iPhone pilloried at National Assembly

By Kim Tong-hyung

Representatives of Apple’s South Korean office were sweating it out in a National Assembly audit, Wednesday, with lawmakers criticizing the company’s supposedly inadequate support services for iPhone customers here. The barrage of questions, however, only resulted in circular and hollow debate as the lawmakers ran into Steve Park, Apple Korea’s public relations director armed with a bag full of ``no comments.’’ The lawmakers are hoping to see Andrew Sedgwick, the general manager of Apple Korea, when they continue their examination on Apple and KT, the mobile-phone carrier that exclusively provides the iPhones, on Oct. 21.

Apple’s day in Yeouido was arranged after the Assembly National Policy Committee demanded company officials to appear for its annual audit of the Korea Fair Trade Commission (FTC), the country’s antitrust watchdog.

KT admits that a growing number of unhappy Apple customers are claiming poor after-sales services when they return their faulty iPhones. And FTC officials have been suggesting that Apple’s repair policy and other customer support services here have been inconsistent with Korean regulations, which require companies to offer refund or replacement for products that inexplicably develop problems within 10 days of purchase. The local law also gives customers the right to demand a replacement or free repair services for products within a month of purchase.

Apple isn’t offering these options for Korean iPhone customers, the FTC said ― users aren’t offered new products nor do they get their original handsets back after repair, but are rather given a random refurbished phone from Apple’s vast inventory.

``It could be said that Apple is disrespecting Korean law regarding consumer complaints issues. Apple has the options to provide free repair, new products or refurbished ones, but just one of them is available for Korean customers, and there are concerns that the company is abusing its market leadership to infringe on customer rights,’’ said Yu Won-il of the Creative Korea Party.

``Even within the one-year warranty period for iPhones, Apple is forcing customers to saddle the cost for refurbished phones if the visible damage to the handset is beyond what it considers manageable, even in the cases where the defects have much to do with problems related to the manufacturing process, not mishandling by the user. It could be argued that Apple isn’t following Korean antitrust rules here.’’

In response, Apple’s Park claimed that the refurbished phones given to Korean users are in a condition comparable to new products. However, his refusal to answer specifically on the company’s after-service polices drew the ire of lawmakers.

``I handle public relations responsibilities and there is a separate manager for Apple Care (Apple’s range of hardware services and support). I don’t know the details because I am not in charge of the area,’’ Park said. This triggered an angry response from the Grand National Party’s Kwon Teak-ky, who demanded the questioning be postponed and for Sedgwick to be present when the committee continues the audit on the FTC on Oct. 21.

``Why did you come here when we asked for the head executive? Bring him here next time,’’ Kwon hissed.

``We were trying to discuss the unfairness of customer contracts related to Apple products, but the testimonies of the witness who appeared today are clearly meaningless.’’

Kwon also claimed that Apple has been providing a better level of customer services in China than it is in Korea, and criticized KT for its failure to anticipate the issues related to after-sales services while negotiating with Apple to bring the iPhone here. According to Kwon, Apple is offering a wider range of repair services for users in China, instead of just providing refurbished phones, and is providing more flexibility in terms of refunds there as well.

``Chinese iPhone users are getting their handsets fixed for free within the one-year warranty period, while Koreans are forced to open their wallets. KT clearly knew about this disparity, but clearly didn’t try that hard to negotiate better after-sales conditions for Korean iPhone users,’’ he said.

Sedgwick was also called in during last year’s National Assembly when lawmakers were intending to question him on issues related to the iPhone’s delayed arrival in Korea, but he declined to appear citing his business schedule.

Apple has managed to sell more than 1 million iPhones here, including the iPhone 3GS that was released by KT in November last year and the latest iPhone 4. However, the increased sales have also led to more complaints from users related to after-sales service issues, and Apple has been moving to massage customer egos recently, revamping its Korean after-sales network to offer a wider variety of repair services here.

``You can’t blame Park for his performance at the National Assembly, as local employees from multinational companies are rarely given the autonomy to answer on specific issues. Things won’t be much different if Sedgwick does appear later this month,’’ said a public relations official at another foreign handset maker.