FTC Threatens Legal Action Over Sony, Microsoft and Nintendo Due To Illegal Warranty Practices
The Federal Trade Commission, an independently run agency that promotes the protection of consumer rights and aims to prevent unfair business practices, announced last month that it was warning six large companies to revise illegal warranty policies. However, the identity of these companies were not revealed at the time. Today, Motherboard has reported that the companies involved are Sony, Microsoft, Nintendo, Hyundai, HTC, and ASUS.
Through the use of a Freedom of Information Act request, Motherboard obtained warning letters that identified the aforementioned companies. These letters also revealed that the FTC has given all six companies a 30-day deadline to change their official warranty policies.
Specifically, the policies in question are repair restrictions that have been put on devices that prohibit hardware from being repaired by a third-party outlet. For example, Sony has a “warranty-void-if-removed” sticker on the PS4 stating that if it’s removed by anyone except a Sony technician, then the warranty of the console will be null and void. Essentially, only Sony technicians are permitted to touch the insides of a piece of PS4 hardware.
Sony is not alone, either. Microsoft also explicitly states that if an Xbox One is repaired by a third-party, then the system warranty does not apply.
“Warranty language that implies to a consumer acting reasonably under the circumstances that warranty coverage requires the consumer to purchase an article or service identified by brand, trade or corporate name is similarly deceptive and prohibited,” FTC Associate Director of Marketing Practices Lois Greisman wrote in the letters.
The FTC purports that all six of the aforementioned companies have violated the law. How each company responds to this request, and whether the warranty policies will be updated by the end of the 30-day window – May 9th – is still yet to be determined. But what we do know for sure, is that none of the targeted companies will want to destabilise the momentum they’ve built up if they can avoid it.