The Federal Court has just handed down a $2.25 million fine to Apple today following the ‘4G’ iPad storm. $2.25 million is a small drop in Apple’s very deep ocean of cash, but Justice Mordy Bromberg said that this case did more than hit Apple’s wallet.
When a company is found to have breached Australian Consumer Law (ACL), the penalty isn’t something that’s plucked out of thin-air by a judge. Instead it’s something that has to meet a strict criteria. This includes an assessment on the size of the company, the type of infringement, the number of people let down by the infringement and a decision on whether or not the penalty is high enough to warn others from trying similar actions in future.
The ACCC and Apple came to an agreement on the $2.25 million figure in the previous session of the case, but it was up to Justice Bromberg to decide whether it was appropriate. Upon hearing more evidence about the technical nature of 4G, Justice Bromberg agreed with the fine.
In his reasons for judgment, Justice Bromberg said that while $2.25 million is no skin off Apple’s nose, the damage to the company’s reputation in Australia is much higher, and worth much more in the long run:
“The conduct concerned was deliberate and very serious. It exposed a significant proportion of Australian consumers of tablet devices to a misleading representation. A strong message through a substantial penalty is required. I harbour a concern that the size and financial strength of Apple diminishes the meaningfulness of the penalty proposed. However, I do not perceive any further transgressions by Apple to be likely. The fact of the litigation and the media attention which it has drawn, will no doubt be a sober reminder to Apple, and others who rely on their brand image that, as well as a penalty, there will likely be an intangible cost involved in a contravention of the ACL.”
The ACCC was the first to take on Apple over the 4G iPad issue, causing other government watchdogs to follow suit all over the world. The judgment is a reminder that your government just hit Apple where it hurts: its shining reputation.
Image: Apple/Danny Allen