Samsung And Apple Were Fined For 'Planned Obsolescence'

Author:Mr Barış Yüksel LL.M., Mustafa Ayna and Gökçe Kuranel LL.M.

Italian Competition Authority, Autorità Garante Della Concorrenza E Del Mercato ("AGCM"), has fined Apple and Samsung1 on 24 October 2018 due to "planned obsolescence" of their smartphones as they have been slowing down their old phones over the time by implementing inappropriate software and thus, promoting sales of new products.

AGCM initiated an investigation concerning particular smartphone software updates that have a negative influence on smartphones in January.2 Apple and Samsung were accused of releasing software updates which slow down their old smartphones and consequently stimulating the purchase of brand new smartphones.3 The Italian executives stated that Apple and Samsung have induced unfair commercial practices and such practices expedited replacement of phones. It was indicated that neither Samsung nor Apple have provided information regarding the novelty of the implemented new software or any means of restoring the original functionality of the products.4 In this regard, the competition agency discussed that while the companies were offering to download new operating systems, they have never warned their customers in relation to the decrease of performance of phones and did not leave an option for their customers to set their phones back to its previous status.5

AGCM determined that Samsung insistently suggested its Galaxy Note 4 owners to install a new version of Google's Android operating system designed for Galaxy Note 7 and Apple insistently suggested its Iphone 6 users to install an operating system tailored for Iphone 7 without informing them about the malfunctions that might arise as a consequence of installing such operating systems. As new operating systems were not compatible with the old phones' systems, they decelerated them and caused problems.6

As a consequence of the investigation of AGCM, each of the companies was fined for €5m due to slowing their phones and AGCM ruled that both of the companies are obliged to publish a notice regarding the Authority's decision in order to give information to their customers on their Italian websites.7 The fines are the maximum amount of fines allowed by the law.8

Apple also was fined for an additional5m as it did not provide sufficient information to its customers in relation to "essential characteristics of lithium batteries".9 In December 2017, Apple confirmed that it has been slowing down old Iphones intentionally in order to prevent problems arising from ageing...

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