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Apple dinged by consumer watchdog over specious Australian refund, return practices

post #1 of 35
Thread Starter 
Apple is once again under scrutiny for its product warranty practices overseas, as a consumer watchdog group in Australia has forced the company to change its refund and return policies to be in line with the country's laws.

AppleCare


According to the Australian Competition and Consumer Commission (ACCC), Apple has been misleading customers about its responsibility to return, replace or refund purchases of product found to be faulty, reports The Sydney Morning Herald.

"The ACCC was concerned that Apple was applying its own warranties and refund policies effectively to the exclusion of the consumer guarantees contained in the Australian Consumer Law," said ACCC chairman Rod Sims. "This undertaking serves as an important reminder to businesses that while voluntary or express warranties can provide services in addition to the consumer guarantee rights of the ACL, they cannot replace or remove those ACL guarantee rights."

In an investigation detailed on its website, the ACCC found Apple was applying its usual 14-day return policy and 12-month standard warranty to items sold in its physical and online stores. In addition, Apple employees were directing customers with malfunctioning or faulty non-Apple products to the original manufacturer.

Customer rights under the Australian Consumer Law, which went into effect in 2011, provides guarantees against faulty products for what is described as a reasonable amount of time based on cost and quality of the item. As such, the guarantees have no set time limit, Sims said.

The ACCC would be able to take Apple to court over the findings, but the company has agreed to an undertaking that calls for a revision of its policies in the region, as well as the retraining of staff to provide proper guidance regarding product warranties. In this case, Apple will institute warranties and return policies that extend up to 24 months after date of purchase and the company acknowledged that some products may be covered beyond that period.

Warranty
Screenshot of Apple's Australian consumer law information webpage. | Source: Apple


Apple will also conduct its own investigation into faulty product claims going back two years starting from Jan. 6, the official date of promised policy change. Over the next 90 days, the company will review returns and seek to remedy any failings as mandated by the ACL.

Finally, Apple will keep a consumer rights information page on its Australian website for a period of two years and keep ACCC consumer rights brochures handy at its brick-and-mortar Apple Stores.

Adding another layer to the issue, Apple had already extended its Australian AppleCare hardware guarantee to two years as of March this year, to bring the terms up to government standards. It was reported at the time that an internal email instructed employees not to discuss the changes with customers, a practice that may have contributed to the ACCC's findings.

Internationally, warranty issues have been an ongoing struggle for Apple. In 2012, the company was fined over $260,000 by the Italian government for offering customers two-year AppleCare warranties rather than the standard free one-year option. Local law requires two years of free protection. The same situation occurred in 2011, when Apple was fined $1.2 million over similar "unfair commercial practices."

Earlier this year, Apple was hit with a complaint from a non-profit consumer advocacy group in Belgium for improperly marketing AppleCare warranties.

A full copy of the Australian undertaking as posted by the ACCC can be found below:

post #2 of 35
I used to work at the ACCC, was a good job, good times 1smile.gif
post #3 of 35

Meanwhile Samsung and other phone manufacturers in Australia get away with offering a six month warranty on batteries, as they class them as "accessories".

 

I wonder why the ACCC isn't looking into that, especially given the large number of Galaxy S4's sold with faulty batteries.

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post #4 of 35
Like all the "best" laws, difficult to find and randomly applied.

Looking around on their web site without a provided link, their rules are extremely broad and unspecific. Example:

"Consumer guarantees on products and services

Since 1 January 2011, the following consumer guarantees on products and services apply.

Products must be of acceptable quality, that is:

safe, lasting, with no faults
look acceptable
do all the things someone would normally expect them to do.
Acceptable quality takes into account what would normally be expected for the type of product and cost.

Products must also:

match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
match any demonstration model or sample you asked for
be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing
come with full title and ownership
not carry any hidden debts or extra charges
come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
meet any extra promises made about performance, condition and quality, such as life time guarantees and money back offers
have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.
Services must:

be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage
be fit for the purpose or give the results that you and the business had agreed to
be delivered within a reasonable time when there is no agreed end date.
Consumer guarantees on products and services also apply to:

bundled products and services
gifts with proof of purchase
sale items
online products and services bought from Australian businesses
second-hand products from businesses, taking into account age and condition."

...That's right. Absolutely no visible or obvious rules that would tip off a business about specifics as mentioned by this agency.

http://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services

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post #5 of 35
Quote:
Originally Posted by SpamSandwich View Post

...That's right. Absolutely no visible or obvious rules that would tip off a business about specifics as mentioned by this agency.

http://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services

 

Law's are slightly vague like this to make it harder to get around. The general gist of what you've quotes is just saying you can't con people into paying to much for something that isn't worth it.

