Portuguese consumer group to sue Apple over AppleCare
The Portuguese Association for Consumer Protection (DECO) announced intentions to move forward with a lawsuit against Apple over information provided on the company's website which allegedly misleads buyers into purchasing the add-on AppleCare Protection Plan.
In a statement issued early Wednesday, first reported by Portuguese language Apple blog iPhoneTuga, the non-profit DECO claimed the potential suit comes after "several attempts" to correct allegedly deceptive wording on the iPhone maker's website pertaining to the for-pay AppleCare Protection Plan.
The grievance is similar to a separate set of circumstances in Italy where Apple was fined some $1.2 million for "unfair consumer practices." In that case the Italian Antitrust Authority claimed Apple did not provide "clear information to customers on product assistance," or more specifically did not inform consumers of the gratis two-year warranty that comes with every product. While the standard Apple warranty is limited to one year, local regulations in that region require manufacturers to furnish two years of free service.
DECO notes that Portuguese law is similar to Italy's as product defects are covered for a mandatory two years, a regulation Apple must follow if it seeks to sell products in the country. While the two countries' laws reach an identical goal in practice, the implementation is slightly different in the case of Portugal and is likely the issue's root cause.
Portuguese law presumes that a defect found within two years after a product is purchased was also present at time of delivery. This is counter to Apple's reportedly misleading claim that its warranty only applies to defects found at the time of delivery, a statement which seemingly suggests coverage does not extend beyond that point. In reality the product is protected for the required period and customers can choose to purchase AppleCare for an additional fee. The organization feels that this fact is not presented to consumers in a clear manner, falsely inflating the importance of the extended warranty.
A rough translation of the statement issued by DECO's Secretary General Jorge Morgado:
In a statement issued early Wednesday, first reported by Portuguese language Apple blog iPhoneTuga, the non-profit DECO claimed the potential suit comes after "several attempts" to correct allegedly deceptive wording on the iPhone maker's website pertaining to the for-pay AppleCare Protection Plan.
The grievance is similar to a separate set of circumstances in Italy where Apple was fined some $1.2 million for "unfair consumer practices." In that case the Italian Antitrust Authority claimed Apple did not provide "clear information to customers on product assistance," or more specifically did not inform consumers of the gratis two-year warranty that comes with every product. While the standard Apple warranty is limited to one year, local regulations in that region require manufacturers to furnish two years of free service.
DECO notes that Portuguese law is similar to Italy's as product defects are covered for a mandatory two years, a regulation Apple must follow if it seeks to sell products in the country. While the two countries' laws reach an identical goal in practice, the implementation is slightly different in the case of Portugal and is likely the issue's root cause.
Portuguese law presumes that a defect found within two years after a product is purchased was also present at time of delivery. This is counter to Apple's reportedly misleading claim that its warranty only applies to defects found at the time of delivery, a statement which seemingly suggests coverage does not extend beyond that point. In reality the product is protected for the required period and customers can choose to purchase AppleCare for an additional fee. The organization feels that this fact is not presented to consumers in a clear manner, falsely inflating the importance of the extended warranty.
A rough translation of the statement issued by DECO's Secretary General Jorge Morgado:
It is unclear what damages if any DECO is seeking though a lawsuit is the group's only recourse as it is not a government body and thus cannot levy fines. Apple has not commented on the matter.
"The Portuguese and EU law gives a two-year guarantee for portables [and laptops], but Apple does not recognize this reality. After several attempts to enforce these rights, without success, we decided to proceed with legal action. We will require the court to restore legality because we have no doubt that the rights of consumers are being trampled."
Comments
This will become more common once consumer groups set their focus on Apple. I know our local (NZ) consumer agencies need to stand up. Numerous computer suppliers offer extended warranties, of which are not required, because regardless of the official warrantee, our local Consumer Guarantees Act states that an item must be durable and fit for purpose.
The hard view on computers is
How long can I expect my goods to last?
