When electronics break, manufacturers face a tough decision. Do they deny there's a problem or issue a costly recall? Rhodri Marsden looks at the burning issues for corporations – and customers

Who would you turn to if your mobile spontaneously burst into flames for no apparent reason? You'll be pleased to hear that the chances of this happening are statistically minuscule, but earlier this year a French teenager discovered his girlfriend's iPhone "crackling and popping like a deep fat fryer", and a Dutch man returned to his car to discover his passenger seat ablaze, also seemingly caused by an errant iPhone. There appear to be fewer than five such cases – that's against tens of millions of units sold worldwide – but it was enough for the European Commission to ask all 27 EU nations to keep it informed of any problems, under the community's rapid alert system for dangerous consumer products, known as RAPEX. Apple itself has ruled out any safety problem saying these were isolated incidents. The company hasn't had to deal with a dreaded scenario: the product recall.

As corporate grovelling goes, nothing is quite as humiliating as being forced to admit to the manufacture of a gadget that's not fit for human consumption. Neither is it the kind of thing that can be quietly muttered in the hope that no one notices; product recalls are, by their very nature, thunderous public announcements. They're welcomed by the few whose products have malfunctioned, they're a bit irritating for those whose units are working perfectly well but nevertheless have to be returned, and they leave boardrooms in a state of high anxiety over the crippling cost of getting the units back and either replacing or repairing them. The pressure on companies not to screw up has become more intense in recent years, with the internet effortlessly bringing together customers with identical complaints who have trawled the web for an explanation, and found each other instead. Thus a malfunctioning gadget that, a few years ago, could have been brushed off by a company as a freak occurrence, is now a potential PR disaster.

The most notable example of this consumer power was seen in 2006, when disgruntled consumers used the blogosphere to detail complaints and post photos of overheating lithium-ion batteries in their Dell laptops. When the furore refused to subside, Dell was forced to recall some 4 million Sony-manufactured batteries – an event which marked the beginning of an extended nightmare for Sony. Shortly afterwards, Apple recalled 1.8 million Sony batteries as a result of nine complaints of overheating and two reports of minor burns having been sustained, and by the end of the year similar recalls of Sony batteries were put out by IBM, Toshiba, Fujitsu and Gateway. This eventually led to a memorable nugget of advice from the US Consumer Product Safety Commission that laptops should no longer be used on your lap; the cost to Sony for replacing some 10 million batteries was more than $400m, and caused its quarterly profits to plunge by 94 per cent.

National trading standards bodies wield the power to force product recalls after performing a complex assessment of risk that to us, the end user, can seem somewhat baffling. For example, earlier this year, LG had to recall 30,000 mobile phones in the USA after one caller experienced a dropped call to the emergency services, but when an LG laptop burst into flames in March 2008, the event was described as being "a billion to one", and the product range was declared safe. In most cases companies will comply immediately – partly to avoid bad publicity, but mainly to avoid being sued for corporate negligence. Indeed, fear of legal action can result in a strange kind of paranoia; in April 2007 – many months after the Sony battery episode – laptop manufacturer Acer belatedly recalled 27,000 Sony batteries despite failing to find any fault in its products over months of testing, and having received no complaints from any customers.

It's certainly naive to imagine a new era of conscientious multinationals, but those that are swift to respond, bite the bullet and set up the obligatory recall website are less likely to suffer from stinging headlines as companies who refuse to admit that there's anything wrong. The 2007 recall of a batch of overheating Xbox 360 machines by Microsoft was handled with swift efficiency, and its quiet admission that it was down to corner-cutting in the production of a graphics chip (it was done in-house rather than contracted out in order to save some $10m, compared to the $1bn it cost in warranty repairs) actually seemed to win it some kudos. Compare that with Apple's recent run-in with a furious customer who resented the company's attempt to get him to sign a confidentiality agreement in return for a refund for his exploding iPod; the story was splashed across the news for days.

We haven't seen the end of the occasional exploding battery. One team of Japanese researchers recently concluded that the lithium-ion battery – the one generally implicated in these occasional combustions – is an "inherently flawed" product, referring to it as "a dangerous little box of energy". But thankfully, the chances of any of us experiencing injury at the hands of our gadgets is very slim – and it's good to know that, in the unlikely event of catastrophe, manufacturers are more likely to be called to account today than they've ever been. It's just a shame that they aren't quite so keen to issue recalls when a product isn't so much dangerous as just downright rubbish. But you're never going to get them to admit to that.

Total recall: Malfunctioning machines

Sony PlayStation 3

Sony clashed with the BBC last month, when "Watchdog" took up the case of disgruntled PlayStation 3 gamers. The consumer complaints programme responded to grumbles that the consoles' systems were shutting down immediately after booting up, all showing the same flashing fault indicator, dubbed "the yellow light of death". But as the system failures occurred after about two years of use, the PS3s were out of warranty, meaning Sony refused to fix the machines for free. Some 155 viewers got in touch with "Watchdog" about the problem. Sony, however, issued a six-page rebuttal, denying any manufacturing defect and explaining that the fault light could indicate "any one of a range of issues that may inevitably affect any complex item of consumer electronics".

Acer Aspire laptops

Acer was under scrutiny last week when it had to recall several models of its Aspire laptops. The built-in microphone cables are in danger of overheating if extreme pressure is applied to the left palm rest, potentially even getting hot enough to deform the body of the computer. The news prompted bemused comments online about just what could cause such pressure on a palm rest, but Acer has avoided controversy by offering to fix the computers at the company's expense, pointing out the recall was "voluntary".

Mac OS X Snow Leopard

Apple admitted a week ago that its new Mac OS X operating system, Snow Leopard, may lose users' data. After logging on to the "guest" account, when users logged back into their regular account they found their personal data – including documents, music and images – completely gone. Mac users have been unimpressed with Apple's slow response; posts about the problem have been appearing on Apple's discussion boards for over a month now. There's no solution as yet, but Apple issued a statement on Monday, which said: "We are aware of the issue, which occurs only in extremely rare cases, and we are working on a fix."

Holly Williams