Apple fined $9 million (AUD) for misleading iPhone and iPad owners in Australia over "error 53" repairs
Thanks to a 14-hour time difference between Australia and New York, it was Tuesday morning in Australia when a Federal Court in that country ordered Apple to pay a $9 million Australian Dollar fine ($6.6 million USD). This was a penalty slapped on Apple for allegedly misleading iPhone and iPad owners in Australia about their rights under the country's consumer laws. The Australian Competition and Consumer Commission (ACCC) took Apple to court after many iPhone and iPad users in the country found their devices disabled by an update years ago to iOS 9. Prior to the update, several iPhone and iPad users turned to third party repair shops to fix a problem with Touch ID, and these places used non-Apple repairmen and components to repair disabled units.
But having a third-party repairman install unauthorized Touch ID components resulted in "error 53" messages popping up on affected iPhone and iPad models once iOS 9 was installed. And that error message indicated that a user's iPhone or iPad was bricked.
During its investigation, the Aussie consumer watchdog agency got Apple to admit that it told at least 275 Australian customers affected by 'error 53' that they were no longer Apple's problem if their iOS devices were repaired by third party shops. But ACCC commissioner Sarah Court said that under the Australian Consumer Law, the faulty products were entitled to a repair or replacement and possibly a refund even if a third-party shop, not authorized by Apple, repaired them using parts not approved by Apple.
In some situations, Apple replaced defective units with refurbished models, a common practice in the states. Commissioner Court said that this was unacceptable in Australia. "If people buy an iPhone or iPad from Apple and it suffers a major failure, they are entitled to a refund. If customers would prefer a replacement, they are entitled to a new device as opposed to refurbished, if one is available."
Before Tuesday's decision, Apple got in touch with 5,000 Australian iOS users whose devices stopped working thanks to "error 53," and offered to compensate them because of the problem. Apple's Australian arm also said that it would improve training of its staff, post information about its warranties and Australian Consumer Law on its web site, and improve systems and compliance with the consumer laws in the the country.
In the U.S., a class action suit was filed over "error 53" in February 2016. The suit demanded over $5 million from Apple for damages and restitution. In June 2016, a judge dismissed the class action suit, claiming that the plaintiffs lacked standing to bring the suit, and were not able to prove permanent data loss.