 

In terms of no obvious rules though, what about...

 

Quote:
Originally Posted by SpamSandwich View Post

Products must be of acceptable quality, that is:

safe, lasting, with no faults
look acceptable
do all the things someone would normally expect them to do.
Acceptable quality takes into account what would normally be expected for the type of product and cost.
 

 

If I bought a phone with a 2 year contract I would expect "safe, lasting, with no faults" to mean it would last the 2 years. Not if it broke in the second year I would have to pay to have it repaired. If I bought a Mac for £1000 I would also certainly expect it to last longer than a year, probably even longer than 2.

 

I'm quite surprised Apple are still trying to push these 1 year warranties everywhere. I know they have the brand power to get away with it, and it must save them money. But while the likes of Nokia and HTC give 2 year warranties as standard, Apple in comparison with it's huge profits is continuing to give off the impression it really doesn't care about it's customers. To the extent that it's willing to try and get around laws rather than fix something it made.

post #6 of 35
"Adding another layer to the issue, Apple had already extended its Australian AppleCare hardware guarantee to two years as of March this year, to bring the terms up to government standards. It was reported at the time that an internal email instructed employees not to discuss the changes with customers, a practice that may have contributed to the ACCC's findings."

I don't think Apple was unaware of what the ACCC required.

EDIT: Links to the AI source article aren't always clear even if highlighted in blue.
http://www.smh.com.au/digital-life/digital-life-news/apple-forced-to-adopt-new-refund-policy-under-australian-consumer-law-20131218-2zkkr.html
What's pretty surprising is that Apple admits they've misrepresented their consumer obligations and inappropriately applied some Apple policies and procedures per the Scribd doc AI also linked. Good on Apple! No courtroom showdown required.
Edited by Gatorguy - 12/18/13 at 5:01am
melior diabolus quem scies
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melior diabolus quem scies
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post #7 of 35

Apple should offer 2 years cover on their iPads/iPhones and 3 years warranty on their computers as standard. They make a truck load more money than any of their competitors per device sold and should be at the forefront of offering a decent warranty period.

 

Luckily in Europe and now Australia they are being forced to do the right thing, just a shame it is not standard practice for them.

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post #8 of 35

I have always thought that Apple should try to lead and set up a world-wide standard three year guarantee.  If they can do it where required by law, then they can do it everywhere, unless they make the machines differently, which I doubt.

 

Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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post #9 of 35
Quote:
Originally Posted by Bergermeister View Post

I have always thought that Apple should try to lead and set up a world-wide standard three year guarantee.  If they can do it where required by law, then they can do it everywhere, unless they make the machines differently, which I doubt.

Nice to see you back, bmeister! I thought you had thrown away all your Apple products in disgust after iOS7......1wink.gif
post #10 of 35
Quote:
Originally Posted by anantksundaram View Post


Nice to see you back, bmeister! I thought you had thrown away all your Apple products in disgust after iOS7......1wink.gif

 

 

Just holding on to what I have until they come to their senses, toss it and make a more visually pleasing iOS8!

 

Still hoping that Mac OS doesn't adopt any of the crap from iOS7...  But, I am ready to jump at a good system some time next year that will hold me for about five years (if the hardware doesn't give out).  Might buy a spare...

 

Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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post #11 of 35
Quote:
Originally Posted by AppleInsider View Post
Customer rights under the Australian Consumer Law, which went into effect in 2011, provides guarantees against faulty products for what is described as a reasonable amount of time based on cost and quality of the item.

 

What a piece of BS law, no specifics opens the door to endless lawsuits....

post #12 of 35
I'm always a bit surprised at the flak Apple gets for these warranty issues. On the occasions that I have had problems, Apple has always, without exception, fixed or replaced the item in question, in or out of warranty. I've not known another company like that.
post #13 of 35
Quote:
Originally Posted by muppetry View Post

I'm always a bit surprised at the flak Apple gets for these warranty issues. On the occasions that I have had problems, Apple has always, without exception, fixed or replaced the item in question, in or out of warranty. I've not known another company like that.

 

Maybe they are nicer where you are, whilst in warranty I have always found Apple's service to be top notch. But when my iPhone 4s' top button stopped working after 14 months (bearing in mind that the phone was in a protective case and was in pristine condition) the helpful Genius suggested that I either use an annoying software work around or cough up £150 for a replacement handset.

