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EU law forces Apple 2-year warranty

Technology giant Apple was fined 900,000 Euros (around £750,000) by the Italian Antitrust Authority last month for not offering enough protection to its customers. Apple offers a standard one year warranty with its products and according to the authority, it fails to inform of the customer’s legal right to a two-year warranty for technical support under the EU law. Apple invites its customers to purchase an additional warranty called Apple Care that extends the protection period for a further two years.

The fine

The penalties apply to three of Apple’s Italian divisions: Apple Italia, Apple Retail Italia and Apple Sales International. Apple was fined 400,000 Euros for misleading its customers by not recognising the length of the statutory guarantee as prescribed by the Italian consumer code and a further 500,000 Euros for offering the Apple Care protection that in part (for one year) overlaps with the free warranty. The company must also publish an extract from the authority’s ruling on Apple’s website and amend the Apple Care plan accordingly within 90 days to include details of the two-year warranty.

Similar claims are coming from the consumer groups in Germany, Spain and The Netherlands who also asked Apple to change its terms of warranty in their countries.

Apple’s reply

Apple is preparing to launch an appeal. On its website the company stated that it believes to be compliant with the Italian consumer law regulations and that it respects consumer’s rights. It also posted an explanation in the legal section of its website explaining that the EU consumer law gives warranty rights in addition to the one-year standard warranty from Apple and Apple Care plan. The statement goes further by summarising the differences between the warranty offered by the EU law and the one offered by Apple. The consumer law warranty offers protection for defects that were present on delivery as opposed to the Apple’s after customer takes delivery warranty. The Apple Care plan provides a warranty for three years from the date of purchase for Mac or Apple display and two years for Apple TV, iPad, iPhone or iPod and is available at an additional cost.

The implications

The fine imposed on Apple covers the alleged breach of European warranty laws in Italy only but there is nothing to stop consumers from other European countries to launch similar claims. Apple can argue that the Apple Care Protection Plan gives the customers more than the standard EU law warranty including telephone technical support and express replacement service. However, the company needs to make sure that it is transparent as to which features of the warranty are extra without misleading the customers. For Apple as a company the implications of the Italian Antitrust Authority’s fine are significant from the strategic point of view. Apple needs to make sure that the warranty rules within the EU are specifically tailored to the region and are not necessarily the same as the standard regulations for the US or other parts of the world where Apple’s products are sold.