Apple fined $2.25m in Australia, as penalty for misleading 4G iPad ads is approved

Apple’s proposed AU$2.25 million fine for misleading Australian consumers with advertising for its 4G-compatible iPad has now been approved by the judge in charge of the trial, just two weeks after being tentatively accepted by Apple.

The suit was brought by the Australian Competition and Consumer Commission (ACCC) in March, when the watchdog claimed that Apple deliberately advertised the 4G compatibility despite knowing that the third-generation tablet did not support LTE networks in the country.

The duo agreed on the pay-out earlier this month, and the court has now ratified the amount after concluding that Apple’s marketing materials implied “that an iPad with WiFi + 4G could connect directly to the Telstra LTE mobile data network in Australia, which it could not do,” according to a Reuters report.

In May, Apple announced that it would provide refunds to any customers that felt misled by the advertising and marketing, which was changed in Australia — and other markets across the world — after the concerns were highlighted by the ACCC.

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Apple updated the marketing copy on its website to include a clarification over LTE compatibility in North America:

The iPad with Wi-Fi + 4G model can roam worldwide on fast GSM/UMTS networks, including HSPA, HSPA+, and DC-HSDPA. 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.

Australian Operators Telstra and Optus moved faster than Apple following the concerns, and began informing their consumers of the lack of support for 4G in Australia. Optus remove all mentions of the term altogether, whilst Telstra said: “We’re making it clear to our customers that new iPad does not run on 4G LTE networks in Australia.

The lack of clarity around the marketing of the 4G compatibility was also closely scrutinized in New Zealand, the UK, Italy and Sweden among other countries.

Update: The ACCC has made a statement that includes the following comment from its chairman Rod Sims:

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.

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.

Image via Flickr / Juditk