Politics

Apple Canada says it didn't intentionally mislead Canadians on iPhone slowdown

Apple Canada testified in front of House of Commons committee Thursday

March 02, 2018

An attendee uses a new iPhone X during a presentation for the media in Beijing on Oct. 31, 2017. Apple representatives are being brought before a Commons committee to explain problems with the iPhone's battery. (Thomas Peter/Reuters)

A Liberal MP asked Apple Canada today to hand over its internal correspondence discussing whether the slow performance some iPhone users experienced last year should have been made public — a request the company quickly turned down.

Representatives of Apple Canada appeared before the House of Commons standing committee on industry, science and technology to answer questions about the company's admission in December that it slowed down the software on older phones.

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Apple said the slowdown was necessary to avoid unexpected shutdowns related to battery fatigue. Many consumers responded with skepticism, reading Apple's move as a way to stir up demand for newer iPhone models.

When pressed, Jacqueline Famulak, manager of legal and government affairs at Apple Canada Inc., said the company never meant to leave the impression with consumers that it was withholding the reasons behind the slowdown.

"It was not intentional," she told the committee. "We don't think we miscommunicated anything at any time.

"We apologized because our consumers didn't hear directly from us."

Tensions flared during Beaches-East York MP Nathaniel Erskine-Smith's five minutes of questioning.

The former commercial litigation lawyer asked Apple Canada to disclose any internal communications, opinions or advice given to Apple Canada or its American parent company regarding whether the source of the iPhone performance problems should be made public.

Apple's lawyer, Simon Potter, quickly shot down that idea.

Apple says it wasn't a cash grab

"I'm not going to make that undertaking," said Potter. "If the committee wants to make a direction about things, we'll reconsider. But the fact is, as people here know, Apple is exposed to a number of class actions in the United States."

Apple is being targeted in four class action lawsuits in Canada and 50 in the U.S. They claim the company misled them into believing their phones were close to the end of their lifecycles, forcing them to buy new phones or new batteries.

'We often get the bum's rush when it comes to many of the consumer decisions and end up being kind of an afterthought.' - NDP MP Brian Masse

At one point during Erskine-Smith's questioning, the committee chair reminded him that Famulak was appearing voluntarily and wasn't under subpoena.

Throughout her testimony, Famulak maintained that Apple had never concealed its software policy from consumers.

"Apple would never intentionally do anything to shorten the life of any Apple product or degrade the user experience in order to drive customer upgrades," she said in a statement prepared ahead of the committee meeting.

"The sole purpose of the software update in this case was to help customers to continue to use older iPhones with aging batteries without shutdowns – not to drive them to buy newer devices."

While the U.S. Department of Justice and the Securities and Exchange Commission investigate whether Apple Inc. violated securities laws, NDP MP Brian Masse, who pushed for the committee to study the issue, said he wants to make sure Canadian consumers are treated fairly.

"For me it was about Canada responding to a problem that is obviously international," he said. "We've seen in the past that's not always the case for consumers.

"Canadians need to stick up for their rights."

Apple cutting battery cost

The committee also heard from the Competition Bureau and Primate Labs, the Toronto-based company that suggested the performance of Apple's iPhone 6s and iPhone 7 models slowed as they aged.

The company makes an app for measuring the speed of an iPhone's processor and published data just before Christmas that appeared to show slower performance in older iPhone 6s and iPhone 7 models.

Masse said he wants the Competition Bureau, which could launch an investigation, to be aware that Parliament is interested.

'I don't know whether our Competition Bureau has the resources or ... the teeth,' says Windsor West MP Brian Masse. (Dale Molnar/CBC)

"I don't know whether our Competition Bureau has the resources or has the teeth and the legislation that can adequately deal with Canadian protection and consumers," he said.

"That's no offence to them individually or the positions they occupy there. I think Canada is not well positioned for consumer protection.

"We often get the bum's rush when it comes to many of the consumer decisions and end up being kind of an afterthought."

Alexa Gendron-O'Donnell, associate deputy commissioner with the Competition Bureau, told the committee that, as the bureau is a law enforcement agency, it can't talk about ongoing investigations unless they are already public.

Other countries investigating Apple

The bureau also keeps the number of complaints private, she said. But the CRTC sent a letter to the committee saying it received 20 complaints about the iPhone.

Gendron-O'Donnell said companies operating in Canada need to comply with Canadian law, including the Competition Act.

Conservative MP Dane Lloyd said there's room for more consumer protection in Canada.

"I think the biggest issue is that this was completely avoidable. There was a transparency issue. I think if Apple was more transparent and up front, and had told people about why this slowdown was happening, we wouldn't be having the problem that we are having today," he told CBC's Power & Politics.

Apple has said it will cut the price of a battery replacement in Canada by $64, bringing it down to $35, through 2018.

Masse, who represents Windsor West in Ontario, said that won't go far enough to remedy the situation, especially when you consider shipping fees.

Government agencies in countries ranging from Brazil to France and Italy to South Korea are also investigating Apple following complaints.

ABOUT THE AUTHOR

Catharine Tunney
Reporter

Catharine Tunney is a reporter with the CBC's Parliamentary bureau in Ottawa. She previously worked with CBC Radio's The House and CBC Nova Scotia. She can be reached at catharine.tunney@cbc.ca

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