Apple has been slapped with a $9 million fine by the Federal Court for making false or misleading claims to hundreds of customers who had faulty iPhones and iPads repaired by a third party.
The competition watchdog took Apple to court after investigating complaints about how the tech giant told customers they were not entitled to a repair or replacement for their faulty devices if they had previously had them fixed by a third party repairer.
"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," a statement by the Australian Competition and Consumer Commission said on Tuesday.
The ACCC launched legal action against Apple in April 2017 claiming it had misled consumers about their warranty rights by routinely refusing to inspect or fix faulty devices for free if they had been repaired by a third party.
The action was sparked after an investigation into complaints by consumers about an "error 53" that disabled their iPhones and iPads after they downloaded an update to Apple's operating system.
The ACCC said Apple admitted that between February 2015 and February 2016 it had told at least 275 Australian customers affected by "error 53" that they were no longer eligible for a remedy if their device had been repaired by a third party.
"Apple's representations led customers to believe they'd be denied a remedy for their faulty device because they used a third party repairer," ACCC commissioner Sarah Court said.
"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."
An Apple spokeswoman told Reuters the company had "very productive conversations with the ACCC about this" without commenting further on the court finding.
Apple has offered to compensate about 5000 customers whose devices were disabled by "error 53".
The tech giant also told the court it would improve staff training, audit information about warranties and Australian Consumer Law on its website and improve its systems and procedures to ensure future compliance.
Opposition spokesman on competition and productivity Andrew Leigh again called for increased fines for breaches of consumer law.
"Bigger penalties deter dodgy behaviour and some of the revenue could be directed back into the commission's litigation budget, giving it more firepower to go after companies that flout the law," Mr Leigh said.
Australian Associated Press