Italy goes after Apple over warranty issue

IDG News Service - In a case that could have implications for Apple's business across the European Union, Italy's competition and markets authority has opened new proceedings against Apple for failing to respect the country's consumer law that gives a free two-year warranty for electronic products, a spokeswoman for the Antitrust Authority confirmed Tuesday.

"Apple has 30 days to present its counter-arguments and it could face a fine of up to a $189,000 for each of the two practices under examination," antitrust spokeswoman Emanuela Goggiomani said. "If the company continues to breach the Antitrust Authority's order, further proceedings could lead to a 30-day suspension of trading in Italy," the spokeswoman said.

Goggiomani said the Authority had waited to see whether the Regional Administrative Tribunal (TAR) of Lazio upheld a $1.2 million fine it imposed on Apple last December for breaches of Italian consumer law and whether the company modified its behavior following confirmation by the court in May.

"We checked what Apple was doing and found that it was completely inadequate. The two-year warranty is the implementation of a European Union directive, so the case is being closely watched by Antitrust Authorities in other European countries," Goggiomani said.

In a statement published on its website, the Italian Antitrust Authority said information provided by Apple Sales International, Apple Italia and Apple Retail Italia amounted to unfair commercial practice and was likely to mislead consumers in relation to their statutory rights. The companies were imposing "non-contractual, onerous and disproportionate obstacles that hinder the exercise of consumer entitlements," the statement said.

Apple has been criticized for requiring customers seeking assistance under the free national warranty to provide proof, for example through the report of an independent expert, of the existence of a defect. The Antitrust Authority has recognized that Apple has improved its communication in relation to consumer rights but considers that the improvement does not yet go far enough.

"Everything leads us to believe that if Apple doesn't get its act together quickly it risks damaging the extraordinary reputation it has won for itself in the eyes of its customers and, above all, being subjected to special vigilance by our Antitrust Authority," Internet law expert Guido Scorza said in an article for the online Italian edition of Wired magazine.

Apple denies that it is at fault. "We've appealed the recent decision of the court as it was, in our view, based upon an incorrect interpretation of the law. We've introduced a number of measures to address the [Authority's] concerns and we disagree with their latest complaint," the company said in a statement.