having an extended warranty.

      --
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    4. Re:Not surprised... by Entropius · · Score: 5, Insightful

      They have to be making a shitton of money on hardware. I bought a laptop from Sager last summer for $1100: 1920x1080 extended-gamut screen, quad-core Sandy Bridge processor, Geforce 555M, the works. Very nice machine. I wound up pricing those specs on Apple's website: you couldn't get a graphics card on par with the 555M for love nor money from Apple, and to get everything else it'd be around $2300.

      The Apple machine has nicer speakers and that aluminium body, but beyond that -- Apple's got to be pocketing a large part of that $1200 difference.

  2. Oh *now* they step in to protect their citizens by elrous0 · · Score: 5, Funny

    Where was this concerned Italian government when MTV sent over the Jersey Shore cast?

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
  3. Apple got off lightly... by GrpA · · Score: 4, Insightful

    That is corporate ethics at it's absolute worst. You can be sure that it's likely Apple in Italy knew of the situation and was milking it if they got a fine like that... :(

    I wonder if the fine even approaches the profits they made abusing the laws like that.

    GrpA

    --
    Enjoy science fiction? "Turing Evolved" - AI, Mecha, Androids and rail-gun battles. What more could you want?
    1. Re:Apple got off lightly... by TheRaven64 · · Score: 5, Informative

      It's pretty common with corporations - especially US corporations - in the EU. There are quite strong consumer protection laws that mean that a lot of 'extended warranties' are just promises to honour the terms required by law. They just offer the same service that they offer in the USA, where there are much weaker minimum standards.

      --
      I am TheRaven on Soylent News
    2. Re:Apple got off lightly... by Anonymous Coward · · Score: 5, Insightful

      The EU protects consumer rights. American companies an the like need to get a clue. Try to avoid the gray areas instead of screwing the customer.

    3. Re:Apple got off lightly... by GrpA · · Score: 4, Insightful

      Not likely... Apple is a true multinational and would be run and staffed by Italians for the most of it. And it's not bullying - it's a clear case of failing to meet their warranty obligations.

      To be fair, consumer laws in the US are pretty poor and there's very little government intervention even when US companies deliberately and systematically break the law.

      But this was not in the US, it was in Italy and like much of the the rest of the world, there are laws in Italy to protect consumers from dodgy goods. This is known as Statutory Warranty and you can be sure that if a company was fined so much, it is usually because they knew the law and were breaking it on purpose as a means to making extra profits.

      All Apple had to do is compete on the same level playing field as everyone else in Italy ( and in fact, most of the rest of the world ) and it looks like they chose not to, got caught and got punished.

      GrpA

      --
      Enjoy science fiction? "Turing Evolved" - AI, Mecha, Androids and rail-gun battles. What more could you want?
    4. Re:Apple got off lightly... by mwvdlee · · Score: 4, Informative

      In the EU, companies still aren't people, so it's not bullying.

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    5. Re:Apple got off lightly... by Tsingi · · Score: 5, Interesting

      To be fair, consumer laws in the US are pretty poor and there's very little government intervention even when US companies deliberately and systematically break the law.

      But this was not in the US, it was in Italy and like much of the the rest of the world, there are laws in Italy to protect consumers from dodgy goods.

      US: society equals corporations and the laws reflect that
      EU: society equals citizens and the laws reflect that.

      elsewhere? Depends on how badly the government has been screwed by corporations (IMF, World Bank, etc...) already.

  4. Re:Perfect Match by Flyerman · · Score: 4, Funny

    It's almost a form of taxation. Apple takes Italian fanboi moneys, then the government fines Apple.

    The real question is whether Apple comes out ahead or behind after the fine.

  5. Apple: 1, Italy: 0 by TheSpoom · · Score: 4, Insightful

    Apple's profits from selling the additional warranties in the entire country of Italy is almost certainly more than the fine, so it was a good business decision for them to flout local law if this is all they're going to face.

    --
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    - E. Debs
  6. Easy to fix by drinkypoo · · Score: 4, Insightful

    When a company does this to a product, force them to provide a lifetime warranty on that product. They will be much more careful.

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    1. Re:Easy to fix by arth1 · · Score: 4, Interesting

      Italy can have a law that says "everything made by anyone must have a lifetime warranty" or they can have nice toys like Apple ipods. Italy can't have both -- Apple (and everyone else) would simply not sell there.

      Some Western European countries do have reclamation laws similar to "lifetime warranty", where if a product fails within a period shorter than what should be expected for the type of product, without it being the fault of the user, the seller is at fault and has to provide repairs or replacements.
      Even if the warranty is two years, if a fence or roof fails after ten years, the buyer can get it fixed or replaced, because a fence or roof is reasonably supposed to last longer than ten years. Similar for other products - it may be reasonable to expect a TV to last for at least five years, so when it breaks after four, the buyer may have reclamation rights, even if the warranty has expired.
      While the warranty covers production defects, the reclamation rights cover items that may not have any defects, but still fail due to a bad design that the customer could have no reasonable way of knowing existed.

      That doesn't stop companies from selling products in these countries, but it does mean that they charge more, to cover extra parts inventories and/or replacements.
      I had a five year old washing machine repaired at no cost to me, because it had rusted. As a washer could be expected to last for more than five years and quite often be wet on the inside, this was not in any way the buyer's (my) fault.

  7. I thought it was already worthless by erroneus · · Score: 4, Insightful

    "Technical Support" from Apple is like going to church. You get told things like "because that's the way it is" and when you press, you never get the "why" part of it. I learned long ago about the compatibility between Apple and business -- there is none by the standards I have come to expect in the PC world. There is no "next business day, on site, accidental damage" support from Apple. When I learned that, I could never again take them seriously where business was concerned.

  8. Re:Perfect Match by Anonymous Coward · · Score: 5, Informative

    Tho years of guarantee on consumer goods is not just an Italian law, it is a European Union directive.

  9. Re:AppleCare by TheCarp · · Score: 4, Informative

    Sure but thats not the point. If they had informed their customers of the 2 year warranty that they were entitled to by law, that would have informed their decision as to whether to go for the extra AppleCare or not. The thing is, they thought the choice was between AppleCare and a 1 year warranty.... but it wasn't. They were misinformed, by the same party who was profiting from decision, and thus had motive to mislead them.

    --
    "I opened my eyes, and everything went dark again"
  10. Re:AppleCare by angel'o'sphere · · Score: 4, Insightful

    If they had informed their customers of the 2 year warranty that they were entitled to by law,

    Every european customer is supposed to know

    that. Without seeing the actual court ruling I only can assume that some customer rights organizations filed a suit because they found the apple advertizings missleading.

    The thing is, they thought the choice was between AppleCare and a 1 year warranty.... but it wasn't. They were misinformed, by the same party who was profiting from decision, and thus had motive to mislead them.

    That is what the newspapers claim, and the court (seems to have) ruled. However I find this unbelieveable.
    Every product in the EU since ages has a law gurranteed 2 years "guarranty". If you see how few people buy the AppleCare extra guarranty I find this whole case bollocks ...

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  11. Re:Perfect Match by Nuskrad · · Score: 4, Informative

    Actually, the UK implements this directive through the Sales of Goods Act, which gives a consumer redress against the retailer for up to 6 years if goods do not conform with the sales contract, or last a 'reasonable' length of time.