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  • Gadgets, News - Written by on Wednesday, March 28, 2012 12:57 - 16 Comments

    In court: Apple offers refunds to iPad buyers

    in brief Iconic technology giant has reportedly offered to refund any Australian customers who bought its new iPad tablet under the misapprehension that 4G network speeds were available in Australia, in a preliminary hearing in Melbourne this morning, after the national competition regulator filed a lawsuit over what it called ‘misleading’ advertising in the area.

    Late last night the Australian Competition and Consumer Commission revealed it would take Apple to the Federal Court today for alleged contraventions of consumer law for falsely advertising the 4G speeds locally. This morning, several outlets including The Sydney Morning Herald and The ABC reported that Apple had told the court it would be happy to take corrective action to resolve any customer issues in the area. According to the SMH (click here for the full article), a lawyer representing Apple said:

    … the company is prepared to email customers to say the device was not compatible with the Telstra 4G network. Apple, the world’s most valuable company, is willing to offer a refund to any customer who believed they had been misled by references to 4G, he said.

    The ABC reported (click here for the full article):

    Apple has agreed to publish a clarification that states the product supports ultra-fast mobile networks but is not compatible with the Telstra network.

    One of the key features of the new iPad is support for 4G speeds, which will allow users in countries such as the US and Canada to access the Internet much faster than the traditional 3G mobile broadband speeds which have become very widely used internationally over the past half-decade.

    However, the 4G speeds which the new iPad supports will not be available in Australia, with Apple’s technical specifications page only listing it as supporting the 700Mhz and 2100Mhz spectrum bands, neither of which are being used in Australian telcos to provide 4G services. Telstra and Optus’ existing 4G rollouts are based on the 1800Mhz spectrum, although Optus is also planning a rollout in the 2.3GHz band. 4G is a term used to describe the next generation of wireless broadband services, which will allow speeds up to levels such as 100Mbps — far beyond the current generation of 3G services.

    The case continues.

    Image credit: Capcom/Nintendo (Phoenix Wright: Ace Attorney video game)

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    1. Posted 28/03/2012 at 1:17 pm | Permalink |

      It wasn’t that long ago that Harvey Norman advertised 3D TV’s for people to watch the football in areas where 3D broadcasts were unavailable. They received something like a $1M fine from memory.

      This Apple case is pretty much the same as that, so it wouldn’t shock me if they cop a decent fine for false advertising.

    2. Posted 28/03/2012 at 1:48 pm | Permalink |

      and yet it didn’t stop idiot media outlets proclaiming faster internet speeds with the new ipad in australia.


      every time i heard a tv channel going on about how the new ipad will be able to take advantage of new 4g speeds in australia, i felt like smashing my tv!

      • Posted 28/03/2012 at 1:56 pm | Permalink |

        Um, which media outlets claimed 4G was possible in Australia with the new iPad? I didn’t see any.

        • Posted 28/03/2012 at 4:24 pm | Permalink |

          channel 7 and channel 9 both ran stories on this exact topic.

      • Ron
        Posted 28/03/2012 at 1:57 pm | Permalink |

        Check out last Monday’s Media Watch on iView just to see how uncritical the media was (including the ABC) and how it encouraged the Apple hype.

      • djos
        Posted 28/03/2012 at 2:24 pm | Permalink |

        It is faster that the iPad2 as it supports Dual band 3G HSPA+ which is marketed by some OS telco’s as 4G (eg AT&T).

    3. Goku Missile Crisis
      Posted 28/03/2012 at 2:09 pm | Permalink |

      I thought the most interesting part of the Apple lawyer’s statement (quoted by SMH) was this:

      “[U]ltimately at trial, it will be contested by Apple there are in Australia networks – that according to international definitions are 4G – are properly described as 4G… what Apple says is that other networks operated by Telstra are in fact properly described by international standards as 4G even though Telstra itself does not so describe them.”

      I can’t think of a much more disingenuous argument than that. The “international definitions” to which he refers are purely marketing definitions, just as much as the label 4G is for their own device. It makes no sense to say the 4G tag refers to Telstra’s high-ish speed offering. That’s not something they’ve claimed before and they never would have done so without Telstra first making the claim.

