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Apple found to have misled customers over 4G claims, fined $2m

Apple has been fined $2.25 million after the Federal Court found it had misled consumers by advertising its new iPad as being compatible with the Australian 4G network.

The Australian Competition and Consumer Commission began court proceedings in March, alleging that Apple had contravened Australian Consumer Law.

“I have no doubt that given the promotion by Telstra of the superiority of its 4G network, many purchasers will have felt decidedly short-changed, despite the fact that only a very small percentage took up the opportunity of a refund,” Judge Bromberg stated in his ruling.

The term ‘4G’ is familiar to Australian consumers, with Telstra launching its Long Term Evolution mobile data network in September 2011 and promoting it as a ‘4G’ network.

Telstra was the only carrier to use an LTE network commercially during the relevant period, with no other Australian carrier using the term ‘4G’ to describe any network which operates on HSPA, HSPA+ or DC-HSDPA networks, which are referred to as ‘3G’ networks.

The court found that Apple had used the product designator “iPad with Wifi + 4G” to refer to a device which couldn’t directly connect with the only commercially available mobile data network understood by Australian consumers to be a 4G network.

It was found that Apple was aware that the iPad wasn’t compatible with Telstra’s LTE network, with the matter being raised with Apple as early as March 8 this year.

However, Judge Bromberg stated “there is no evidence before me as to any actual loss or damage caused to consumers or to Apple’s competitors”, with Apple displaying a statement on its website and in stores advising customers about the incompatibility with the 4G network by early April.

This was taken into account as “an ameliorating factor to the severity of any penalty”.

As well as the fine, Apple has also agreed to pay $300,000 towards the cost of the ACCC’s legal costs.

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