Australian consumer watchdog, the Australian Competitor and Consumer Commission (ACCC) have slapped an A$9m fine on Apple after it came to light that Apple allegedly used a software update that disabled iPhones with cracked screens repaired by third parties, reporting the code Error 53.
The fine came after the ACCC found Apple had used a software update to disable hundreds of Australian iPhones and iPads and refused to unlock them if they got repaired by non-Apple authorised repair agencies.
The matter went to Australian Federal Court court who ruled in the ACCC’s favour. The presiding judge said Apple had breached Australian consumer laws in telling 275 customers they were not going to get locked phones and tablets unlocked because their hardware got repaired by a third party.
“Consumer guarantee rights under the Australian Consumer Law exist independently of any manufacturer’s warranty and are not extinguished simply because a consumer has goods repaired by a third party,” said ACCC Chairman Rod Sims in a media statement issued after the ruling.
Between September 2014 and February 2016, several hundred Apple customers who had downloaded software updates got greeted by the error 53 message.
The glitch impacted hardware that had undergone Touch ID module and screen, flex cable and water-damaged component repair by firms who were not Apple’s Authorised Service Providers. Apple eventually acknowledged the issue and said that it was linked to Touch ID security.
Customers who asked Apple to sort out their devices got told it would cost them to get the error fixed. The ACCC said after it informed Apple of its investigation, Apple did seek to compensate customers whose phones and tablets had been rendered inoperable by the update.
According to the ACCC, Apple has confirmed that they’ve contacted 5,000 customers. Apple has said it will improve staff training and provide information about warranties and consumer law via its website and will review processes to ensure compliance.
It isn’t the first time that the ACCC has taken issue with Apple. Last year, the consumer watchdog refused Australia’s major banks permission to bargain over participation in Apple Pay collectively. In 2012 the ACCC also fined Apple A$2.3 million for misleading consumers with iPad marketing promising 4G compatibility.
Controversy in New Zealand has raged for some time over Apple’s tax affairs after it came to light that Apple had paid no income tax to New Zealand’s Inland Revenue for close to a decade despite billions of dollars worth of iPhones and iPads being sold in New Zealand.