Apple Hit with $12 Million Fine over iPhone Waterproof Claim as European Penalties Top $1.36 Billion in 2020

Apple has been fined in the region of $12 million (€10 million) by Italy's competition regulator, Autorità Garante della Concorrenza e del Mercato (AGCM), which said the company made false claims about the waterproof capability of its iPhones, Business Insider reported.

The latest incident brings the company's total fines in 2020 to more than $1.36 billion (€1.14 billion), with two others issued by French authorities earlier this year, including a $1.3 billion (€1.1 billion) fine in March and $29.9 million (€25 million) fine in February.

AGCM said Apple misled the public in its promotional materials, which reportedly claimed various iPhones, ranging from the iPhone 8 through the iPhone 11, were water resistant at a depth of between one and three meters (three and 13 feet) for up to 30 minutes, depending on the model.

AGCM noted the company's water resistant claim was only true in controlled laboratory settings in completely still and pure water, while it wasn't the case in other situations where consumers might drop their phones in water.

The regulator also claimed Apple misled the public about the company's warranty, as the terms were not valid for phones damaged by liquids. AGCM said Apple failed to repair iPhones that had been damaged by water.

Apple declined to comment when contacted by Newsweek.

According to the Apple website: "iPhone 12, iPhone 12 mini, iPhone 12 Pro, iPhone 12 Pro Max, iPhone SE (2nd generation), iPhone 11, iPhone 11 Pro, iPhone 11 Pro Max, iPhone XS, iPhone XS Max, and iPhone XR are resistant to accidental spills from common liquids, such as soda, beer, coffee, tea, and juice.

"Liquid damage is not covered under warranty, but you might have rights under consumer law.

"For consumers, who are covered by consumer protection laws or regulations in their country of purchase, the benefits conferred by Apple's Limited Warranty are in addition to all rights and remedies conveyed by such consumer protection laws and regulations, including but not limited to these additional rights," the company states.

The iPhones listed below "are splash, water, and dust resistant and were tested under controlled laboratory conditions," with varying levels of maximum depths and time limits, according to the Apple website.

  • iPhone 12
  • iPhone 12 mini
  • iPhone 12 Pro
  • iPhone 12 Pro Max
  • iPhone SE (2nd generation)
  • iPhone 11
  • iPhone 11 Pro
  • iPhone 11 Pro Max
  • iPhone XS
  • iPhone XS Max
  • iPhone XR
  • iPhone X
  • iPhone 8
  • iPhone 8 Plus
  • iPhone 7
  • iPhone 7 Plus

The latest incident marks the third time Apple has been fined this year.

Back in March, the French Competition Authority ordered the company to pay around $1.3 billion (€1.1 billion) for anti-competition practices.

Tech Data and Ingram Micro, two of Apple's wholesalers, were also fined at the time. Tech Data received a fine of about $91.2 million (€76.1 million), while Ingram Micro was fined around $75.3 million (€62.9 million).

In a statement issued on March 24, Tech Data said that the French Competition Authority's decision concerned "alleged anticompetitive vertical agreements between Apple and its wholesalers regarding volume allocations of Apple products."

The collective fine issued against Apple, Tech Data and Ingram Micro, which amounted to around $1.4 billion (€1.2 billion), was the largest ever handed down in one case, according to the authority.

"Apple and its two wholesalers agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products," Isabelle de Silva, president of the French Competition Authority, said at the time.

A spokesperson for Apple told CNBC at the time: "The French Competition Authority's decision is disheartening. It relates to practices from over a decade ago and discards 30 years of legal precedent that all companies in France rely on with an order that will cause chaos for companies across all industries. We strongly disagree with them and plan to appeal."

Back in February, Apple was fined around $29.9 million (€25 million) by French authorities for slowing down its phones without warning customers.

France's competition and fraud watchdog DGCCRF noted iPhone owners "were not informed that installing iOS updates (10.2.1 and 11.2) could slow down their devices."

Apple agreed to pay the fine and was required to display a notice on its French-language website for a month, which said "committed the crime of deceptive commercial practice by omission."

In 2017, Apple admitted it did slow down some phones to "prolong the life" of the devices but claimed the move was not an attempt to encourage users to upgrade their phones.

The act was confirmed after a customer shared performance tests on the Reddit online forum, which suggested their iPhone 6S considerably slowed down with time yet suddenly operated faster after the battery was replaced.

The lithium-ion batteries in the iPhones were claimed to become less able to meet peak demands with time, which could see the phones shutting down abruptly in an attempt to protect its components, Apple noted at the time.

The company's release of a software update for the iPhone 6, iPhone 6s and iPhone SE at the time "smoothed out" battery performance, Apple claimed.

Correction 12/2/2020: This article was updated to state that in March, Apple and its wholesalers were fined for alleged anti-competitive vertical agreements regarding volume allocations of Apple products, not for agreeing on prices as the FCA's original English-language news release had incorrectly stated.

Apple store Milan Italy
The Apple store opening in Milan at Piazza Liberty on July 26, 2018 in Milan, Italy. Apple was fined around $12 million (€10 million) by Italy’s competition regulator, which said the company made false claims about the waterproof capability of its iPhones. Photo by Stefania M. D'Alessandro/Getty Images