Apple Facing $2.25m Fine Over '4G' iPad [Updated]

The ACCC wants Apple to pay $2.25 million in penalties for advertising the new iPad as a 4G-capable device in Australia, a Victorian court has heard today.

The proposed multi-million dollar shellacking from the consumer watchdog comes after Apple tried to advertise the new iPad as 4G-capable in Australia. When the ACCC took the gadget giant to court over the issue, Apple offered refunds to duped customers before quietly dropping the 4G name, instead referring to it as "Cellular".

The hearing is still going in Melbourne today, but The Australian is reporting that the final settlement figure will depend on how many people were actually misled by the naming kerfuffle.

We'll update the story if and when Apple agrees to the proposed terms. [The Australian]

Update: The court has adjourned for the day. Both the ACCC and Apple spent the day putting forward what are known as proposed settlement and consent orders. Apple and the ACCC agreed on the $2.25 million penalty figure, but Justice Mordecai Bromberg said that he wanted more information on the difference between 3G and 4G before he made his ruling. The case will resume in Victoria on Tuesday.


Comments

    I've said it before and I'll say it again. This is absolute rubbish. While I am not an apple "fanboi" by any means, I do believe they are in the clear on this one. Telco's in Australia have been allowed to advertise their cellular networks as "4G" whilst not using a recognized "4G" technology, yet they are crying foul because an end user device, which is ACTUALLY 4G capable, is not able to access the sub-standard networks provided.

      Oh Chris, I don't even know where to start with you.

        Don't start, sounds like you already have no idea what you are talking about. Unless you've been working in the industry and have deployed CBD wide wireless networks yourself, shut up.

          What we know about Chris M:

          1. He works in the industry.
          2. He has deployed CBD wide wireless networks. Himself!
          3. He is not a 'fanboi'.
          3. He likes to tell people to shut up.
          4. He's said all this before - he'll say it again! Just you watch.

            Hahaha.. That is gold.

            Thanks for making my Friday afternoon a little more cheery. :)

            I leave for 5 minutes, FIVE MINUTES! And look what happens, comedy GOLD!

            Thank you, sincerely, for providing my daily dose of laughter.

        It's all good.
        Chris is right and the ACCC and the courts are wrong......
        Apple didn't drop 4G from all its marketing internationally - Chris is right remember.
        N.B. Chris is also a tool

      Didn't Apple drop 4G from all its marketing internationally? That seems to indicate that Apple know that what they did is not right.

      Anyhow isn't it for a court to decide whether Apple has misled people. If you believe that Telcos have done something similar then put in a complaint to the ACCC.

        What would be the point in that? vivid has been able to get away with misleading people for a few years now about the faux-4g network and no one at consumer affairs has done anything about it?

          If you aren't prepared to do anything about this great wrong (that only you see) then you are part of your own problem. Also see TSH's comment below.

      Firstly the ipad is not actually '4G' capable, it is however LTE capable, which are not the same things. Secondly the LTE which is known by the consumer market as '4G' chip in the iPad is not actually capable of running at LTE speeds here in australia due to it using a different frequency. The aim of this was to only be able to be run on certain carriers in the US. Now this misbranding would not be so bad if the iPad was able to be used at LTE speeds elsewhere in the world, but currently it only operates on US frequencies. And this is why they are being sued.

      totally agree with you on this Chris, it makes no sense :/

      Chris, its not about the device being 4G or not, its about the clear breach of Australian consumer law which states, no seller can advertise a product where an advertised feature doesn't or can't work within normal use. It is deceptive and false advertising. Apple shouldn't have advertised the "4G" aspect of the iPad in Australia when it clearly doesn't work outside of North America. 4G isn't a worldwide standard so selling and advertising a worldwide 4G device is wrong and lazy.

      Chris, whether or not the technology is 4G is irrelevant under the Australian Consumer Law and the Competition and Consumer Act. What is relevant is that there is a general consumer understanding that Telstra's network is 4G. Apple have come into the market and advertised their product as 4G, potentially, and arguably, implying that their product is compatible with this network called 4G. Under the ACL and CCA this is illegal. No one cares about your technical analysis of whether it REALLY is an ACTUAL 4G network. It is called a 4G network, Apple sold a product as 4G capable, it was not.

      THAT is how the law works pal

    While the standard LTE is not technically 4G, this is pretty much what is being sold as 4G around the world at the moment, and according to wikipedia is the only "4G" that the iPad supports

    The only 4G network (because nobody cares about that WiMax one) in Australia runs on LTE, it just runs on a different frequency that the iPad doesn't support.

    So going on that, Apple released a product that they knew was not compatible with the 4G currently operating in Australia, and claimed it was 4G compatible. Which to me is misleading advertising.

      ^this is is exactly the reason why they are in trouble.

    They've agreed to pay over $2Million.
    Small change for Apple.
    I think the ACCC should be concentrating on more important things.

      +1... like white van scammers

      They do a lot more than you think. This is only getting attention because Apple is involved

        Check out their website. Apple doesn't even warrant a mention in their news release

          Thanks Clee; I'm just annoyed as I'm aware of two investigations they've sat on for 6 months and other instances where they don't pick up cases because they can't do everything. I think their priorities are a bit wrong at the moment.

    There really is no 4g. There's no 4g standard it's just a term used to cover WiMAX and LTE

      4G as is understood by the common consumer. That's what the court cares about

        It's really not though. And having a different definition in Australia to the rest of the world really isn't helping.

          Ben, it IS, it is an Australian market definition, a reasonable consumer (not someone who reads gizmodo every day) would assume 4G is 4G, as 3G was 3G. The law has a reasonable consumer test, which this clearly fails. It is not about technical definitions, it is just what the public understand. If the biggest carrier in Australia sells a product called 4G it is clearly going to be assumed that it is 4G

          It doesn't matter. "4G" was only applicable in some parts of the US, the the branding was misleading on a global scale.

    It's good to see the ACCC getting a win every now and again :--].

    Any argument about wireless standards is mostly irrelevant: this is the AUSTRALIAN Competition and Consumer Commission, so the only relevant bits of information are (1) whether the device can access the network known as "4G" in Australia; (2) whether the device was held out to be capable of accessing that network, despite not being able to do so; and (3) whether (and how many) customers were deceived or mislead by this holding out.

    Where does the money go to once paid over to ACCC?

      Julia gets it to pay for the NBN rollout.

      Hopefully to my off shore account, but rather unlike I suspect.

      The department I work for makes more than it spends, and that goes into general revenue, so I would imagine this does too, as the ACCC would not be able to make a budget based on fines companies would pay during the year.

    lol some of the ignorance around this issue is hilarious!

    Flame me but I'm just happy to see something against apple. I'm not a fanboy either way but Apple dominance can't surely win everything and their pull won't always make others cower as most everyone seems to bend over backwards when apple clicks their fingers. I agree that it's misleading because atleast half my customers *need* and in depth explanation of why does it say it if it's not. The other half have just been told or read elsewhere. So for those that aren't tech experts like everyone else online is...lols...it needs to be clearly labelled and distinguished and if not applicable locally then branded and advertised correctly.

    "4G" is a misnomer.

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