Or when my top of the line 2010 iMac decided to die after just 16 months another Apple Genius was happy to quote me just over £400 for a fix....

Let's just say that I rightly nailed them to the wall with the UK and Europes consumer protection laws and got them to fix both items at their expense.

I appreciate that everyones mileage may vary, but when you spend just over £2000 ($3300 US) on a computer and you look after it you should be able to expect AT LEAST 3 years use out of it. Sure if you go and buy a crap £300 Dell you can't really expect more than a year or so out of it, heck anything over that is a bonus.

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post #14 of 35
Quote:
Originally Posted by saarek View Post
 
Quote:
Originally Posted by muppetry View Post

I'm always a bit surprised at the flak Apple gets for these warranty issues. On the occasions that I have had problems, Apple has always, without exception, fixed or replaced the item in question, in or out of warranty. I've not known another company like that.

 

Maybe they are nicer where you are, whilst in warranty I have always found Apple's service to be top notch. But when my iPhone 4s' top button stopped working after 14 months (bearing in mind that the phone was in a protective case and was in pristine condition) the helpful Genius suggested that I either use an annoying software work around or cough up £150 for a replacement handset.

Or when my top of the line 2010 iMac decided to die after just 16 months another Apple Genius was happy to quote me just over £400 for a fix....

Let's just say that I rightly nailed them to the wall with the UK and Europes consumer protection laws and got them to fix both items at their expense.

I appreciate that everyones mileage may vary, but when you spend just over £2000 ($3300 US) on a computer and you look after it you should be able to expect AT LEAST 3 years use out of it. Sure if you go and buy a crap £300 Dell you can't really expect more than a year or so out of it, heck anything over that is a bonus.

 

I agree with your expectations - mine are similar. Maybe I have just been lucky.

post #15 of 35
How Bruce Sewell (Apple's General Counsel) has stayed around is beyond belief; a competent law team would not allow these endless and costly black eyes. If Sewell was a baseball player, he'd be batting .125 and dropping easy fly balls.
post #16 of 35
"Human decency" my ass.
post #17 of 35
Quote:
Originally Posted by herbapou View Post

What a piece of BS law, no specifics opens the door to endless lawsuits....
Endless? Not at all. Once precedent has been set them the law has context. No problem at all.

It would be impractical for consumer protection laws to be specific for every possible kind of consumer good.

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post #18 of 35
With NO set time limit how is anyone supposed to know their rights?

Idiots.
post #19 of 35
Quote:
Originally Posted by Bergermeister View Post


Just holding on to what I have until they come to their senses, toss it and make a more visually pleasing iOS8!

Still hoping that Mac OS doesn't adopt any of the crap from iOS7...  But, I am ready to jump at a good system some time next year that will hold me for about five years (if the hardware doesn't give out).  Might buy a spare...
iOS7 seems very popular with the younger demographic. Personally I love it and never want to go back to skeumorphic.

Each to thier own I guess.

Anyway, back to the thread...
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post #20 of 35

If Apple ever sets up a corporate presence in New Zealand they'll get exactly the same treatment here as in Australia. The NZ Consumer Guarantees Act has been around for a couple of decades, and proven to be highly effective, as well as fair and workable. It is this law that Australia used to base it own version that came into law in 2011.

 

If/when Apple moves into NZ properly, they'll have to flush the Applecare Protection Plans down the drain as they'll very quickly be tested and will, undoubtably, fail to meet the test of NZ law.

 

A computer that doesn't last three years, won't meet the Act. Neither would a smartphone that didn't last two years (presuming such devices have not been abused).

 

Arguably, the Act is between the seller and consumer (it doesn't apply to corporate purchases) and has less to do with the manufacturer. The consumer can take the goods back to the shop and rightly demand they be fixed or replaced (shop's discretion) to the standard set out in the Act. It's then up to the shop to battle it out with the manufacturer.

 

As I said, this has worked very well for a long time, so there's no point in arguing that it's a dumb law. It isn't. It works. It keeps companies honest and reduces the need for extended warranties to practically nil. Extended warranties are little more than additional profit for companies anyway. America could learn a little from Australia and NZ on this (as well has healthcare, but let's not get into that here!).

post #21 of 35

I had one of the MacBook Pros with the faulty NVIDIA GPUs. It failed after 2.5 years and Apple quoted more than the machine was worth to replace the motherboard.

 

Under Australian consumer guarantee laws I would have been covered as a notebook PC is expected to last longer than 2.5 years.

