iPhone repair agencies shift policies after FTC probe

The Korea Fair Trade Commission (FTC) announced on Wednesday that the eight agencies approved by Apple Korea to repair iPhones have changed their policies to become more consumer friendly as of last month.

In July, the fair trade watchdog initially ordered Apple Korea’s six authorized agencies, including Dongbu Daewoo Electronics Service, Ubase and BeyondTech, to address consumers’ complaints.

The FTC later asked SK Telecom and KT, the two largest telecom carriers that also repair iPhones, to revise their policies, the commission said.

In the past, iPhone owners who wanted their phones fixed had to agree to repairs before they knew what was wrong or how much it would cost. They also couldn’t cancel a repair after a shop had begun working on their phone.

Owners were also always charged for the most expensive repair and would receive a refund later if the work wound up costing less.

Shops wouldn’t tell customers what was necessary or what they had done, which made some suspicious that they were being overcharged.

But as of last month, four things have changed for iPhone users.

First, iPhone users can now pay for exactly the repairs that were performed after they have been finished.

Second, they can ask each repair shop what repairs were done.

Third, they can also decide whether they actually want a repair or not after being informed about what parts are needed and how much it will cost.

Finally, they can cancel a repair after it has started if additional costs are deemed necessary.

But while the controversy was initially centered on the repair shops, it has expanded to Apple Korea itself, which has been accused of gabjil, a Korean word meaning the use of power against the powerless, in its relationship with the repair shops.

The FTC has recently begun a new investigation into Apple Korea to see if the company has forced unfair contracts on its repair service suppliers.

“We have found that there were unfair clauses between Apple Korea and its designated repair agencies. We’re investigating, and the results will be announced soon,” FTC Chairman Jeong Jae-chan said at a meeting on Tuesday.

The FTC found the unfair clauses in the contracts made with service agencies while reviewing Apple Korea’s customer terms and conditions.

According to the contract, if an iPhone user drops off a phone at one of Apple’s designated repair agencies, the shop has to register the model and order required parts or screens directly from Apple Korea’s headquarters.

But the contract between Apple and the service supplier says Apple can refuse or cancel the orders from any reasons, and the repair shops can’t do anything if Apple gives them a different part than they initially requested. Apple also does not take responsibility for any financial problems created by the headquarters refusing to send, or delaying the delivery of, necessary parts, the FTC said.

If the FTC concludes the current supply contract is unfair, Apple Korea will have to revise it.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]