Apple deliberately misled Australian consumers when it claimed its latest iPad was compatible with the high speed 4G broadband network, a judge has found.
The technology giant put its desire for global marketing uniformity ahead of the rights of Australian consumers, Federal Court justice Mordy Bromberg said today.
Justice Bromberg fined Apple NZ$2.86 million and ordered it pay NZ$381,700 court costs after the company admitted breaching consumer law in its marketing of the new iPad.
Apple and the Australian Competition and Consumer Commission (ACCC) had jointly agreed to the penalty.
Apple admitted that between March 8 and May 12 it used the words "iPad with WiFi + 4G" while promoting the product on its website and in stores.
Justice Bromberg said the words misled consumers into thinking they would be connected to the Telstra 4G network.
"The conduct concerned was deliberate and very serious," he said in his judgment.
"It exposed a significant proportion of Australian consumers of tablet devices to a misleading representation."
The "iPad with WiFi + 4G" slogan was part of a worldwide marketing campaign.
Justice Bromberg said the risk of contravention of Australian consumer law would have been "reasonably obvious" to those at Apple familiar with the Australian market's understanding of the term 4G.
"In that context, and in the absence of any other explanation, the facts to which I have just referred, suggest that Apple's desire for global uniformity was given a greater priority than the need to ensure compliance with the Australian consumer law," he said.
"Conduct of that kind is serious and unacceptable."
Justice Bromberg said while he harboured concerns that the financial strength of Apple diminished the meaning of the penalty, he did not believe any further transgressions from Apple were likely.
It is not possible to know how many consumers were misled by Apple's use of the term 4G, but he said he had no doubt "many purchasers will have felt decidedly short-changed".
In a statement Apple said it had decided to use "Wi-Fi + Cellular" to describe the high-speed networks supported by the new iPad.
"The new iPad supports many high-speed networks around the world, including LTE in the US and Canada and HSPA+ and DC-HSDPA in many countries," it said.
"Carriers do not all refer to their high-speed networks with the same terminology, therefore we've decided to use 'Wi-Fi + Cellular' as a simple term which describes all the high-speed networks supported by the new iPad."
The ACCC welcomed the penalty and said it was a warning to other companies.
"The NZ$2.86 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," ACCC chairman Rod Sims said in a statement.
"The Federal Court has again recognised the need to protect consumers from misleading advertising in the telecommunications and related sectors."
Family counts blessings after superbug scare (graphic content)
Do you dual screen?Related story: (See story)