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France opens probe into Apple over planned slowing down of iPhones

Paris prosecutors have launched a probe of US tech giant Apple over suspected slowing down of some iPhone models. Apple Execs could face a jail sentence if found guilty.

France opens probe into Apple over planned slowing down of iPhones
AFP

Paris prosecutors have launched a probe of US tech giant Apple over suspected “planned obsolescence” in some of its iPhone models, a judicial source told AFP on Monday.

The investigation was opened on Friday and is being led by anti-trust and consumer protection specialists in the French economy ministry.

Apple did not immediately respond to a request for comment on the probe.

It comes after a complaint by the association Stop Planned Obsolescence (HOP or Halte a l'Obsolescence Programmee) after Apple admitted last month that it intentionally slowed down older models of its iPhones over time.

Planned obsolescence is a widely criticised commercial practice in which manufacturers build in the expiry of their products so that consumers will be forced to replace them.

It is decried by consumer groups as being unethical and is suspected of being particularly prevalent in the electronics industry, which produces mountains of unrecyclable waste each year

To tackle the problem, France passed landmark legislation in 2015 known as “Hamon's law” which made the practice illegal and — in theory — obliged retailers to say whether replacement parts were available.

The law, named after former Socialist minister Benoit Hamon, stipulates that a company found to be deliberately shortening the life of its products can be fined up to five percent of its annual sales while executives can face up to two years in jail.

Last month Apple confirmed what critics had suspected for years: that it intentionally slows performance of older iPhones as their batteries weaken with age. 

 

The company said this was to extend the performance of the phone, which uses less power when running at slower speeds, and was to prevent unexpected shutdowns due to a low battery charge.

It denied incorporating planned obsolescence.

However in late December the company issued an apology for slowing older models and said it would discount replacement batteries for some handsets.

“We know that some of you feel Apple has let you down. We apologize,” Apple said in a message to customers on its website on December 28.

“We've always wanted our customers to be able to use their iPhones as long as possible.

We're proud that Apple products are known for their durability, and for holding their value longer than our competitors' devices.”

Critics have accused Apple of nudging iPhone users to upgrade to newer models by letting them think it was the handsets that needed replacing, rather than just the battery.

HOP believes Apple could be liable for a fine in line with the value of all of its iPhone sales in France since Hamon's law came into force on August 17, 2015.

The California-based group also faces a class-action suit in the United States.

In another headache for Apple in France, the company announced last week that it has filed a lawsuit against the Attac activist group after about 100 of its supporters occupied the tech giant's flagship store in Paris last month, protesting alleged “wide-scale tax evasion” by the firm.

French prosecutors have also launched a probe into Japanese printer maker Epson for alleged planned obsolescence in its products.

TECHNOLOGY

Hundreds of German banks make Apple Pay service available for first time

Together with some German banks, Apple is pushing for a change in Germany’s cash-loving culture by making contactless payment via mobile phones more accessible to users.

Hundreds of German banks make Apple Pay service available for first time
Photo: DPA

It’s been a year since the launch of Apple Pay in Germany, and significantly more consumers are now able to use the mobile payment service than ever before. 

READ ALSO: Apple Pay finally launches in cash-loving Germany

On Tuesday, 371 out of a a total of 379 Germans savings banks made the service available for a total of 50 million customers.

Commerzbank, Norisbank, and LBBW (Landesbank Baden-Württemberg) are among the banks now offering the use of the service to their clients.

Integration of popular girocard system still in the works 

As is typical for German banks, only credit cards and debit cards issued by the banks themselves can be integrated into the service.

A system which uses the very popular girocard, previously known as the EC card, is still in the works. This interbank network and debit card service connects virtually all German ATMs and banks. 

The logo of the popular girocard brand, formerly know as EC-Karte. Photo: DPA.

Jennifer Bailey, the head of Apple Pay, said that the service will be integrated into the girocard system in the coming year. 

Extra security 

Apple Pay allows customers to pay using the iPhone or Apple Watch as if they were using a contactless card. The payment method also applies for internet purchases. 

Users are able to unlock and approve the transactions through face identification or fingerprint scanning technology. Bailey emphasized that this technology ensures that the fraud rate is virtually zero with Apple Pay. 

Contactless payment at the cash register relies on the NFC chip technology. NFC stands for “near-field communication,” and works by allowing various devices equipped with the technology to exchange data. Apple's Jennifer Bailey gives a presentation about Apple Pay in Cupertino, CA earlier this year. Photo: DPA. 

 

It is especially secure due to the fact that communication between devices is only possible within about 10 centimeters. 

The banks can only access the NFC via use of Apple Pay, due to Apple’s possession of the special high-security chip within their devices called the “Secure Element.”

German regulation challenges Apple’s dominance 

Germany passed a law in late November that requires platform operators such as Apple to provide financial services, such as banks who use their technology, full access to the infrastructure, such as the NFC, which makes the system work in exchange for a small fee. 

The law ensures that Apple’s rivals in the mobile payment market would still have access to the technology that makes it work. 

The regulation is just one part of recent actions in Germany to regulate US technology companies and their market dominance. 

Commerzbank was one of the banks to adopt the Apple Pay service recently. Photo: DPA.

Apple criticized the law but feels confident overall about accommodating it from a legal perspective. The company emphasized that it already provides access to the NFC chip infrastructure to financial service providers, thus meeting the requirements of the law. 

“When a card is added to the Apple Wallet, banks can decide whether to use it to trigger secure payments from their own apps via NFC. No new law is necessary for that,” the statement said. 

Banks ‘voting with their actions’ 

“Banks are voting with their actions by working with us on Apple Pay,” Bailey said of the bill, in regards to the latest additions and the development of a girocard solution. Apple’s system is still the safest way to pay with the iPhone. 

“The only way to the NFC chip today is via Apple Pay,” Bailey said, expressing concern that any other system would jeopardize user data and security. 

Translated by Kate Brady. 
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