 

Unfortunately I had bought the MBP in the US so I was screwed :grumble:

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post #22 of 35

Yes - in fact Apple already has to adhere to NZ law. Any importer of consumer products is subject to the same law, whether they are headquartered here or not.

If any retailer tries to skirt their legal responsibilities it's an offense under consumer laws.

 

Elsewhere on the web people have suggested this leads to higher prices, however seeing as all products are subject to the same laws, and that prices for electronics can be cheaper here than in other countries with weaker consumer laws - this doesn't correlate.

Brands still price their products based on what is competitive and what the market will bear.

post #23 of 35
Quote:
Originally Posted by SteelBlades View Post

If Apple ever sets up a corporate presence in New Zealand they'll get exactly the same treatment here as in Australia. The NZ Consumer Guarantees Act has been around for a couple of decades, and proven to be highly effective, as well as fair and workable. It is this law that Australia used to base it own version that came into law in 2011.

Apple already has a NZ Address for sales from their website, so have to honor the CGA for sales
post #24 of 35
Quote:
Originally Posted by jfanning View Post


Apple already has a NZ Address for sales from their website, so have to honor the CGA for sales

You're right of course, but without a physical presence in NZ, it has proven very difficult to get Apple to honour the CGA.

post #25 of 35
Quote:
Originally Posted by SteelBlades View Post
 

If Apple ever sets up a corporate presence in New Zealand they'll get exactly the same treatment here as in Australia. The NZ Consumer Guarantees Act has been around for a couple of decades, and proven to be highly effective, as well as fair and workable. It is this law that Australia used to base it own version that came into law in 2011.

 

If/when Apple moves into NZ properly, they'll have to flush the Applecare Protection Plans down the drain as they'll very quickly be tested and will, undoubtably, fail to meet the test of NZ law.

 

A computer that doesn't last three years, won't meet the Act. Neither would a smartphone that didn't last two years (presuming such devices have not been abused).

 

Arguably, the Act is between the seller and consumer (it doesn't apply to corporate purchases) and has less to do with the manufacturer. The consumer can take the goods back to the shop and rightly demand they be fixed or replaced (shop's discretion) to the standard set out in the Act. It's then up to the shop to battle it out with the manufacturer.

 

As I said, this has worked very well for a long time, so there's no point in arguing that it's a dumb law. It isn't. It works. It keeps companies honest and reduces the need for extended warranties to practically nil. Extended warranties are little more than additional profit for companies anyway. America could learn a little from Australia and NZ on this (as well has healthcare, but let's not get into that here!).

 

I see Samsung has the same 6 month warranty on mobile phone batteries in New Zealand as in Australia.

 

http://www.samsung.com/nz/support/warranty/warrantyInformation.do?page=POLICY.WARRANTY

 

That should mean that Apple don't have to honour any battery issues after six months, so what was that about "flushing Applecare"?

 

Warranty issues would be handled by the place of purchase.

 

Vodafone Australia has been offering 2 year warranties on iPhones since 2010.

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post #26 of 35
Quote:
Originally Posted by hill60 View Post
 

 

I see Samsung has the same 6 month warranty on mobile phone batteries in New Zealand.

 

http://www.samsung.com/nz/support/warranty/warrantyInformation.do?page=POLICY.WARRANTY

 

That should mean that Apple shouldn't have to honour any battery issues after six months.

Well, to be honest, two wrongs don't make a right (i.e. just 'cause Samsung does it doesn't mean Apple can too). Having said that, batteries are like ink in a pen; they get used up/wear out/can't last indefinitely. But I'd suggest that based on the expectation that goods last a 'reasonable' length of time, as defined in the NZ Consumer Guarantees Act, 6 months is probably too short.

post #27 of 35
Quote:
Originally Posted by SteelBlades View Post
 

Well, to be honest, two wrongs don't make a right (i.e. just 'cause Samsung does it doesn't mean Apple can too). Having said that, batteries are like ink in a pen; they get used up/wear out/can't last indefinitely. But I'd suggest that based on the expectation that goods last a 'reasonable' length of time, as defined in the NZ Consumer Guarantees Act, 6 months is probably too short.

 

You'll find other phone manufacturers, such as Nokia also offer 6 month warranties on batteries.

 

Apple is in the minority by offering longer.

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post #28 of 35
Quote:
Originally Posted by lostkiwi View Post


iOS7 seems very popular with the younger demographic.

 

 

 

In another thread, I said this a couple of times.  I have tried to give them some slack, but not too much!

