Italy: Apple fined €10 mn for misleading customers over water-resistance claims

Italy's antitrust regulator, the Autorità Garante della Concorrenza e del Mercato (AGCM), announced on Monday that they had imposed a €10 million fine on Apple Distribution International and Apple Italia Srl (collectively Apple hereafter) on two distinct counts for misleading consumers using unfair commercial practices. The AGCM had begun investing complaints in December 2019. This is not the first time that Apple has fallen foul of the AGCM as 2018 saw Apple being fined €10 million for the planned obsolesence of its smartphones after multiple complaints of iPhone batteries slowing down when new iPhones are released came to light.

The first count is regarding Apple's promotional messages for their iPhone models, namely the iPhone 8, iPhone 8 Plus, iPhone XR, iPhone XS, iPhone XS Max, iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max. Apple had advertised these products as water-resistant for a maximum depth of between 1 and 4 meters for up to 30 minutes, with each factor's specific value depending on the model. These claims were broadcast through television commercials in addition to social media; they were also hosted on Apple's Italian website. The AGCM contends that Apple's messages did not elucidate that this feature was found in the presence of specific conditions such as during controlled laboratory tests that used static and pure water, and not in normal conditions of consumer usage of these devices. Consequently, the AGCM asserted that Apple misled consumers by going overboard when promoting their aforementioned products' water-resistance capabilities. The exact wordings of Apple's claims surrounding water-resistance can be learned only by visiting Apple's website and perusing its IP (Ingress Protection) rating information.

The second count is regarding the AGCM deeming it inappropriate for Apple to not provide warranty assistance when the aforementioned iPhone models suffer damage due to water or other liquids. The AGCM asserted that this hinders the rights given to consumers by law. The AGCM took strife with an Apple disclaimer, which stated, "The guarantee does not cover damage caused by liquids." Through this, Apple could refuse to service iPhones that were damaged by liquids. The AGCM contends that the disclaimer failed to specify if this was a legal guarantee and did not properly clarify and explain the limitations of Apple's claims of water resistance.

Essentially, the AGCM fined Apple for misleading consumers by aggressively marketing water resistance as a selling feature of the aforementioned iPhone models without proper clarification, only to then, not service customers should their iPhones suffer liquid damage because it is not covered under Apple's warranty. It will be interesting to see if competition watchdogs in other countries follow suit. Cases like this are likely to push phone companies to include detailed and accessible explainers on their products' water-resistance in addition to displaying accurate real-world information while advertising.

Apple is yet to provide a comment on this.