OK, we did mislead: Apple force to cough up $2.25 m for iPad + 4G false advertising.
The case, heard in Federal Court in Sydney today, follows a prolonged battle between the consumer watchdog and Apple over what the ACCC branded as “misleading” and “false” ads for “iPad with Wifi + 4G”, which claimed was 4G compatible, when in fact it worked on 3G networks, only.
After denying it had mislead Australians, it has now agreed to pay over a $2 million fine and costs to the ACCC, which amount to $300,000, and admit it did mislead consumers.
“Apple’s use of the descriptor ‘4G’ mislead consumers because it suggested to Australian consumers that the product could, with a SIM card, connect to a 4G mobile data network in Australia, when this is not the case,” an ACCC spokesperson told SmartHouse.
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The giant previously denied it has mislead consumers and provided undertakings to the Federal Court to do ‘certain things’ to remedy the situation, including publish a clarification and offer refunds to mislead consumers, but continued to use the descriptor ‘4G’ in advertisements until recently.
The iPad only works on ultra fast 4G networks in the US.
The Lawyer for the ACCC, Colin Golvan SC, said the “substantial” penalty would send a message to the computer industry “that such conduct will not be condoned”, reports The Australian.
But Judge Mordy Bromberg at the Federal Court today appeared to have a number of concerns over the case, and complained of not being informed of all the facts including the number of consumers affected by the “false” ads.
“At the moment on the agreed facts you put before me, I have no idea whether a consumer who bought the iPad, thinking it could connect to 4G but then realising that it couldn’t, has been impacted in any way.”
The Judge has yet to approve the settlement and the case is still ongoing in court today.
Previous reports indicated not a single consumers who bought the offending iPad 4G had returned the device to Apple store or reseller, despite Cupertino’s offer of a full refund.