 

Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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post #29 of 35
Quote:
Originally Posted by SteelBlades View Post

You're right of course, but without a physical presence in NZ, it has proven very difficult to get Apple to honour the CGA.

They have legal representation in NZ, you can lodge a CGA claim against them for Apple.
post #30 of 35
Why limit to 3 years. Why not make it 10! The manufacturer sets warranties based on many factors - not government dictates. When Apple agrees to provide extra coverage, I hope the Australian market is prepared for the additional cost. It seems that Australians complain about the higher costs for products in their market but forget the extra burden put on the product manufacturers. You want longer warranties? No problem. The cost is now $299 more. You had the option in the past but your government is taking that option away and making it a full-time requirement. You pay the freight. Government looks to be the good guy.
post #31 of 35
Quote:
Originally Posted by jfanning View Post


They have legal representation in NZ, you can lodge a CGA claim against them for Apple.

That is an inherently complex, and potentially costly, process; nothing like as simple as walking into the shop where you bought the goods and demanding your rights under the CGA. While of course Apple is supposed to play by NZ's rules, and if you have the time and money you can force them to, it is simply out of reach for many. I sincerely hope that someone has the wherewithal to bring a test case and thus compel Apple to concede that NZ law trumps their APP extended warranties.

post #32 of 35
Quote:
Originally Posted by SteelBlades View Post
 

That is an inherently complex, and potentially costly, process; nothing like as simple as walking into the shop where you bought the goods and demanding your rights under the CGA. While of course Apple is supposed to play by NZ's rules, and if you have the time and money you can force them to, it is simply out of reach for many. I sincerely hope that someone has the wherewithal to bring a test case and thus compel Apple to concede that NZ law trumps their APP extended warranties.

 

Wouldn't it be up to the place of purchase to handle warranty issues on behalf of Apple or other companies that don't have a presence?

 

In Australia we can perform retail swaps of iPhones in phone stores, some other manufacturers have followed Apple's lead in this, otherwise it's off to a repair centre for assessment and repair.

 

As I stated before Vodafone Australia has offered a two year warranty since 2010.

 

Only Apple and Samsung have their own retail stores and the Samsung experience stores send handsets out for repair.

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post #33 of 35
Quote:
Originally Posted by hill60 View Post
 

 

Wouldn't it be up to the place of purchase to handle warranty issues on behalf of Apple or other companies that don't have a presence?

 

In Australia we can perform retail swaps of iPhones in phone stores, some other manufacturers have followed Apple's lead in this, otherwise it's off to a repair centre for assessment and repair.

 

As I stated before Vodafone Australia has offered a two year warranty since 2010.

 

Only Apple and Samsung have their own retail stores and the Samsung experience stores send handsets out for repair.

You're exactly right - it is the place of purchase's responsibility to handle this. I think I mentioned this in my original post. There are two problems with this though. 1) Apple puts huge pressure on sellers to play by 'their' rules. If the seller rocks the boat too much, the loose certain rights to things Apple provides (and ultimately the ability to even sell Apple products). So sellers can be very difficult to persuade to respect the CGA. 2) More and more people are buying directly from Apple via the web, so there is *no* 'place of purchase'. Without Apple having a physical presence here in NZ, we're between a rock and a hard place.

post #34 of 35
Quote:
Originally Posted by SteelBlades View Post

That is an inherently complex, and potentially costly, process; nothing like as simple as walking into the shop where you bought the goods and demanding your rights under the CGA. While of course Apple is supposed to play by NZ's rules, and if you have the time and money you can force them to, it is simply out of reach for many. I sincerely hope that someone has the wherewithal to bring a test case and thus compel Apple to concede that NZ law trumps their APP extended warranties.

Well you can do that, assuming you purchased your Apple device at a store. If you purchased the Apple device via the apple.co.nz online store, and you wish to lodge a CGA claim again them, you would need to do this via their legal representation.

So in saying this, if you are purchasing a non bto Apple item in NZ, you are probably best to purchase it from a reseller.
post #35 of 35

I think that companies should be able to offer different lengths of warranty for different kinds or quality of products. For example a 2013 Mac Pro could come with a 3 year warranty, but a Mac Mini could come with a one year warranty. When jurisdictions pass blanket rules that everything must come with e.g. a 2-year warranty, no matter what, that strikes me as an overly broad/unthinking approach to lawmaking. 

 

Really, if there was no law about minimum guarantees, people would have nothing to go on but the brand name, and that would be to the benefit of companies like Apple. These thousands of no-name Chinese manufacturers would find their sales declining too I suspect.

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