Apple Faces €10M Fine in Italy Over iPhone Water Resistance Claims

Apple is facing a potential €10 million fine in Italy due to concerns surrounding its marketing of iPhones as “water resistant” and the limitations of its warranty coverage regarding liquid damage.

Italy’s competition authority, the AGCM, has informed the technology company of its intention to impose the penalty for commercial practices related to the advertising and warranty terms of several iPhone models released since October 2017. This action follows an investigation prompted by customer complaints concerning the promotion of water resistance and the subsequent denial of repair costs for water-related issues, specifically encompassing the iPhone 8 through the iPhone 11 series.

According to a document released by the AGCM in late October and publicized today through Reuters, the regulator has determined that Apple violated the nation’s consumer code on two separate counts, citing what it describes as “misleading” and “aggressive” marketing tactics.

The investigation revealed that Apple’s iPhone advertising led customers to understand the devices were waterproof, rather than simply water resistant—and that the restrictions of this capability were not sufficiently emphasized in promotional materials. A statement clarifying that the Apple warranty does not cover liquid damage was considered an attempt to avoid fulfilling its obligations to consumers, especially considering the prominent advertising of water resistance.

Apple utilizes a liquid contact indicator within iPhones, which changes color from white or silver to red when it detects the presence of liquid. This indicator is routinely checked by Apple’s technical support personnel during the repair process.

The AGCM report details instances of customers being denied warranty service after their iPhones were briefly submerged in seawater. Another customer’s claim was rejected after they washed their device under a faucet, which Apple classified as improper usage.

A further case involved an iPhone XR that ceased functioning after only one month of use following water exposure, with Apple requesting the customer purchase a replacement device, albeit at a reduced price.

An iPhone XS owner, whose device was one year old and had reportedly never been exposed to water, was denied coverage by Apple support, who asserted that it had been. The customer then complained to the regulator, arguing that it is impossible for a consumer to definitively prove their device was not immersed in water for a duration or depth exceeding Apple’s specified water resistance limits.

We have contacted Apple for a statement regarding the AGCM’s conclusions.

The technology company has a 60-day period from the date of notification to formally appeal the regulator’s decision.

The proposed fine represents less than half of the operating profit generated by Apple’s Italian division between September 2018 and September 2019. During that period, the company reported revenues of €58,652,628 from sales and services, resulting in an operating profit of €26,918,658.

Italy’s competition watchdog previously penalized both Apple and Samsung approximately $15 million two years ago for implementing updates that potentially slowed down or rendered devices unusable. In February, France issued a $27 million fine to Apple for limiting the performance of older iPhones with aging batteries.

Apple has also encountered significantly larger penalties from competition authorities across Europe, including a $1.2 billion fine from France’s competition authority in March of this year. This penalty was levied due to accusations of operating a reseller cartel in collaboration with Ingram Micro and Tech Data, two wholesale distribution partners.

Furthermore, Apple was required to pay up to €500 million in back taxes to French authorities last year.

Approximately $15 billion from Apple’s European headquarters is currently held in an escrow account to address a 2016 European Commission “State Aid” ruling, which alleged that the company illegally benefited from favorable corporate tax arrangements in Ireland between 2003 and 2014.

In July, Apple and Ireland secured a victory in the initial stage of an appeal against this charge. However, the Commission subsequently filed an appeal in September, indicating that the case will proceed to the CJEU, potentially extending the legal proceedings for several years.

EU legislators are actively pursuing global reforms to digital taxation, while certain Member States are independently implementing their own digital taxes.