Commerce Commission issues warning letter to Apple not to mislead consumers

The Commerce Commission says Apple breached consumer law. Photo / Getty Images

The Commerce Commission has issued a warning to tech giant Apple after it "likely" misled customers over their replacement rights.

The commission is concerned Apple Sales New Zealand misled consumers, under the Consumer Guarantees Act and Fair Trading Act, about their rights around replacement products.

It believes Apple breached consumer law by telling consumers that its products are covered by a guarantee for two years, and for referring them to the manufacturer of non-Apple branded products, excluding Apple's liability for certain products.

In the eight-page warning letter, the Commission said: "We consider that Apple is likely to be misleading consumers by trying to exclude its liability for non-Apple branded products.

"If this behaviour is continuing, we recommend you take immediate action to address our concerns and seek legal advice about complying with the Fair Trading Act."

The regulator began investigating complaints from consumers in April 2016 who had sought remedies for faulty Apple products, information on Apple's website, sales and refund terms and conditions for online Apple Store purchases, and documents provided with replacement products.

Commissioner Anna Rawlings said Apple had told some customers that their products were covered by consumer law for two years but under the Consumer Guarantees Act guarantees do not expire after a legally prescribed period of time.

"What is reasonable depends on the nature of the goods, any statements made about the goods and how the consumer, in fact, uses the goods," Rawlings said.

"Although businesses may form a view about how long a product should generally last, they must assess each reported fault on its own merits. They should not base decisions solely on how long a consumer has owned a product. The reasonable lifespan of a product will depend very much on what the product is."

The commission's investigation found Apple was likely to have misled consumers by trying to exclude its liability for non-Apple branded products, "when Apple is responsible, as a retailer, for compliance with the consumer guarantees applying to all products it sells, even if it is not the manufacturer".

It also looked into a complaint from a customer after three iPhone 6 Plus devices failed in different ways and was told by an Apple representative that Apple had a policy of providing four replacements before considering an alternative remedy when the CGA contains no requirement on a set number of faults.

The commission also found Apple provided conflicting information about the availability of spare parts and repairs and in making misleading statements that replacement products.

"It is natural that many retailers may wish to liaise with manufacturers to assess and remedy product defects but they must not point blank refuse to address consumer complaints and refer consumers exclusively to manufacturers for attention," Rawlings said.

The commission said Apple had cooperated during its investigation.

"Apple voluntarily made changes to respond to our concerns, including making clear to its staff that consumer law rights are not time-bound," the regulator said.

"We expect Apple to consider the other issues identified in our warning and amend its practices accordingly."

Apple had no comment to make when approached by the Herald.