If you have a computer and the warranty is for one year, that doesn’t mean that you expect a new computer to only last one year. It is reasonable to expect that a new computer would last at least five years.
But, because its harder for an individual to enforce the Act, a lot of people will pay for their own goods, especially when dealing with foreign support services, which Apple provides here
First of all a correction, the actual name of the gentleman is Jorge Morgado, not George Morgad.
Second, it's a fair question. On the Apple's US and PT websites it stated that "For up to three years from your computer's original purchase date, the AppleCare Protection Plan" so... in the US it's the standard 1 year + 2 more. So you are buying two more years. On EU every product has 2 years of warranty so you are buying 1 more year it seams clear.
But the thing is that APPLE, in many cases, is giving only one year warranty. Resellers like WORTEN, are even putting up signs saying that "in the case of any warranty issues with Apple products, those will be handled by Apple itself"-
So there are many grey areas. APPLE is not giving 2years of warranty, and the stores don't want to be liable, if APPLE is not by their side.
If these sorts of writings can indeed lead to class action type law suits or even nations suing then I would have thought the PC industry was in far worse shape than Apple in the long run. Not too many consumer level PCs are still working fine after five years. That said it mostly due to Microsoft not due to hardware so I'm not sure of the NZ authorities treat that differently.
I would agree it is confusing.
Question: Does Apple make a profit on Applecare? If they do, I would question the ethics of it. It would be fair enough for the scheme to cover its costs, but it should be a service to customers rather than a source of profit.
Wrong thread.
I think one time this 2 vs 1 year warranty problem should be solved on European Community, and not country-by-country level. Some EU institution should force Apple to operate according the law in the region. Selling this highly priced and "phenomenal" products Apple should make ensure its customers that Apple itself believes the products it produces can be problems free for at least 2 or 3 years worldwide.
Many products in EU have 3, and some even 5 years warranty by default.
Quote:
Originally Posted by allblue
Question: Does Apple make a profit on Applecare? If they do, I would question the ethics of it. It would be fair enough for the scheme to cover its costs, but it should be a service to customers rather than a source of profit.
All extended warranties are meant to be huge profit makers for the companies that sell them. That's why many companies like Best Buy and others push their employees to sell the warranties to customers. It's insurance, you don't expect insurance companies to be non-profit do you?
Quote:
Originally Posted by nonnu
First of all a correction, the actual name of the gentleman is Jorge Morgado, not George Morgad.
Second, it's a fair question. On the Apple's US and PT websites it stated that "For up to three years from your computer's original purchase date, the AppleCare Protection Plan" so... in the US it's the standard 1 year + 2 more. So you are buying two more years. On EU every product has 2 years of warranty so you are buying 1 more year it seams clear.
But the thing is that APPLE, in many cases, is giving only one year warranty. Resellers like WORTEN, are even putting up signs saying that "in the case of any warranty issues with Apple products, those will be handled by Apple itself"-
So there are many grey areas. APPLE is not giving 2years of warranty, and the stores don't want to be liable, if APPLE is not by their side.
Apparently it's not as open and shut as you make it out to be, or as I thought it was after the Italian verdict. I was at the Apple Store in Dresden, Germany and chatted with a couple of the Genius Bar employees while they were trying to replace my defective factory unlocked iPhone 4s originally purchased in America (for anyone whose in that same situation they can't, must be replaced in North America...nonsense). They said that the way the EU law reads and the German government has interpreted the second year only requires the manufacturer to replace products with flaws that existed at the time of delivery (not found at the time of delivery like the article says). However at least in Germany it is not accepted that any flaw within 2 years must have been present at delivery. The guys at the Genius Bar often have to go through this with people because they have some problem that developed with use after the first year but it isn't actually covered anymore. So, there is something to be said for selling the AppleCare for the 2nd and 3rd years.
