Apple Inc (NASDAQ:AAPL) has been under fire from several directions over antitrust allegations as well as customer-service issues overseas, and athe latest case involves the company’s two -year protection plan that it sells to Apple iDevice buyers in its Apple retail stores in Italy.
An Italian regulatory unit, which has already imposed fines against Apple Inc (NASDAQ:AAPL) for the very same issue, has been eyeing Apple Inc (NASDAQ:AAPL) for violating EU regulations which require that companies offer two years of warranty protection for free instead of the usual one-year agreement with the purchase of devices. Apple Inc (NASDAQ:AAPL) had been selling its two-year AppleCare Protection Plan – which according to Apple Inc (AAPL) is broader and more comprehensive than what the EU requires and thus is considered a different plan.
However, rather than fight the nuances of the plan as being in compliance with regulations, Apple Inc (NASDAQ:AAPL) decided this week to stop selling the expanded coverage in the Apple Stores in Italy, and is not supplying the coverage to Apple resellers in the country. However, the company is still making the coverage available through its online store and on its Web site, and is promoting the product as an enhancement to the two-year basic coverage that is already provided. Apple Inc (AAPL) was charged with selling the coverage to customers without notifying customers that they were entitled to a basic two-year coverage agreement free of charge.
AGCM, which is the antitrust unit in Italy, already passed out a fine of nearly 1 million euros to Apple Inc (NASDAQ:AAPL) for doing a similar antitrust move in the recent past. At this point, Apple (AAPL) has no comment on the current investigation or on its decision to pull the plan from the country, but AGCM has said that talks between the two are ongoing, and that the agency would probably render some decision in a month. Those who have followed Apple know that these regulatory run-ins have been common in Europe, so will Apple learn its lesson? Is this something new to affect investors in Apple Inc (AAPL), like billionaire fund manager Dan Loeb of Third Point? Why does Apple continue to get in trouble with the EU over the same things? Is there something mroe to this than just a warranty agreement? Does this type of incident affect your perspective on the company’s customer-service reputation?