On September 25th, 2018 the Italian Competition Authority (‘ICA’, i.e. Autorità Garante della Concorrenza e del Mercato, ‘AGCM’) imposed a fine of respectively 10 and 5 million Euro to Apple and Samsung for carrying out unfair commercial practices in violation of the Consumer Code (Legislative Decree no. 206 of 6 September 2005). Said practices consisted of the release of updates of the firmware installed on Apple and Samsung smartphones which irreversibly undermined the functioning and the performances of the latter, in a way to urge consumers towards replacement of the products (so called planned obsolescence).
The ICA decision focused on many aspects of the commercial behavior of Samsung and Apple. The ICA found the repeated delivery of warnings for the installation of the updates to be aggressive, so as to negatively affect consumers. According to the ICA, once an upgrade of the firmware was released, consumers had to take on a regular basis positive steps to delay the download of the updates.
The upgrades released have given rise to a variety of malfunctioning including unexpected shutdowns, slowdowns and battery deterioration. Even if the installation of new or upgraded software on older phones may naturally have an impact on the hardware and thus affect the performance of a device, traders must provide consumers with appropriate information of such negative effects.
According to the ICA, against this background traders have to determine which models of a given device are compatible with a new firmware version but also ascertain its impact on the functioning of older devices.
Furthermore, in the view of the ICA, a balance is needed between the interest in the safety of the devices and the consumers’ expectation to enjoy the same functionalities available at the time of the purchase. Since firmware upgrades do not necessarily result in benefits for the functioning of older products, it is up to traders to inform consumers of such possible risks. In addition to that, traders have to determine which hardware settings best fit with the upgrade, in order to minimize its impact and leave consumers actually free to choose whether to install it.
Last, the ICA also took into account another critical feature of Apple and Samsung conducts, namely the replacement policy applicable to the devices in question. The ICA found that consumers’ claims and requests of assistance reached their peak once firmware upgrades were released, often at the expiration of the two year-warranty. Such coincidence was found suspicious, as Apple and Samsung provided repairing services at significant costs, so that consumers may find more convenient to replace the device rather than to repair the same.