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  • Blog, Gadgets - Written by on Friday, June 8, 2012 18:09 - 17 Comments

    Apple agrees $2.25m iPad 4G fine

    blog From the Department of Technology-related Parking Fines comes the news that Apple has agreed to pay $2.25 million in penalties to the Australian Competition and Consumer Commission for falsely marketing its new iPad tablet as being capable of 4G mobile broadband speeds in Australia.

    Most of the nation’s major technology media outlets have reported the news from the Federal Court this morning; including The Australian, The Financial Review, ZDNet.com.au, iTNews and so on. However, according to SBS, the matter may not be settled as quickly as the ACCC and Apple might like. The media outlet reported today:

    “Justice Bromberg said there were three matters on which he would like more information … the financial position of Apple, the number of sales of its new iPad, and the difference between Telstra’s 3G network and the 4G network.”

    To your writer, a $2.2 million fine appears fairly ridiculous in the larger context of the issue, given the fact that Apple made some $4.88 billion in revenue from Australia in the past financial year. $2.2 million, in that context is less than a blip on Apple’s radar; and it’s certainly not a disincentive to do the same thing again. We’re talking about pocket change here.

    However, as I’ve previously also written, there have been questions raised about this issue from the start of the legal process. Why, for instance, is the ACCC still pursuing Apple over the issue, when Apple has already agreed to give anyone who complains about its new iPad (of which we expect there will be almost nobody) a refund, and modified its 4G marketing materials quickly, as soon as it became apparent the wording was an issue? The whole issue seems like the regulator is making a mountain out of a molehill. I think Apple is probably being too nice to the ACCC on this one, in agreeing to pay a fine at all. Perhaps the amount it’s agreed to be fined is merely less than the cost of its legal team having to seriously fight the case.

    Image credit: Apple

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    1. Posted 08/06/2012 at 6:11 pm | Permalink |

      “Justice Bromberg said there were three matters on which he would like more information … the financial position of Apple, the number of sales of its new iPad, and the difference between Telstra’s 3G network and the 4G network.”

      I also wanted to note that I can answer these three questions for Bromberg right here and now. The answers are, respectively: A metric shit-tonne, or, converting to the old system, an imperial assload; stinking rich and quite possibly the richest company in the world; and about 20Mbps, 30Mbps on a good day.

      • Posted 08/06/2012 at 9:14 pm | Permalink |

        Imperial assload…..hmmm, I’m sure I remember seeing that conversion on an app in my phone… :D

        Seriously though, it may weel be a mountain/molehill scenario. Bu tI, for one, am happy to see the ACCC make that mountain out of Apple. They have some of the WORST marketing nonsense in this country and just assume because they’re big and we’re small they can get away with it. Not that others don’t.

    2. Posted 08/06/2012 at 6:14 pm | Permalink |

      like previously unlimited ADSL BS, I think it’s awesome to see the ACCC
      cracking down on such claims, as a market leader, they deserve to be held
      to the highest standards

      BTW Just how much tax did Apple pay on the $4.88 Billion?

    3. Clinton
      Posted 08/06/2012 at 6:22 pm | Permalink |

      it’s about this time that the ACCC is kicking themselves for not making the fine higher.

      • mr3oh7
        Posted 09/06/2012 at 11:46 pm | Permalink |

        anytime your first offer gets accepted without problem means you are too high/low

    4. Posted 09/06/2012 at 2:40 am | Permalink |

      “…when Apple has already agreed to give anyone who complains about its new iPad (of which we expect there will be almost nobody) a refund…”

      Cant exactly give them credit for this considering Australian consumer law states that if a product doesnt perform to its description you are entitled to a refund.

      Frankly I think Apple deserves every bitchslap that they have coming to them. wWther the specific situation is justified or not, they have worked up a lot of bad karma with their patent trolling bullshit, and I am over it. Yeah i don’t like Apple.

    5. Stephen
      Posted 09/06/2012 at 12:09 pm | Permalink |

      The ACCC is by no means making a mountain out of a molehill. When the richest company on Earth feels that it can lie to consumers and get away with a warning, we have a problem.

      And Apple was lying – this cannot have been unintentional, they are fully aware of what bandwidths are used in different markets.

      This deserves more than a $2.25m fine – penalties should be something the company actually wants to avoid, rather than a cost centre.

      • Gwyntaglaw
        Posted 10/06/2012 at 11:31 am | Permalink |

        Yes, Apple did itself no favours with its marketing here. The 4G label was confusing and possibly misleading.

        But “lying”? I don’t know. What we know: Telstra slapped a “4G” label on its network. Some dispute that their network is truly 4G, just as the US networks calling themselves “4G” are probably not 4G either.

        Is Apple lying because its definition is different from Telstra’s; both of which stand some way off from the ITU definition?

        • seven_tech
          Posted 10/06/2012 at 11:48 am | Permalink |

          True to a certain extent Gwyntaglaw. However, Telstra’s LTE is A LOT closer to LTE advanced (what is actually 4G by ITU standard) than AT&T’s HSPA-DC that their iPhone shows as 4G. And this is the ONLY network that calls HSPA-DC it such in the world.

