Apple fined $2.29 million over “4G” iPad claim

By iAskTank • Apple, new iPad • 21 Jun 2012




Apple has bent the truth by advertising its iPad in Australia as having “4G” capability, thus misleading would-be buyers. For that, Cupertino has now been fined a whopping $2.29 million, Associated Press reports.

The case was brought by regulators shortly following the iPad’s release in Australia, when the company began advertising the tablet as “iPad with WiFi + 4G” though it cannot connect to Australia’s fourth-generation LTE network. Apple will also have to pay 300,000 Australian dollars in litigation costs…

Though the cellular version of the iPad 3 supports both 700MHz and 2100MHz LTE bands, Australia’s only 4G network run by Telstra operates in the 1800MHz band, thus leaving buyers to copy with 3G data speeds.

The regulators were adaamant that Apple needs to be taken to justice and fined mercilessly as a way of sending a warning to other big companies the world over.

Justice Mordy Bromberg said Apple misled the public and contravened Australian consumer law.

The conduct concerned was deliberate and very serious. It exposed a significant proportion of Australian consumers of tablet devices to a misleading representation.

The Australian Competition and Consumer Commission (ACCC) is pleased with the fine, arguing it reflects Apple’s size. They wrote in a statement the ruling serves as a deterrent to other companies thinking about bypassing local laws:

The $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.

This decision should act as a renewed warning that the ACCC will continue to take action against traders who take risks in their advertising, regardless of their size.

Though Apple settled the case with the ACCC earlier this month, Bromberg delayed an official ruling until he had details on how many iPads had been sold and were returned under the refund offer and further information on Apple’s financial position.

Apple now markets the “4G” iPad 3 abroad simply as “Wi-Fi + Cellular”.

Much of the blame for such a misstep goes to senior vice president Phil Schiller who oversees all of Apple’s marketing the world over, including advertising budget that will hit nearly $1 billion this year.

Schiller also approved Apple’s over-the-top Siri commercials, including latest celebrity adverts starring actor John Malkovich which have been met with “mockery in some circles”, according to a Bloomberg profile.

There’s no escaping the fact that Apple’s advertising practice outside North America was stretching the truth, to put it mildly.

Promoting the new iPad as having “4G” capability whereas it would only work on 3G networks outside North America is clearly misleading and Apple should be called on it, don’t you think?


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