Apple loses first round of appeal against Italian fine for unnecessary warranties

Final ruling expected in May

A Rome court has upheld a €900,000 (US$1.2 million) fine imposed on Apple last December by Italy's Antitrust Authority for circumventing consumer protection laws, Italian media reported Friday.

The Regional Administrative Tribunal (TAR) of Lazio rejected Apple's appeal that the fine be suspended pending a ruling on the merits of the question slated for May 9.

The Antitrust Authority imposed the fine on Apple Sales International, Apple Italia Srl and Apple Sales Retail for not providing enough information about guarantees afforded by the Italian Consumer Code and for giving misleading

information in order to sell more AppleCare packages.

The court did, however, order the suspension of the Antitrust Authority's order that Apple modify its publicity and packaging in relation to the AppleCare Protection Plan, accepting the company's argument that if the order was overturned by the court in May the obligatory modifications would cause "grave and irreparable" harm to Apple.

The campaign to force Apple to modify its behavior in Italy has been spearheaded by the Milan-based Altroconsumo consumer association. The consumer organization pointed out that Italian and European Union regulations give

consumers the right to a 24-month warranty from the vendor, while Apple refused to honor the guarantee for the second year and sometimes created difficulties even in respect to the first year's guarantee.

"According to the rules, after the sixth month the consumer must show that he didn't make an inappropriate use of the product. Apple follows this clause very rigidly and sometimes even asks for a technical report on the issue, at the

consumer's expense," Altroconsumo's spokesman for institutional relations, Marco Pierani, said Monday.

Pierani's remarks coincided with the launch by the Bureau Européen des Unions de Consommateurs (BEUC) of an 11-nation campaign "for an immediate halt to misleading practices by Apple in relation to consumers' product guarantee

rights."

Consumer organizations in Italy, Belgium, Portugal, Luxembourg, Germany, the Netherlands, Denmark, Poland, Spain, Slovenia and Greece are writing to their national authorities and Apple as part of the BEUC-coordinated campaign.

John Phelan, a spokesman for Brussels-based BEUC, said other technology companies may well be violating E.U. warranty rules but the campaign was focusing on Apple as the market leader.

"Apple is the global leader and sets the benchmark for behavior, so for the moment we are concentrating on this case," Phelan said in a telephone interview.

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