Apple marketed its new iPad as “4G,” but this strategy took a wrong turn in Australia. To settle issues in the country, the tech giant will pay a fine of AUS$2.25 million for misleading customers. An Australian federal court held a hearing on Friday, June 8, where Apple agreed to pay the fine, as well as commission costs of AUS$300,000, just roughly two months since the new iPad’s launch.
The settlement reached on Friday follows a complaint filed by the Australian Competition & Consumer Commission (ACCC) over Apple's marketing of the third-generation iPad's wireless capabilities. The ACCC had alleged that the company's promotion of the new iPad as offering WiFi+4G in Australia is "misleading because it represents to Australian consumers that the product 'iPad with WiFi+4G' can, with a SIM card, connect to a 4G mobile data network in Australia, when this is not the case."
Clarifications
The third-generation iPad's 4G/LTE capabilities are, indeed, only supported by Verizon and AT&T in the United States, and on Bell, Rogers, and Telus in Canada. Outside of these networks, the new iPad simply uses 3G to send and receive data. It is not compatible with 4G networks in Australia. Apple tried to solve this confusion by putting stickers on its iPad boxes in some countries, and adding this message in Australia: "IMPORTANT NOTE: This product is not compatible with Australian 4G LTE networks, and will only operate at up to 3G speeds in Australia." Apple also put up a warning on the Apple online store, aiming to clear any confusion.
"The iPad with Wi-Fi + 4G model can roam worldwide on fast GSM/UMTS networks, including HSPA, HSPA+, and DC-HSDPA," read the company's warning on the online Apple store. "When you travel internationally, you can use a micro-SIM card from a local carrier. You can also connect to the 4G LTE networks of AT&T in the U.S. and Bell, Rogers, and Telus in Canada."
Misleading Consumers
Despite such efforts from Apple, however, the ACCC cited sections of Australian Consumer Law regarding false or misleading representations about products using a "particular standard" or have "performance characteristics" that they do not actually deliver. Initially, Apple attempted to offer refunds to Australian consumers who felt they were misled in buying the new iPad, believing it had 4G/LTE support in Australia as well.
"The term 4G when used in Australia is used exclusively to describe LTE networks and WiMax," said Colin Golvan, a lawyer for the commission, as cited by the Wall Street Journal. According to him, consumers saw Apple's 4G marketing for the third-generation iPad and assumed it would work with Australia's Teltra LTE network, so they purchased the iPad with this capability in mind, when otherwise they would not have bought it.
The judge in the case has yet to approve the terms of the agreement, but when it is finalized Apple will likely change its Australian marketing of the new iPad to say "WiFi + Cellular," like it already has in several countries.