Some EU countries apparently have more consumer friendly interpretations of the law that do require 2 years of complete warranty, but it isn't a EU wide policy for 2 years of complete manufacturers warranty.
Quote:
Originally Posted by allblue
Question: Does Apple make a profit on Applecare? If they do, I would question the ethics of it. It would be fair enough for the scheme to cover its costs, but it should be a service to customers rather than a source of profit.
It they didn't make a profit, and just cover costs, you would probably find that third-party warranty companies would complain of anti-competitive behaviour.
Apple certainly do make a profit, why else would their warranty be more expensive than alternatives (and they have access to cheap spares)
Quote:
Originally Posted by GregInPrague
All extended warranties are meant to be huge profit makers for the companies that sell them. That's why many companies like Best Buy and others push their employees to sell the warranties to customers. It's insurance, you don't expect insurance companies to be non-profit do you?
That's not the right comparison though. Apple is not an insurance company, they make consumer products which should work. If they don't work, it is their responsibility to redress their failing. If they make profit on selling additional warranty, there is a potential conflict of interest in that people will only purchase it if they believe there is a good chance the product will fail, otherwise why incur the extra expense. Apple will have a very good idea of the failure rate of their products and so could price the extra warranty accurately to cover that without looking to make a profit on it. So an extended warranty should be a customer service, not a backdoor profit steam in my view.
For the record, I have never purchased Applecare, which has been a good thing because all of the Apple products I've bought have lasted well beyond the three year period anyway, so I have only good personal experience of Apple's quality control.
Brazil is as crazy pro-consumer as the US is crazy pro-business when it comes to consumer protection. Something in the middle is probably rational.
the eu members collectively agree a 'directive', but each member government is responsible for implementing the directive by enacting local legislation, which will be based on *their* interpretation of it
depending on political persuasion, that local legislation can vary quite remarkably from country to country
it's stupid, but, aside from the local politics, there's huge variation in the members' legal systems, and of course no government is willing to do the logical thing - harmonise - because suddenly we'd need far fewer politicians, civil servants, lawyers etc. and they'd see their power diminish, which won't happen: politicians are in it for power, they crave it above all else
people whine about how the eu did xyz, and local politicians will go rabble rousing whenever they see a chance to win a few votes or keep their snouts in the trough a bit longer, but the eu did nothing of the sort, it was the locals every time
Quote:
Originally Posted by allblue
Quote:
Originally Posted by GregInPrague
All extended warranties are meant to be huge profit makers for the companies that sell them. That's why many companies like Best Buy and others push their employees to sell the warranties to customers. It's insurance, you don't expect insurance companies to be non-profit do you?
That's not the right comparison though. Apple is not an insurance company, they make consumer products which should work. If they don't work, it is their responsibility to redress their failing. If they make profit on selling additional warranty, there is a potential conflict of interest in that people will only purchase it if they believe there is a good chance the product will fail, otherwise why incur the extra expense. Apple will have a very good idea of the failure rate of their products and so could price the extra warranty accurately to cover that without looking to make a profit on it. So an extended warranty should be a customer service, not a backdoor profit steam in my view.
For the record, I have never purchased Applecare, which has been a good thing because all of the Apple products I've bought have lasted well beyond the three year period anyway, so I have only good personal experience of Apple's quality control.
I'm sure that Apple makes a fortune on Applecare.
I've generally found it useful on 1st generation products (e.g., the new retina MBP) where Apple tends to have relatively large issues, and worthless by the 3rd generation of a product where Apple has ironed out most of the bugs.
I dont get it, they are sueing on the word used on the Apple care box (which is retarded imo)?
or
are they sueing because Apple do not honor the free second year warranty (which makes more sense) ?
Your analysis is incorrect.
AppleCare covers more than warranty items. If you have non-warranty damage to your phone during the first 2 years, AppleCare would cover it, but the warranty wouldn't - so you ARE getting more services during the entire 3 years for your money. Plus, Apple care offers services beyond repair of the product. AppleCare offers technical support and software support that are not covered by the warranty - so it's not like you're paying for nothing.