          I think its reasonable to say they lied. I mean come on, this company would know ALL sorts of confidential things about telcos worldwide, let alone the simple fact their frequencies aren’t compatible. It is simply misleading. They already knew, but tried to pass it off anyway. Sorry not on.

          • Posted 10/06/2012 at 3:26 pm | Permalink |

            In my opinion (and I looked at the pages in question), Apple clearly stipulated that access to the 4G speeds would be dependent upon what country you were in, through what carrier etc.

            • Posted 11/06/2012 at 1:55 pm | Permalink |

              That’s true Renai and I know Apple made that defence. However, the rebuttal made by the ACCC, which I think is valid too, is that the AVERAGE consumer doesn’t know what frequency 4G uses. It is therefore misleading of Apple to say it is 4G AT ALL in this country seeing as there is NO 4G capable of using the iPad here currently.

              I guess it comes down to: Yes, you put it in the T’s&C’s, usually down the bottom or with an asterix to point to it….but REALLY, how hard would it’ve been to simply change it and say “Not compatible with Aust. 4G frequencies”?

              It’s admission of limitations by proxy, not by default. I don’t think that is fair marketing behaviour.

              • Bill
                Posted 12/06/2012 at 12:04 pm | Permalink |

                Completely agree – definitely not mountain out a molehill. The ACCC is set up to pursue claims against companies that contravene the Trade Practices Act, as Apple has done here. Thanks to the ACCC’s action, the average consumer should now be better informed about Apple’s iPad and its capabilities. One hopes that the average consumer will now look deeper next time the Apple marketing department start throwing terms like 4G around!

                • Bob
                  Posted 12/06/2012 at 1:07 pm | Permalink |

                  Bill, the point about consumer legislation which Apple seems to have ignored, is that the average consumer should be able to believe the advertising.that is sprayed around without having to dig deeper. Tricky specs buried deep to obfuscate are not the way to go.

    6. Bob
      Posted 09/06/2012 at 12:31 pm | Permalink |

      If I recall correctly, Apple did not go quietly until it was obvious that they had to cave. They had the lawyers argue (in court?) that yes, it did not use Telstra 4G frequency bands but it did use 3.5G and in many parts of the world that was considered to be as fast as or as good as 4G and even advertised as 4G. lt tried bs tactics. They deserve a much bigger fine. It may be interesting what the judge says. The ACCC and the Apple lawyers may have agreed but it is still up to the judge to decide what he wants and I hope he decides on a much bigger penalty.

      footnote: I am a techo and the Apple advertising had me believing that they could doTelstra 4G. I also had no intention of buying the iPad3 so I did not research it as there was no need.

    7. Rhys
      Posted 12/06/2012 at 7:47 am | Permalink |

      Why say 2.2 mil is to little then say why is the ACCC following this up at all? I think that 2.2mil is fair concidering that the customers have full rights to refund if they feel they were miss-informed. Clear cut to me

    8. TallyHo
      Posted 21/06/2012 at 9:33 pm | Permalink |

      Telstra FakeG is implemented as LTE-Basic (not LTE-Advanced) because that is all the Ericsson retards who supply Telstra’s equipment had on offer (Telstra are locked in). Telstra FakeG operates on a non standard frequency because that was the spectrum Telstra already owned. The end result is a network that is not 4G, does not operate on a standard frequency, and requires custom handsets to be manufactured for it to work. Telstra’s network is wrong on so many levels which is hardly Apple’s fault.

      • Posted 22/06/2012 at 6:03 am | Permalink |

        Tallyho, I’m sorry, but it is short-sighted and actually quite incorrect to call Telstra’s 4G non-standard. Do you know how many frequencies there are in the US for 4G? 700, 1700, 1900, 2100, 2500. And how many of these are supported on the ‘new’ iPad? 700 and 2100. And THAT isn’t counting AT&T’s ’4G’ which is bloody HSPA+DC! Telstra would be hauled over the COALS for calling HSPA ANYTHING 4G, considering it is a DIRECT extension of spread spectrum 3G technology, which is SPECIFICALLY discluded from 4G definitions. Telstra’s 4G-LTE, while not full blown LTE-A, IS considered 4G by the ITU definition as it is down the same path significantly to LTE-A, UNLIKE HSPA+DC.

        Know what frequencies Europe uses as well as some of theses listed? 800 and 2300…..and the iPad was marked 4G over there till the UK made a fuss AFTER the ACCC.

        There IS no standard frequency for 4G, although 700 is getting to be the most popular, as in most countries the analogue TV spectrum is 700 and they’re being switched off the world over.

        Apple marketed this as 4G. It is NOT compatible with the VAST majority of 4G networks on the planet, but it IS with 2 bands and 3 companies, JUST in the US. Apple is a US company and, in this instance, almost appear to have adopted your average US attitude- the US IS the world, everyone else is behind.

        Their attitude is wrong, arrogant, deceitful and simply should never have been allowed, as it was not, here, first.

        I fail to see how ANY of this is Telstra’s fault.

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