Apple to Repay Customers for Tech Support

Apple Computer Inc. has agreed to settle federal charges that it deceived computer buyers by advertising free technical support and then charging a fee for the service, the Federal Trade Commission said Tuesday.

In an agreement with the regulatory agency, Apple agreed to reinstate its “Apple Assurance” program, offering free support to customers who purchased its Macintosh computers between September 1992 and April 1996. The Cupertino, Calif.-based company also agreed to reimburse those consumers who paid a $35 fee after Apple began charging for the service in 1997.

Between 1992 and 1996, Apple’s program offered live technical support to not only the original owners of its computers, but to their immediate family members, the FTC said. In October 1997--at the height of the company’s financial and management upheaval--Apple began charging for access to that support.

“For prospective purchasers of computer products, free access to live technical support is especially enticing,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection. “Companies that make such offers have to live up to their promises.”

An Apple spokeswoman did not return calls for comment. The company recorded its biggest losses in fiscal 1996 and 1997, totaling about $1.9 billion, or $14.88 a share, including various charges.

Around the same time, the company struggled to compete in a world where the vast majority of personal computers are based on Microsoft Corp.’s Windows operating system and Intel Corp.’s microchip technology. Apple fired its third chief executive in four years and brought back its co-founder, Steve Jobs, to take control. In fiscal 1998, Apple earned a profit of $309 million.

As part of the settlement, Apple agreed to send a “Notice of Refund” to every person who was wrongly charged the fee, offering a check or credit to the customer’s credit card account, the FTC said.

Apple has run afoul of federal consumer-protection laws before. In March 1997, it agreed to offer refunds and deep discounts on its PowerPC upgrade kits to settle charges that it misled consumers about the new technology’s cost and availability.

Apple shares rose $1.13 to close at $40.50 on Nasdaq.