Apple’s Down Under Troubles End With A Hefty Fine
June 22, 2012

Apple’s Down Under Troubles End With A Hefty Fine

Michael Harper for

The legal battle between Apple and Australia´s Australian Competition and Consumer Commission (ACCC) is now over, as a judge has ordered the Cupertino company to pay out A$2.25 million (That´s $2.26 million American) to the ACCC.

Earlier this month, a judge ruled in favor of the ACCC, saying Apple had misled customers about the capability of their 4G branded iPads. Now, Federal Court Judge Justice Mordecai Bromberg has approved the A$2.25 million fine to the ACCC, in addition to a A$300,000 reimbursement for legal fees. Justice Bromberg also added Apple´s actions were “deliberate,” as well as "serious and unacceptable´,” according to the Herald Sun.

When Apple first launched their new iPad in the land Down Under, they advertised the 4G connectivity capabilities of their best-selling tablet. It was quickly discovered Australia´s 4G network, Telstra, didn´t operate their 4G LTE on the same frequency as the new iPad, therefore restricting the new iPad to the slower speeds on HSPA+.

"The understanding of Australian consumers of the term "4G" in relation to data mobile networks is to be distinguished from that relating to other mobile data networks and, in particular, those which have been promoted in Australia as "3G" networks," Justice Bromberg said.

Though the 4G iPad operates on North American networks, the ACCC accused Apple of using false advertising to sell their tablets.

Apple first agreed to offer a full refund to any Australian customer who may want one. Not fully satisfied, the ACCC began to ask Apple for more. Since this issue first began, the ACCC has successfully persuaded Apple to change their wording on their website, offer refunds and proactively email Australian customers notifying them of these refunds.

Though he approved Apple´s fine and their payment of A$300,000 to the ACCC, Justice Bromberg wouldn´t be appeased without some final parting words for the iPad maker.

“Apple's admitted contraventions were not trivial and the penalty to be imposed requires serious and careful consideration," Justice Bromberg said. "Apple does not seek to deny the deliberateness of its conduct and there are no facts before me which seek to excuse or explain the conduct, other than that the conduct occurred at the behest of Apple's parent company (Apple Inc,) which provided the promotional material for Australia.”

With similar lawsuits beginning to pop up in the UK, Apple finally bent underneath the pressure and changed the way these iPads were sold from “Wi-Fi+4G” to “Wi-Fi+Cellular.”

"It is not possible to say with any certainty how many Australian consumers were misled by Apple's use of the term 4G ... nor is it possible to discern the level of disappointment involved for those consumers who were misled.”

"I have no doubt that given the promotion by Telstra of the superiority of its 4G network, many purchasers would have felt decidedly short-changed."

As expected, the ACCC is also pleased to have this matter settled and done with, as well as having their legal costs sufficiently covered. In a statement, Chairman Rod Sims has said, "The A$2.25 million penalty reflects the seriousness of a company the size of Apple refusing to change its advertising when it has been put on notice that it is likely to be misleading consumers.”