Apple to pay $2.25 million in Australia over misleading iPad 4G branding

By on June 8, 2012, 11:00 AM

Apple has agreed to pay a settlement of $2.25 million in Australia over accusations that it mislead customers by promoting the 4G capabilities of the new iPad, despite knowing that the tablet did not support LTE networks in the country. The issue was first brought up in March by the Australian Competition and Consumer Commission (ACCC) who accused Apple of breaching consumer laws.

Apple’s iPad uses the 700MHz and 2100MHz frequency bands for LTE connectivity, but Australia’s sole LTE network run by Telstra operates on the 1800MHz band.

After some back and forth between Apple and the Australian consumer watchdog, Apple eventually altered its marketing around the world to lessen the confusion, renaming the tablet model in question as "iPad + Cellular”. It also offered  refunds to unhappy customers.

The company was able to dodge a potential injunction in Australia but it’ll still have to pay the $2.25 million penalty to the ACCC — down from a maximum of $4.4 million — as well as an additional $300,000 to cover the organization’s court costs. The proposed settlement, submitted to the Federal Court in Melbourne on Friday, must be approved by the court first but no timetable has been set.




User Comments: 14

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VitalyT VitalyT said:

And what about the rest of us?

- selling the most unsecured OS, and calling it most secure?

- claiming A5X has 4 times more power than Tegra 3, while in reality it is even less productive than Tegra 3?

- selling the product that drops charge even while connected to the power, while under full load, and calling it a better battery life?

Should I continue here or just forward my case to the court?

Guest said:

I have a new iPad too. I live about 100 Kim's from a couple major cities, Soo am limited to 3G unless I travel to he city. All I sue for only getting 3G? Heck no. Is it apples fault my service provider doesn't service the area? No.

Guest said:

I have a new iPad too. I live about 100 Kim's from a couple major cities, Soo am limited to 3G unless I travel to he city. All I sue for only getting 3G? Heck no. Is it apples fault my service provider doesn't service the area? No.

That's irrelevent though... This is more about what the device is advertised to do.

Guest said:

But it does do it, its just not available in this area. Not apples fault.

Guest said:

So basically, keep the change australia.

Tygerstrike said:

Apple does ALOT of shady stuff, but in this case Apple is getting the shaft. To expect Apple to know every major carriers network and type is a bit stupid. There is no way Apple could make a product that is going to work on EVERY system. Its unrealistic to expect it. Its not Apples fault that Aussies cant get a good 4G. Then again with all the lawsuits that Apple files, a bit of turn about is fair play is involved here. So Apple may not be responsable for how another countries cellular network is set up, but the slap in the face may cause Apple to rethink all their frivolous lawsuits in the future.

Scshadow said:

My gut reaction even though I'm an apple hater is to defend Apple with this 4g labeling. Thats because I believe people should be tech literate and should research products before making purchases. The problem is, Apple is a smart smart company. Its not an oversight by apple. There is no way they were ignorant of the fact 4g wouldn't work in that country. They had to have known and they had to have decided to advertise it as 4g on purpose. Anyway... 2.2 mil... what a slap on the wrist.

MilwaukeeMike said:

Misled is the nice way to say it. Scammed would be mean, and 'lied' would be accurate. I was sold a 4g phone in milwaukee, but there is no 4g network here. I wasn't too mad because I understand Sprint isn't going to take 4g off the box depending on which store it goes to. But Austrailia is a huge island. You can't drive to an area that has coverage, or logically believe any iPad sold there would ever even be used on an LTE network.

You can't blame customers either. Apple products are specifically marketed to people who are less tech-savvy. Apple products have fewer customization options and have the smallest learning curve. They don't even put tech specs in their ads.

The weird part is... why? it's not like there's any tablet that could compete anyway.

Guest said:

Honest question: how many other products in Australia are marketed with a label of 4g that doesn't work with your system? And are they required to also change their packaging?

Tygerstrike said:

@Mike

You should check out the Motorola Xoom II. I have the Xoom 1 and I love it. I also have an Ipad 2. Xoom is running Android ICS. LOTS of customization on the Xoom. Where Apple is the kindergarten tablet, Xoom is High School.

Guest said:

The point is that there IS a 4G network in Australia, and Apple knew that the ipad was not compatible with it! It is not the same as 4G in the U.S., and by marketting the ipad as 4G here Apple was deceiving people.

gwailo247, TechSpot Chancellor, said:

Honest question: how many other products in Australia are marketed with a label of 4g that doesn't work with your system? And are they required to also change their packaging?

Well, sounds like there is an organization in Australia dedicated to that very question.

You should e-mail them and let us know.

gwailo247, TechSpot Chancellor, said:

Apple does ALOT of shady stuff, but in this case Apple is getting the shaft. To expect Apple to know every major carriers network and type is a bit stupid. There is no way Apple could make a product that is going to work on EVERY system. Its unrealistic to expect it. Its not Apples fault that Aussies cant get a good 4G. Then again with all the lawsuits that Apple files, a bit of turn about is fair play is involved here. So Apple may not be responsable for how another countries cellular network is set up, but the slap in the face may cause Apple to rethink all their frivolous lawsuits in the future.

Actually yes, I would expect Apple to understand the technical differences between different countries they do business in. In fact I would expect that there are people at Apple whose very job is to know every single cell phone company in the world, and what kind of network they run, and whether or not Apple products can run on their network and/or if Apple should try to make their products run on their network. I would expect a company that manufactures one (if not the) most popular smartphone on the planet to know that.

And furthermore, I would expect Apple to have lawyers who very carefully vet every single ad, label and package to avoid....class action lawsuits against false advertising. Like they got sued for the antenna, or storing Wi-Fi tower locations on the phone, for poor battery life, and one of the countless lawsuits that Apple has been subjected in the past few years.

No offense, but "poor Apple didn't know no better" is not going to fly. If they can analyze the microscopic differences between Samsung phones and their own, they can realize that the *ONLY* LTE network on an entire continent is not compatible with their product....

TJGeezer said:

I wonder whether some Australian corporate marketing bureaucrat simply picked the promo text from lists of Apple-approved lines, without thinking much, or at all, about whether it was technically accurate. That wasn't his or her area of competency. To a lot of nontechnical people (consumers as well as Marketing Dept. flacks) 3G is 3G is 3G, Hertz is a car rental and megahertz is WTF?!

Because this does feel inadvertent on Apple's part, whatever their other sins. Wrong but not intentional, just something that slipped through while techies were doing geeky stuff and marketers were spinning images and words and lawyers were looking for tax loopholes or composing nastygrams or seeking reasons to sue and executives were jockeying for position and... like that.

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