      • Gwyntaglaw
        Posted 28/03/2012 at 4:54 pm | Permalink |

        Yes, I can see the lawyers lining up to argue what is and is not a 4G network…

        I think that the ACCC, rather than get bogged down in a never-ending debate over marketing vs tech speak, will give Apple a slap on the wrist, demand a slightly more succinct “clarification” with Apple advertising, and leave it there with a stern admonition that they will look more closely in future to marketing of this kind.

        I doubt that the return rate on these grounds would even make 1% of total sales – not a big hit.

        • Goku Missile Crisis
          Posted 29/03/2012 at 12:04 pm | Permalink |

          Agreed on all counts.

          I like the comparison Tezz makes above to the Harvey Norman case, but as far as misleading advertisements go, this is nowhere near that level.

    4. Cam
      Posted 28/03/2012 at 9:45 pm | Permalink |

      Wonder how many people will take up the offer.

    5. Posted 29/03/2012 at 3:13 pm | Permalink |

      This is all about what a reasonable consumer would find misleading, especially in regards to the marketing push on 4G that is currently being undertaken by Telstra (and soon others).

      Apple to the normal non Technically inclined user is stating falsely that 4G is available on the new product. The ACCC has a mandate that if this is a false statement to have this corrected in such a manner that the offenders are held responsible for educating and informing their current and future customers of the falsehood and to offer a refund, or if available replacement.

      For the ACCC not to do this to Apple, would be inequitable in the extreme to any other company. Even more so when looking at the facetious statement by Apple’s lawyers that “Apple,[is] the world’s most valuable company”. That will NOT be taken well by any court

      In my opinion this is a perfect opportunity for any of the other manufacturers who actually do offer a 4G product, or will in the foreseeable future (unlike Apple) to initiate a marketing campaign like “Get the newest 4G Tablet that will actually work in Australia for X $’s less on production of a a statement showing you got a refund from your iPad off Apple”. Apple mightn’t like it, the socio-religious like Apple diehards will cry in rage to the heavens, but it might be better than any fine the ACCC via the courts ever impose.

      • djos
        Posted 29/03/2012 at 3:23 pm | Permalink |

        The problem is that the International standards body will let you describe Dual Band 3G as 4G (see AT&T is the USA) and Telstra do support Dual Band 3G on their network. While the iPad2 doesnt support Dual Band 3G, the iPad3 does and so “technically” does support 4G in Australia.

      • djos
        Posted 29/03/2012 at 3:25 pm | Permalink |

        PS. even Telstra 4G isnt really 4G, It’s really pre-4G as it doesnt support 100mbps-1Gbits speeds as descibed by the standards body.

        see this article: http://www.businessspectator.com.au/bs.nsf/Article/ACCC-iPad-Apple-4G-LTE-network-Telstra-sprectrum-U-pd20120328-ST8C2?opendocument&src=idp&utm_source=exact&utm_medium=email&utm_content=26613&utm_campaign=kgb&modapt=commentary

        • Posted 29/03/2012 at 3:52 pm | Permalink |

          I understand all that, and so do anyone else with a technical/electronic background but this is not what the reasonable consumer understands.

          All they understand is what they are told in puffery voiced advertisement from media outlets and companies. They trust the telcos to create something that is faster, newer, better. They then trust that the manufacturers will produce and sell them this new fangled technology that will serve their purpose in the way that they trust that it will. Whether it is technically factual and splitting hairs is irrelevant to the act.

          Apple have stated in their advertisements that it does something within Australia that in fact it does not. That is false and misleading. Not only this, but Apple by their own admission are stating they knew this and are now trying to play the innocent, and the “oh we have the most money and we can do no evil” card.

          I think this could, and most likely will in the short term, cause them a major trust problem with the standard Australian consumer who doesn’t really care who or what Apple is, or about their philosophy. All they care about is will this thing they spent hard earned cash on do what it states on the packaging.

    6. TallyHo
      Posted 31/03/2012 at 3:10 pm | Permalink |

      The ACCC should be charging those Telstra and Ericsson retards for misrepresentation by not building a network that is actually 4G.

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