Now, granted, you're getting less in places where the warranty is 2 years than in the US, but if they didn't have to offer a 2 year warranty, AppleCare would probably cost more.
The only wild card is the bizarre Portuguese interpretation that any defect which occurs during the first 2 years must have been present at delivery. So if I drop my phone in the toilet or run over it with a car, that's a warranty expense?
Quote:
Originally Posted by jukes
I'm sure that Apple makes a fortune on Applecare.
I've generally found it useful on 1st generation products (e.g., the new retina MBP) where Apple tends to have relatively large issues, and worthless by the 3rd generation of a product where Apple has ironed out most of the bugs.
Since my 27" imac is in its third year, the hard drive and the graphic card both broke. I am pretty glad I took the Apple care because botth repairs would had cost 600$. I always take the apple care, but here in canada the mandadory warranty is 1 year. Note that the problems occured in the 3rd year, so a 2 year warranty would not had helped.
I also had a MBP break, in that case they had to replace the unit. With the new retina MBP being almost unrepairable, I sure hope people are taking Apple care on it. The new MBP is divided into costly modules for repairs :for example, if the webcamp breaks, they will need to replace the entire screen for 700$.
Quote:
Originally Posted by jragosta
The only wild card is the bizarre Portuguese interpretation that any defect which occurs during the first 2 years must have been present at delivery. So if I drop my phone in the toilet or run over it with a car, that's a warranty expense?
No. Dropping on toilet or something like that is considered misapplication. The Portuguese law states that anything that breaks through normal use (and should be working normally) must be fixed or replaced with no cost to the consumer. Just that.
Not really. How it works in England is that a product which does not last for a reasonable period of time is considered not of merchantable quality. The length of time is readily determined by small claims courts and two years is slightly less than the average upheld claim for consumer electronics. Consumer durables average about three years and so on. The EU has codified this in a directive which is still beneficial to manufacturers compared to court judgments, consumers can always try their hand at small claims court.
If the item has been abused it is not covered, only if it has been used as one may reasonably expect, the expectations of course mostly being set by the manufacturers and retailers claims for the product.
Another, bigger, difference with US law is that the contract is between the retailer and the customer, this makes the retailer responsible for everything and to my mind rightly so. The retailer can not tell the customer to take it up with the manufacturer, the retailer has a duty to ensure goods sold are of merchantable quality ie will do what they are advertised to do and last the time they should reasonable be expected. Retailers have to know more about the products they sell which means they can also better advise customers. The lemon in the batch, which is a manufacturing default even if it doesn't reveal for 23 months, is not the responsibility of the customer to fix. This doesn't stop retailers offering one year guarantees and trying to deny customers with substandard goods due service/recompense, some standing of ground is called for and usually the need to see the store manager. Guarantees usually carry the disclaimer "this does not affect your statutory rights" because the statutory rights often offer better protection than the guarantee.
Retailers clearly have redress with suppliers according to their contracts with them, terms of those contracts can vary but the contract between retailer and consumer have narrower legal requirements.
Apple are usually pretty good with out of warranty repairs so I don't understand why they can't stick to the law although I think some of it is a cultural difference with a misunderstanding of the role of a retailer. This issue has only arisen since Apple has had its own stores, third party resellers always have had to abide by the requirements of merchantable quality and the contract with the customer. I was amazed to find what poor service American consumers get, three months warranties and the retailer accepting no responsibility for what they sell and profit from.
Quote:
Originally Posted by AppleInsider
Portuguese law presumes that a defect found within two years after a product is purchased was also present at time of delivery. This is counter to Apple's reportedly misleading claim that its warranty only applies to defects found at the time of delivery, a statement which seemingly suggests coverage does not extend beyond that point.
Since when does "reportedly misleading claim" = "Blatant falsehood"?