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2 Apr, 2013

Apple to face enhanced legal supervision in China

By Lu Hui (Xinhua)

BEIJING, April 1 (Xinhuanet) — China’s commerce market watchdogs have called for tightened supervision of Apple Inc’s disputed warranty policy in response to customers’ complaints that the iPhone-maker adopted differential policies for repair and return services in China.

The State Administration for Industry and Commerce said it has issued a notice asking local industry and commerce authorities to enhance legal supervision over Apple’s imparity clauses in its warranty policies.

The China Consumer’s Association (CCA) has asked Apple Inc. to “sincerely apologize to Chinese consumers” and “thoroughly correct its problems.”

In a statement on the CCA’s website, Apple was told to equalize the warranty periods in China with other countries. Apple should inform consumers if refurbished parts are used when repairing broken devices, and repair costs should be counted accordingly, the statement said.

Apple products have gained huge popularity in China over recent years with China being the second largest market after the U.S. However, there are growing concerns that Apple has discriminatory after-sales service in China compared to the rest of the world.

In a special program to mark the International Day for Protecting Consumers’ Rights on March 15, China Central Television (CCTV) accused Apple of offering shorter warranty periods in China compared with other countries and using refurbished parts for repair and averting after-sale obligations.

Consumers who asked for replacement of iPhones due to quality defects during the warranty period always found that their renewed iPhones still kept the old back cover, the program said.

In addition, the guarantee period was not extended to another year as stipulated in China’s after-sale regulation but remained the same as with the former unit. Under Chinese law, replaced mobile phones should be covered by another one-year guarantee period after the replacement.

The CCA has unveiled a report detailing that complaints about after-sale service account for 25.6 percent of the total 2,170 complaints it has received about Apple products, 7 percentage points higher than the averaged data for the home appliance sector.

The global tech giant took little action to address waves of criticism. Apple released only a 200-character statement saying it is dedicated to making first-class products and attaches high importance to every consumer’s ideas — a “typical official reply full of empty talk.”

Analysts attributed Apple’s unparalleled arrogance to its technical predominance and aggressive marketing strategy. Its innovative products have attracted a large number of fashion-savvy fans in China, who will scramble for any new gadgets coming out.

Su Haopeng, a law professor with the University of International Business and Economics, said it is the company’s social responsibility to respect consumer rights and it should not abuse its market predominance to hurt their interests. “Apple Inc.’s unfair and unreasonable rules have infringed consumer’s legitimate rights,” he said.

Many others pointed out that China should limit the entry of products with incomplete after-sale system.

Customers hope that more home-grown brands can be developed to parallel with Apple products so that more choices are available and Apple’s dominance fades away. In the meantime, customers call on the CCA to conduct forceful negotiations with the iphone maker on behalf of consumers.

A commentary run by People’s Daily said that integrity is the most rudimentary commercial morality and serves the bottom line for an enterprise’s survival and development. Any company, no matter how great its popularity is, can not bypass this principle.

It remains to be seen whether this global tech giant will be pressurized to respond to the complaints, as China market becomes an ever-bigger part of its global operation.

Apple sales in China increased by 67 perent in the first financial quarter of 2013. The company’s annual income growth in China, including Hong Kong and Taiwan areas, is more than twice that of Japan, and also exceeds the U.S. and Europe.