Apple Stung By Mammoth Fine From Italian Watchdog

Apple has been slapped with an eye watering €900,000 (£750,000) fine by an Italian watchdog, which accused the iPad maker of misleading consumers over product guarantees.

The Italian Antitrust Authority said in a press release that the fines resulted from “Apple’s unfair business practices against consumers”.

Product Guarantees

The Antitrust Authority blamed Apple, Apple Sales International, and Apple Retail Italy for the implementation of what it deemed to be two “distinct practices of unfair trade”.

The first problem area concerned Apple’s point of sales (both the Apple Stores and its online apple.com retail presence) for failing to adequately inform consumers of their right to two years free technical support as provided by Italy’s Consumer Code. Apple apparently only offered its one-year standard warranty.

The second issue with Apple concerned its support plan, known as the Applecare Protection Plan. The Antitrust Authority felt that the company’s lack of information about the two-year guarantee, led many customers to pay extra for Apple’s support services.

The watchdog consequently decided to issue a stiff financial penalty of €900,000. It broke this down, saying €400,000 (£333,000) was due to Apple’s failure to recognise the length of the statutory guarantee as set out in Italy’s consumer code. The remaining €500,000 (£417,000) penalty was imposed because of the Applecare Protection Plan.

The watchdog also warned that Apple has to publish an extract from its ruling on its Website. It must also add details of Italy’s two-year guarantee to its Applecare plan within 90 days.

Legal Battles

Although it is likely to appeal, Apple has yet to respond to the issue of the fine, but will have no problem paying it. The company is in the enviable position of having at least $81 billion (£52bn) in cash sitting in the bank, thanks to its sales successes over the past decadewith its iPod, iPhone, and iPads.

Of late, Apple’s sales success has been attracting more and more probes by industry regulators and watchdogs. For example the EC has recently launched a probe to investigate whether Apple, along with five international publishers, have struck deals to fix the prices of e-books in Europe.

The company has also been waging a legal patent campaign against its competitors, most notably Samsung. So far, Apple has enjoyed considerable success against Samsung in many countries, although it has also had a number of setbacks.