Fair Trade Commission (FTC) gave corrective recommendation to Apple’s ‘Unfair After Service (AS)’ clause that did not allow customers to retrieve their iPhones during repair. It seems that customers’ inconvenience will be temporarily solved as Apple will prepare and implement improvement policy by September. It is said that solution to fundamental problems that will solve customers’ inconvenience will be possible if Apple’s directly controlled sales store and repair store called ‘Apple Store’ is installed in Korea.
After evaluating 6 iPhone repair companies’ clauses, FTC told them on the 30th to modify their clause that restricts cancellation of customers’ repair contract and clause that forces maximum cost of advance payment.
Apple’s official service centers such as Ubase, Dongbu Daewoo Electronics Service, Peach Valley, Beyondtech, Tuva, and Jongro Mac System did not allow customers to retrieve their products before repairs were done. Once customers entrust their products with them, customers lose their ownerships and can only receive their products back once they pay repair cost after it is all done.
FTC decided that 6 repair companies’ clauses were not fair based on a civil law that allows consumers to cancel contracts before companies finish work by compensating for damages that were done. It is saying that these companies restricted rights of rescission and rights of claim to restore to original state by making a regulation that does not allow customers to make a claim to receive their products back and restricting customers to cancel their contracts even before repair finishes.
6 repair companies made contracts while breakdown of repairs and repair costs were not finalized and received advanced payments for whole replacement from customers. It is a type where they will refund the difference from advanced payments if it is decided that it will be partial replacement after diagnosis. FTC gave corrective recommendation based on civil law that says in making contracts, repair cost needs to be finalized at the same time as transfer of finalized object back to customers.
Section Chief Min Hye Young of FTC’s Clause Examination said that it is planning to finish its cooperation with corrective measure of corresponding clauses from repair businesses and Apple Korea within 60 days. She also said that FTC can give out corrective order if they do not follow corrective advice based on lawful reasons.
If clause improves, it is expected that customers’ convenience level will increase by one level. However it is said that Apple needs to provide same services, which they provide to advanced markets, in Korea to solve fundamental problems. Apple is managing Apple Stores that directly controls sales and repairs in the U.S. and Europe.
Industry thinks that it will not have any significant effects on output in Korea even if iPhone AS becomes convenient.
Vice-President Chang JoongHyuk of Atlas Research said that because Apple has customers with high level of loyalty, it shows consistent output regardless of AS. Even if AS becomes convenient, output will not increase much.
Staff Reporter Kim, Yongjoo | kyj@etnews.com& Staff Reporter Yoo, Seonil | ysi@etnews.com