Apple has been fined $2.25 million by the Federal Court for misleading “many hundreds of thousands” of consumers and business owners by claiming its latest iPad was compatible with Australian 4G-LTE networks.
In a judgement passed down this morning, Federal Court Justice Mordy Bromberg ruled that Apple’s ad slogan “iPad with WiFi + 4G” implied its iPad could connect with the Telstra LTE mobile data network in Australia, which it doesn’t.
Justice Bromberg fined Apple $2.25 million for this breach of Australian consumer law and ordered it to pay $300,000 in costs to the Australian Competition and Consumer Commission, which brought the case.
The judge said the fine was a “sober reminder” to Apple not to breach Australian consumer law, adding that “many hundreds of thousands” of people were misled by Apple’s “serious and unacceptable” 4G claims.
“Multinational corporations who operate and profit from the Australian market must respect that market and the laws which serve to regulate it and protect its participants,” said Justice Bromberg.
“Those who design global campaigns, and those in Australia who adopt them, need to be attuned to the understandings and perceptions of Australian consumers and ensure that representations made by such campaigns will not serve to mislead.”
“The penalty imposed in this case, needs to make that message clear.”
Justice Bromberg noted that Apple was made aware that its new iPad wasn’t compatible with Telstra’s 4G network in March this year but continued to run ads spruiking its 4G capabilities until May.
“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,” said ACCC chairman Rod Sims.
“The Federal Court has again recognized the need to protect consumers from misleading advertising in the telecommunications and related sectors.”
“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.”
The fine comes as small business owners are faced with an increasingly competitive tablet market, with Microsoft unveiling its plans this week and a new device from Google expected later this year.