ACCC seeking heavy penalties in court date with Apple over 4G claims

The ACCC will tomorrow lodge an application to the Federal Court in Melbourne against Apple’s local subsidiary for “alleged contraventions of Australian Consumer Law” stemming from the marketing of Apple’s new iPad Wi-Fi + 4G which, as this site as pointed out several times, is not 4G capable.

“The ACCC alleges that Apple’s recent promotion of the new ‘iPad with WiFi + 4G’ is misleading because it represents to Australian consumers that the product ‘iPad with WiFi + 4G’ can, with a SIM card, connect to a 4G mobile data network in Australia, when this is not the case,” said an ACCC spokesperson.

Confusion surrounding the name of the new iPad Wi-Fi + 4G in Australia surfaced as soon as it became clear that the US version, which can connect to 4G networks in the US and Canada, was not compatble with Telstra’s 4G LTE network. Although Apple originally seemed undeterred by this confusion, it later changed its description of the product in press materials, as revealed by Digital Retailer, though it has not changed the name of the new device.

The ACCC reports it is seeking “urgent interlocutory relief to ensure consumers are made aware of the correct technical capabilities of this device”. If granted, this will most likely take the form of a sticker that Apple and its retailers will have to apply to packaging, carrying text such as “This device is not 4G capable”.

Furthermore, the ACCC is seeking injunctions, pecuniary penalties, corrective advertising and refunds to affected consumers.

If the ACCC is successful, Apple could be forced to stop selling the device altogether until it can produce new packaging and a new name for the tablet, while corrective advertising normally takes the form of a tiny ad buried deep in The Australian newspaper (the least read national daily). The pecuniary penalty, however, could be substantial, considering the million-dollar fines recently levied at Harvey Norman and Optus.

“Consumers who have purchased or are considering purchasing an ‘iPad with WiFi + 4G’ should ensure that they have a proper understanding of the mobile data networks which this iPad can directly access by a SIM card,” concluded the ACCC.

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