Apple warranty ads should be examined, says EU justice chief

Apple warranty ads should be examined, says EU justice chief

Summary: Apple's warranty flap continues to stir in Europe, as the bloc's justice chief warns that the limited protection offered to Apple customers should be investigated.

TOPICS: Apple, iPhone, iPad, EU

Europe's justice chief has said that Apple's warranty practices should be examined by the Europe's 27 member states, following an ongoing dispute over how long the iPhone and iPad maker should offer product guarantees.

EU Justice Commissioner Viviane Reding said in a letter to European ministers that the Cupertino, CA.-based technology giant should be probed to see whether its practices fall foul of European consumer law, according to Bloomberg, who obtained a copy of the letter.

In the letter, Reding claimed: "Apple prominently advertised that its products come with a one-year manufacturer warranty but failed to clearly indicate the consumers' automatic and free-of-cost entitlement to a minimum two-year guarantee under EU law."

"These are unacceptable marketing practices," she added.

According to German publication Der Spiegel, who also reported the contents of the letter, Reding said: "It seems that Apple failed to provide consumers clear, truthful, and complete information about what they are entitled under EU law."

An European Commission spokesperson confirmed the letter, dated September 21, 2012, was sent to all 27 member state ministers responsible for consumer protection, following complaints from consumer organizations in 11 member states, including Germany, Italy, and Portugal. 

The flap began when Apple was fined €900,000 ($1.2m) by Italian antitrust competition authorities after Apple failed to inform its customers of their consumer rights under EU law when buying a premium AppleCare Protection Plan that extends a product's warranty by a year to two years, despite EU law giving customers an automatic two-year warranty.

Apple appealed the ruling that it "misled" consumers, but lost its bid to overturn the fine. The technology giant soon after updated its warranty pages to include the EU-imposed warranty extension of two years, but customers and consumer groups alike were quick to criticize the firm for its vague language.

Screen Shot 2012-10-01 at 10.54.50
Source: Apple.

The European Commission can investigate matters of antitrust and anti-competitive behavior directly and internally, but when it comes to matters of consumer protection, much of the investigation must be passed on to and carried out by individual European member states; this was recently seen after Google's privacy policy inquiry was undertaken by French data protection authorities rather than the European Commission in Brussels.

As noted by Bloomberg, the EU can impose financial penalties against individual member states that fail to enforce EU rules, such as in this case on misleading advertising.

Apple did not respond to questions or for comment immediately outside U.S. business hours.

The Commission spokesperson told ZDNet in an emailed statement: "Apple's advertising policy could be misleading as Apple prominently advertised that its products come with a one-year manufacturer warranty but failed to clearly indicate the consumers’ automatic and free-of-cost entitlement to a minimum two-year guarantee under EU law."

"The Commission wants to make sure that EU law is effectively enforced everywhere in the EU. Consumers need to be confident that their rights apply regardless of the country in which they shop."

Update at 12:20 p.m. BST with additional detail provided by a Commission spokesperson.

Topics: Apple, iPhone, iPad, EU

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  • I wondered

    When the EU would go after Apple... I have little respect for the EU since the Microsoft browser lawsuit. Honestly how hard is it to use IE to browse to or to download either Firefox or Chrome? Or back in the days of the initial lawsuit to browse to to download Netscape? Is there a tech company that the EU has not sued yet? Microsoft and Google have been sued by the EU... who wants to take bets on which tech company is next after Apple?
    • PIIGS need cash fast

      What else do we expect from EU?
    • Juristiction

      If Apple want to sell their products in the EU, they have to abide by the laws within the EU. In this case, EU CONSUMERS are given the protection of a 2 year warranty, which covers manufacturing defects.
    • Apple

      Try to get support from Apple and you'll see!
      • Getting support from Apple is much easier than any other tech company.

        I've dealt with a large number of consumer tech support groups, and between not understanding them because of heavy accents, not getting the answers I needed to fix what was wrong, and getting a huge run-around when it came to getting what I needed to get something to complete a fix (really, why can't manufacturers include restore discs these days?), and Apple is the only company that generally figures it out the first time.
  • Why are we blaming the EU?

    Although I agree on the hassle the EU gave to Microsoft on browsers and yet skipped doing the same to Apple and Safari. I agree with them on Apple incorrectly defining warranty terms.
    Its common practice in the EU and maybe Apple just does not feel that confident in their products to warranty them for two years? They would rather sell you Apple care for their products. This is clearly Apple's way of making more money off its customers by deception of warranty terms.
  • The law is the law

    If Apple breaks EU law, then there are consequences. They are not compelled to trade in Europe. But if they do, they are expected to comply with it.

    Here in the EU, US companies heavily inflate prices - it is not uncommon for us to pay 60% higher prices for US products.

    It is often argued that the higher prices reflect greater regulation, but you cannot have it both ways - charging more and then disregarding the law.
  • 5 years in many countries

    Two year warranty rights are minimum under EU legislation. This legislation applies to the Member States, which means that no country in the EU may have laws that give consumers weaker rights.

    Some countries have stronger protection of consumer rights, and here in Norway it is automatically a five year warranty. (Except for the battery, which has a two year warranty.)

    Consumers must always contact the company who sold the product (not the one who produced it) to make use of the warranty.

    The question here is whether Apple engages in misleading marketing (which is illegal), by claiming that the products only have one year warranty. Of course, you get free repair or replacement of a 4 year old iphone that stop working because of manufacturing flaws or defects. The Consumer Authorities, which have a very good help desk, have the authority to enforce that.

    Misleading marketing can mean that more consumers are paying for "extra" warranty or that some think that the warranty has expired and fail to use it. Thus Apple earns more money.
    • 6 months

      Basically protection by the law in the EU is pretty basic compared to a real warranty. Also after 6 months or more YOU have to prove that the product was defect at delivery. Less than 6 months and the company has to prove that the product was not defect at delivery. So in principle companies can deny most claims made after 6 months.
  • Is this a $1.2M fine for symantics, or actually denying warranty coverge?

    This should not be an issue of "deceptive advertising" is EU law succeeds anything Apple says. If Apple is actually *denying* warranty coverage, then there is an issue. What isn't crystal clear to me is - which one is it?
  • Litigation

    All this litigation would suggest that there is going to be repurcation in the product development. All this money which could potential be lost is frightening.