Apple loses appeal; fined $1.2m for 'misleading' AppleCare customers

Summary:Apple remains in hot water with the Italian antitrust authorities after it was found to be "misleading" customers on a one-year warranty, when consumers should have been given two.

Apple today lost its appeal in an Italian court, after it was found to have misled consumers into shelling out for AppleCare extended warranty when it was not necessary.

In December, Apple was fined €900,000 ($1.2m) by Italian antitrust authorities after it had failed to inform its customers of their legal consumer rights.

The fruit-named technology retailer said it would appeal. That appeal fell through and Apple walks away with a meagre fine and a slap on the wrist.

Under Italian law, products bought are given two years warranty by default. But Apple knowingly provided a one-year warranty for its Macs and iOS devices, including iPhones and iPads, whilst pushing its additional year of extended warranty in form of a premium service.

Apple added disclosures to its Italian online store as per the first court's order, after the company was found not to have adequately informed its customers of their legal right.

The news comes hot off the heels of 11 European consumer groups complaining that AppleCare warranties violate EU law. A formal notice was issued by the European Consumers' Organisation requesting the company no longer sells products with a one-year warranty.

The minimum warranty for products sold in the EU is two years. Apple's stance on one-year warranties, as it pedals its extended warranty service, could ultimately be found to be breaking European law.

If that's the case and an antitrust inquiry is started, the company could face a fine of up to 10 percent of its global annual turnover. Seeing as the company recently closed at the $600 a share mark, Apple could face a fine of around $10--12 billion.

I bet it's wishing it held onto a bit more of its cash reserve now; just in case it gets sued or fined.

Image source: Apple.

Related:

Topics: Apple

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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