Apple shares news: Australian court fines tech giant over misleading customers

Apple shares fell Monday as the tech giant lost a court case in Australia and was fined A$9 million for misleading customers.

Apple shares news: Australian court fines tech giant over misleading customers

Apple shares closed lower in the US Monday, after the Australian Federal Court fined the tech giant A$9 million (£5 million) for misleading customers and failing to fix their devices after third-party repairs induced ‘error 53’.  

Apple admitted it had told over 200 customers their devices weren’t eligible for a free repair, even though they were.

Apple shares ended the US Monday trading session 0.05% lower at $188.74. The stock is also lower in out-of-hours activity.

Apple’s ‘error 53’ case

Complaints were first raised in Australia in 2016, that after a third-party repair on a cracked screen or touch ID button that was no longer working had been carried out on their iPhone or iPad, touch ID was no longer enabled. It resulted in users being shown ‘error 53’ on an unusable device.

Apple said this was a security measure and added that those who had taken their devices to a third-party repair store, weren’t eligible for a refund from Apple. The tech innovator did attempt a remedy with an update in 2017. However, this failed in many cases with the touch ID button still unusable.

Following a court case brought by the Australian Competition and Consumer Commission, Apple has since admitted that it incorrectly told 275 Australian customers they weren’t eligible for a refund from Apple for the error 53 fault, after using third-party repair services.

ACCC win results in Apple fine

Following this admission from Apple, the Federal court found in favour of the ACCC and has subsequently fined Apple A$9 million. That’s in addition to Apple’s own actions where it has contacted and compensated some 5,000 customers who have been affected by this issue.

“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,” said ACCC Commissioner, Sara Court.

“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,” Court said.

Court also said that where a major failure of a tech device occurs, the customer has the right to opt for either a full refund or a new, like-for-like replacement.

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