Apple fined $9m for misleading customers

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The "error 53" disabled some iPhones and iPads after consumers updated Apple's iOS operating system.

Prior to the decision, Federal Court judge Mark Moshinsky had referred Apple and the ACCC to mediation over the matter in November.

Then, in June 2017, the ACCC conducted an undercover operation involving 13 calls with Apple retailers in Australia, in which Apple representatives allegedly said Apple did not have responsibility to remedy faulty iPhones repaired by an unauthorised third party.

Under Australian Consumer Law, if a business fails to give you a free fix on a legitimately faulty product, you can get it done elsewhere and pass on the costs to the business.

But it is a small fraction in Apple's balance sheet, considering the company is worth $1.25 trillion ($US927.7 billion) on the stock market.

The federal court today ruled in favour of the Australian Competition and Consumer Commission (ACCC), which filed a case against Apple on behalf of customers past year.

Users complained Apple is denying them any of kind of solution, saying their devices have received unauthorized repairs.

ACCC Commissioner Sarah Court said this was a direct violation of consumer rights in Australia.

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But the important exception is that if the third-party damages the goods - whether it is a computer, phone, auto or any other product - the manufacturer is not obliged to offer any consumer remedies.

Apple admitted that it misled 275 people about their rights to remedies such as repairs and replacements.

"Global companies must ensure their returns policies are compliant with the Australian Consumer Law, or they will face ACCC action". "If customers would prefer a replacement, they are entitled to a new device as opposed to refurbished, if one is available", said Court.

A company spokeswoman told Reuters it had had "very productive conversations with the ACCC about this" but declined to comment further on the court finding.

A number of complaints arose after iPhone and iPad users downloaded an iOS update, which left the device useless and reporting an "error 53".

Apple's Australian subsidiary has also made a court enforceable undertaking.

Apple 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.

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