Apple Will Pay $2.25m In Fines Over The '4G' iPad, But The Money Doesn't Matter

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.

Ouch.

Image: Apple/Danny Allen


Comments

    Good. And to quote from the Life of Brian. "Now don't do it again".

    You forgot an 'm' in the title...

      And it's also $2.55m; another 300k in legal fees.

      Looks like Apple scored a bargain!

    Heading is missing the 'million'.

    I was in Big W last night, and they're still being advertised as "4G" there... :p

    Might want to fix that headline up, or did Apple really pay two bucks?

      oh dammit, ninjaed

    $2.25... so to us thats $0.0000000000000000000000000000000000000000000000000000025

    How does it diminish Apple's reputation or brand? I don't see it.. Plus they will probably roll up with a briefcase full of cash to the ACCC and pay it.

    "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"
    Would that not mean that the fine should have been in the billions of dollars?

    As the judge says, Apple values it's reputation. How did they prove it was deliberate deception and how would such action ultimately benefit Apple. I have a hard time believing they would do this, not becuase I think Apple is perfect but becuase it's not logical. I'm surprised they lost this. It's technically correct to call the iPad 4G even though it does not connect to Telstra's version of 4G. It's not Apple's fault the global standard was expanded to inlcude wider range of speeds/technologies. But local telcos that have muddied the waters. I guess an argument could be made that Apple could have taken this local confusion into account, but the confision is not their creation.

      They (the court) didn't have to prove it was deliberate.
      Some people 'may' have been deceived but it was false advertising - like it or not.
      We have 4G services in Australia, correct? and the Ipad couldn't connect to the 4G services we have, correct?
      It has zero to do with world-wide 4G standards - sorry.
      So - false and misleading advertising in which some people 'may' have been deceived.
      Bottom line is Apple fucked up and now pays the price (oh so little)

      We have a different definition of '4G' than the rest of the world, as declared by the ACCC.

      Yeah I don't really get it either.

        "rest of the world"? Apple's "4G" tablets are only functionally 4G on very few specific telecommunications networks ANYWHERE in the world. You're speaking absolute nonsense in the context of this case.

      Advertising a tablet with the promise of 4G IS deliberately misleading if the country you're advertising it in has absolutely zero facility to accommodate it, regardless of "definitions".
      Of course they care about their reputation, but they did not care about the Australian market enough to bother protecting it here by changing their marketing. This is entirely the fault of Apple's Australian arm of operations- obviously not the company as a whole.

    Stuff it, not even going to bother although this is all shades of wrong.

    Sorry about the headline issue, all. Fixed now. Whether it's $2.25 or $2.25m, it's still comparable to vending machine money for Apple! Interesting thought though: has Apple suffered damage to its reputation as a result of this case?

      not so much damage to its reputation, but its been pulled in line.

      I imagine similar cases will occur in Europe, who have also raised complaints about the naming standard.

      Its a PR blow yes, but really shows that Apple isn't above the law (i.e no big US firms are above the law in other countries)

      Not really no. Many people in Australia bought the new iPad knowing it couldn't run 4G :D.

        People don't actually process what it means. I have seen people make the mistake that 4G connectivity on the iPad will work in Australia. I've seen a checkout chick at BigW make the mistake and I've corrected a number of customers myself. It's like when people come in and ask for an iPad, when they really mean tablet, suckered in by the branding and not the technical stuff behind it.

        And some may have been mislead. That's the entire point

      Hardly Luke, outside of Australia, I doubt any one tech savvy even cares. The penalty imposed was likely set so low that Apple wouldn't bother to appeal (and win) making this justice look like a bigger ass than he already is.. "sober reminder" ROFLSNORT!

        "The penalty imposed was likely set so low that Apple wouldn’t bother to appeal (and win)"
        LOL Bill, the penalty could have been $2000 and Apple would have appealed IF they thought they could win (i.e. to save face if nothing else) BUT they know they are in the wrong and they know they are very unlikely to win any appeal.

          Should they even win the right to an appeal in the first place. It's not a matter of just going to fight it out in court again, you first have to go to court to show that the original judgement is in some way flawed.
          Then can they finally appeal.

          There is no appeal. Apple came to an agreement with the ACCC on the fine. The judge just ratified it making sure it fits within the framework of corporate penalties.

        I should have added, If S. Jobs aggressive and public disdain for Android et'al wasn't enough to "damage" Apple reputation I somehow doubt some insignificant decision will make one iota of difference to the public

          the world doesn't revolve aroudn Apple. ACCC would have taken this action if it was MS or Google or whoever. They're just doing their jobs. Oh, and if you think this has zero influence to the public, then keep doing it Apple. Eventually you'll be like MS in the 90's

      Not even a little bit. See the comments on here.

      "entirely the fault of Apple's Australian arm of operations - obviously not the company as a whole"
      "Telstra's network is wrong on so many levels that it's hardly Apples fault"

      Apple doesn't have customers, they have fans. And those fans are rabid apologists who can't see Apple doing any wrong, it's probably a borderline psychosis. Hilariously enough, the only people taking a hit to their reputation here will be the ACCC and Justice Bromberg himself.

    Telstra FakeG is implemented as LTE-Basic (not LTE-Advanced) because that is all the Ericsson retards who supply Telstra's equipment had on offer (Telstra are locked in). Telstra FakeG operates on a non standard frequency because that was the spectrum Telstra already owned. The end result is a network that is not 4G, does not operate on a standard frequency, and requires custom handsets to be manufactured for it to work. Telstra's network is wrong on so many levels which is hardly Apple's fault.

      Guess that's the same "Fake" g as half of europe uses along with optus now (voda have fakeg as well, they just haven't turned it on). 1800 mhz LTE is very smiler to what the yanks have (700/2100 mhz LTE) just another band as we have yet to turn off analogue TV here to use the 700 mhz. Keep in mind everyone else managed to get a pretty good standard of either the 700 or 800 bands from TV and we fit in to the asian standard execution being the yanks who desided not to both working with europe and asia/pacific. They just made their own 700 band. There also is no LTE-A networks that I'm aware of and the iPad also uses fakeg LTE not the real LTE-A that doesn't even have real life production products.... Same thing happened with 1G and then 2G and 3G as well, multiple bands and sometimes completely different standards (CDMA vs GSM/UTMS etc). Just now with LTE there is like 10 bands rather than 4 or 5.....

    Can I just ask who gets the 2.25 mil. If the ACCC are meant to represent the consumer (heh.. who am I kidding) then who gets the money?

    I do not think that reputation or the fine would be the problem. What this decision does is it creates precedence for future lawsuits; which is a shot across the bow for Apple, who have built their company on great marketing.

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