March 17 (Bloomberg) -- Nikon Corp. will stop selling a digital camera model in China and offer free repairs, following claims on Chinese state-run television that product defects caused “black spots” on photographs.
The Tokyo-based company received a Chinese government order today to stop selling its D600 cameras and asked dealers to halt sales, Ryota Satake, a Nikon spokesman, said by phone. Nikon had earlier said it would service the models even after warranties expire, after China Central Television showed hidden-camera footage of customers demanding refunds and exchanges while local service staff blamed dust and smog for the spots.
Nikon’s alleged defects were highlighted in a March 15 broadcast marking World Consumer Rights Day, an annual program in China that has previously targeted companies including Apple Inc. and Volkswagen AG. The show last week also said that a business owned by Gohigh Data Networks Technology Co. helped plant software in mobile phones to collect private information without users’ awareness.
“I’m sure some of the big Western multinationals are breathing a collective sigh of relief that they weren’t targeted,” Torsten Stocker, partner at consulting firm A.T. Kearney, said by phone yesterday.
The program, which is watched closely by foreign companies and prompts some to prepare emergency response plans, “didn’t go for as spectacular or as big a target as in previous years,” Stocker said. “Maybe they are just trying to show that they are looking at a broad range of companies, not just foreign companies.”
Nikon fell 1.7 percent to 1,730 yen at the close of trading in Tokyo, extending this year’s decline to 14 percent.
Today’s order to halt sales came from the Shanghai Administration for Industry and Commerce, Satake said. While Nikon has already stopped direct sales of the D600, some dealers still have the model in stock, and Nikon will recall them, he said.
The Nikkei newspaper said March 10 that U.S. customers had raised a class-action lawsuit against Nikon claiming D600 defects. Satake said the manufacturer is aware of the D600 camera issue and “aims to offer the same standard service for customers all over the world.”
The company posted a statement on Feb. 26 saying it would provide free service for the D600 after warranties run out, including cleaning and a free exchange of parts. The Chinese broadcast highlighted the statement as insufficient to address a recurring defect in the camera.
In response to the television show segment about the mobile phone software that collects private information, Gohigh said it hasn’t spreaded malicious software or collected users’ personal information, according to a statement on its website.
Trading in the company’s shares was temporarily halted today in Shenzhen.
State media increasingly play a role in advocating on behalf of consumers as concern grows over China’s food and drug safety. Milk tainted with melamine, a toxic chemical used to make plastic and tan leather, was blamed for the deaths of at least six babies in 2008, with tens of thousands of children hospitalized. The government last year investigated companies that paid doctors to drum up drug sales, and cracked down on crime rings selling adulterated meat.
A tougher consumer protection law, which increases penalties for fraud and false advertising, took effect March 15. It stipulates that most products sold online, through TV marketing, by telephone and mail should be returnable within seven days without the need to provide a reason, the official Xinhua News Agency reported in October.
Last year’s CCTV “315 Gala” accused Apple of offering Chinese consumers warranties that weren’t comparable to those available in other markets. The company was then lambasted by the People’s Daily newspaper for arrogance and poor customer service. The SAIC followed by calling on local authorities to increase their supervision of clauses in Apple’s warranty policies.
Apple later changed its policy to offer full replacements of its iPhone 4 and 4S models and reset the warranty to one year. Previously, the company provided new parts and didn’t extend the warranty. Apple’s Chief Executive Officer Tim Cook issued a public apology to Chinese consumers April 2.
Volkswagen, Europe’s largest automaker, announced a vehicle recall after the show aired complaints from customers of abnormal vibrations, loss of power and sudden acceleration in models fitted with a direct-shift gearbox.
Local companies have also been targeted. Anhui Jianghuai Automotive Co. recalled more than 100,000 vehicles after last year’s program alleged it sold cars with rusted chassis. The automaker’s shares slumped 10 percent, the most in more than four years, in Shanghai on the next trading day.
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