Apple Pays The Piper
June 8, 2012

Apple Pays The Piper

Michael Harper for

It looks like the long and twisting saga of the New iPad Down Under is coming to a close as Apple finally agreed to shell out the big bucks in order to appease the powers that be.

Agreeing that they may have misled some Australian customers about the iPad´s ability to achieve 4G speeds, Apple now faces a penalty of 2 million Australian dollars, or $1.9 million American.

In addition to agreeing to pay out $2 million to settle this case, Apple also agreed to pay the commission´s legal costs to the tune of $300,000 Australian. Though Apple has agreed to pay this amount, the Australian judge has yet to approve the penalty as the court hearing goes on.

The lawyer for the ACCC, Colin Golvan, has said he feels this penalty will act as a deterrent against misrepresenting the capabilities of such devices.

One of Apple´s lawyers, Alan Archibald, said the penalty his company agreed to is “more than adequate.

The Australian Competition and Consumer Commission (ACCC) had taken the iPad maker to court after some Australian customers complained about their new tablets not working with Telstra, Australia´s 4G carrier.

Though the popular tablet can work on 4G LTE networks in North America, so far it has been incompatible with other next-generation 4G networks. Telstra´s 4G network, for instance, operates in the 1,800 megahertz frequency, while the iPad is only compatible with the 700 and 2,100 megahertz frequencies. The iPad was released in Australia on March 16, just 12 days before the ACCC began to take Apple to task over this incompatibility.

The month´s long back-and-forth tug of war saw the ACCC ask Apple to place disclaimers, stickers and warnings throughout their stores and on the iPad boxes themselves. Apple refused to do this, of course, but did begin to offer refunds to any customer asking for one and changing the wording of their website. Apple also agreed to send emails to each of the Australian iPad owners, proactively offering the refunds and alerting them about this issue.

Still wanting more, the ACCC continued with their suit, asking Apple to change the name of the device to remove any mention of 4G. At first, Apple fired back with claims that the iPad did, in fact work at 4G-like speeds and therefore, did not mislead any of their customers. Apple later changed their tune and remarkably changed their branding of the iPad from “Wi-Fi + 4G” to “Wi-Fi + Cellular.” Such a rebranding covers the company from being sued in other countries as well, as commissions in the UK were already gearing up for legal battles over the same issue.

Explaining the name change to the BBC, Apple said in a statement, “Carriers do not all refer to their high speed networks with the same terminology.”

“Therefore we´ve decided to use ℠Wi-fi + cellular´ as a simple term which describes all the high speed networks supported by the new iPad.”