Apple Australia admits it must do better to meet Consumer Law in undertaking to ACCC

High flying Apple Australia, the company that tried to sell a 3G tablet with a 4G name, has been brought down a notch today, having been forced to make court enforceable undertakings to the ACCC that it will improve its consumer practices and abide by the Australian Consumer Law (ACL).

Although Apple Australia has previous been hit with fines for attempting to sell a 3G-only iPad as the “iPad Wi-Fi + 4G”, this was not the main reason for the ACCC taking a bite out of the California-based tech giant. The ACCC is more concerned that Apple and its staff are potentially misleading consumers in regards to their statuary guaranties, both on Apple products and on third party brands sold through Apple’s various retail presences.

For example, the ACCC is concerned that consumers who purchase, say, a pair of Beats headphones from an Apple store are being referred to the manufacturer when it is actually the retailer that is responsible for handing their enquiries.

The ACCC reports that, “Apple has since acknowledged the ACCC’s concerns, and that some of these representations to consumers may have contravened the ACL.  Apple has worked with the ACCC to resolve these concerns, and has now committed to taking a number of compliance measures”.

“The ACCC was concerned that Apple was applying its own warranties and refund policies effectively to the exclusion of the consumer guarantees contained in the Australian Consumer Law,” said ACCC chairman Rod Sims.

“This undertaking serves as an important reminder to businesses that while voluntary or express warranties can provide services in addition to the consumer guarantee rights of the ACL, they cannot replace or remove those ACL guarantee rights.”

As part of this undertaking, “Apple has publicly acknowledged that, without limiting consumers’ rights, Apple will provide its own remedies equivalent to those remedies in the consumer guarantee provisions of the ACL at any time within 24 months of the date of purchase.

“To avoid any doubt, Apple has also acknowledged that the Australian Consumer Law may provide for remedies beyond 24 months for a number of its products.”

In June 2012, Apple Australia was fined $2.25 million by the Federal Court following legal action brought against it by the ACCC. The ACCC had successfully argued that:

Apple promoted the iPad with WiFi + 4G in Australia from 8 March to 12 May 2012 on its website, its online store and in its retail store. Apple resellers also promoted the iPad with WiFi + 4G online and in their stores using promotional materials supplied by Apple.

However, the iPad with WiFi + 4G could not connect to any networks which have been promoted in Australia as 4G networks, in particular Telstra’s LTE network.

The ACCC reports that, going forward, Apple Australia must do the following:

– Not make representations to consumers which the ACCC was concerned were contrary to the ACL;
– Continue to offer a consumer redress program in which consumers potentially affected by the alleged conduct can go to Apple to have their claims re-assessed by Apple in accordance with the ACL;
– Continue to implement an Apple program to improve ACL compliance which includes improved training for Apple sales staff and management staff and all Apple call centre representatives who have contact with Australian consumers;
– Continue to monitor and review its ACL compliance going forward to ensure the conduct of concern to the ACCC does not occur again;
– Maintain a webpage aimed at providing information and clarifying the differences between the coverage provided by the ACL and Apple’s voluntary limited manufacturer’s warranty;
– Continue to make available in its retail stores in Australia copies of the ACCC’s “Repair, Replace, Refund” brochure.

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