[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Notices]
[Pages 5297-5298]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2487]


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FEDERAL TRADE COMMISSION

[File No. 982 3005]


Apple Computer, Inc.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.


[[Page 5298]]


ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before April 5, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Matthew D. Gold or Linda K. Badger, 
San Francisco Regional Office, Federal Trade Commission, 901 Market 
Street, Suite 570, San Francisco, CA 94103, (415) 356-5275 or 356-5276.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. The following Analysis to Aid Public Comment 
describes the terms of the consent agreement, and the allegations in 
the complaint. An electronic copy of the full text of the consent 
agreement package can be obtained from the FTC Home Page (for January 
26, 1999), on the World Wide Web, at http://www.ftc.gov/os/
actions97.htm. A paper copy can be obtained from the FTC Public 
Reference Room, H-130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 
20580, either in person or by calling (202) 326-3627. Public comment is 
invited. Such comments or views will be considered by the Commission 
and will be available for inspection and copying at its principal 
office in accordance with Section 4.9(b)(6)(ii) of the Commission's 
Rules of Practice (16 CFR 4.9(b)(6)(ii).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from Apple Computer, Inc. 
(hereinafter ``Apple'' or ``respondent''). Apple is a major 
manufacturer and marketer of personal computer hardware and software 
products.
    The proposed consent order has been placed on the public record for 
sixty (60) days for the reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and any comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    This matter has focused on Apple's advertisements for its ``Apple 
Assurance'' program. Under Apple Assurance, which Apple offered on most 
of its hardware products from September 1992 to April 1996, consumers 
who purchased Apple products in the United States were entitled to free 
access to technical support personnel for as long as they owned their 
Apple product. In October 1997, however, Apple began charging Apple 
Assurance consumers $35 for such access. Accordingly, the proposed 
complaint alleges that the company falsely claimed that Apple Assurance 
customers would have access to Apple technical support personnel, at no 
charge, for as long as that customer owns the product.
    The proposed order contains cease and desist provisions as well as 
complete redress for consumers harmed by Apple's conduct. Part I of the 
proposed order would prevent Apple from misrepresenting the terms of 
any technical support service offered in conjunction with any product.
    Part II would require that the company reinstate its promise to 
Apple Assurance customers, and provide live, free technical support for 
as long as they own their computers. Specifically, this provision 
requires that the company provide access to complimentary technical 
support personnel, toll-free, to each ``eligible person'' who provides 
the valid serial number of a ``covered product'' for as long as such 
person owns the covered product. The order defines ``eligible person'' 
as any original owners, or member of the owner's immediate family, who 
purchased a ``covered product.'' A ``covered product'' is an Apple 
product sold in the United States between September 1992 and April 
1996. Appendix A to the order includes a list of all models sold during 
this period of time. Under the terms of Part II of the order, Apple 
would be permitted to suggest that an eligible person seek answers to 
questions via less expensive means (such as through pre-recorded phone 
trees, the Internet, or product manuals), as long as the person always 
has the option of speaking to live technical support personnel.
    Part III of the proposed order would require Apple to reimburse 
each eligible person who has wrongly paid any fee for technical support 
as a result of Apple's actions. Pursuant to the order, Apple must send 
a ``Notice of Refund'' to each such person within 20 days of service of 
the order. The Notice of Refund must include either a refund check or a 
notification of a credit to the customer's credit card account for the 
full amount paid for technical support services. Further, the Notice 
informs these customers of their continuing right to free, live, 
technical support for as long as these customers, or members of their 
immediate families, own their Apple products.
    The proposed order also requires the respondent to maintain 
materials relied upon to substantiate claims covered by the order, to 
provide a copy of the consent agreement to all employees or 
representatives with duties affecting compliance with the terms of the 
order; to notify the Commission of any changes in corporate structure 
that might affect compliance with the order; and to file one or more 
reports detailing compliance with the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order, or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-2487 Filed 2-2-99; 8:45 am]
BILLING CODE 6750-01-M