Apple to Pay $6.7 million Fine after Error 53 Lawsuit

Major smartphone maker Apple Inc. has been ordered by the Australian court to pay for bricking several iPhone and iPad devices that were previously repaired by third parties.

Determining Apple’s actions went against the consumer law, the Federal Court of Australia, which announced its decision on Tuesday, fined the US tech giant A$9 million ($6.7 million) for its alleged use of a software update, known as Error 53, to render hundreds of iPhones and iPads inoperable.      

The move came after the Australian Competition and Consumer Commission (ACCC) took action in 2017 over the company’s refusal to provide 275 users the support they needed to fix the problem, as their devices had received third-party repairs.

Apple admitted that from February 2015 to February 2016, it has misled those customers seeking compensation for their bricked devices.  

Australia’s watchdog argued that customers and buyers are eligible to have the screens and other fixes done by non-Apple repairers as long as it does not cause any damage to the underlying system of the phone.

Apple offered to compensate the customers affected by the software update, following ACCC’s investigation and so far, it had contacted 5,000 customers, according to ACCC.

ACCC added that the iPhone-maker will also seek to improve staff training, information about warranties, and consumer law on its website, as well as procedures to guarantee compliance.

Shares of Apple were down 2.10 percent to $184.78 on Tuesday.

Error 53 Leaves Apple Devices Inoperable

Error 53 was first reported in 2016, when a number of iPhones and iPads stopped working due to a firmware update to the iOS 9, which unintentionally consisted of a security measure designed to confirm that the phone’s fingerprint scanner was working just fine before it left the factory.

The company explained that the error was the result of the device failing the Touch ID security check, which happens when a user had the Home button replaced by a third party.                 

Customers affected were then told by Apple that they had to pay to fix the problem that occurred on their devices following the update.

ACCC Commissioner Sarah Court said the mere fact that an iPhone or iPad had been restored by someone other than Apple did not, and could not, result in the consumer guarantees ceasing to apply.

Apple then released an iOS 9.2.1 update in February to resolve the problem, although it did not reactivate the Touch ID module and customers complained they still lost photos, documents, and applications.

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