4G

Apple fined $2.25m in deliberate 4G hoodwink

A court ruling has closed Cupertino's run in with the ACCC, and Apple is left with a fine and footing the bill.

Federal Court Justice Mordy Bromberg delivered his judgment in the dispute between Apple and the Australian Competition and Consumer Commission (ACCC) today. The ruling leaves Apple with a $2.25 million fine and an order to pay $300,000 in costs.

In his judgment, Justice Bromberg cited the deliberate nature of Apple's conduct, and the fact that the company did not desist from promoting its new iPad as "WiFi + 4G" when the ACCC raised its concerns as reasons for the fine.

"In my view, the risk of a contravention of s33 of the ACL [Australian Consumer Law] was reasonably obvious, and must have been recognised as substantial by those within Apple familiar with the Australian market's understanding of the term '4G'," Justice Bromberg wrote.

"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 ACL.

"Conduct of that kind is serious and unacceptable."

Justice Bromberg said that he had taken into account the actions of Apple to display a statement on its website and at points of sale that stated that the iPad is not compatible with Australian 4G networks.

Writing about the size of the fine, Justice Bromberg said that it is neither manifestly inadequate nor manifestly excessive, but expressed concern that the size and financial strength of Apple diminishes the impact of the penalty.

"The fact of the litigation and the media attention which it has drawn will no doubt be a sober reminder to Apple, and others who rely on their brand image that, as well as a penalty, there will likely be an intangible cost involved in a contravention of the ACL," he wrote.

Both Apple and the ACCC had agreed to the size of the fine two weeks ago.

The full judgment is available here.

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Some would say that it is a long way from software engineering to journalism, others would correctly argue that it is a mere 10 metres according to the floor plan.During his first five years with CBS Interactive, Chris started his journalistic advent...

10 comments
mjbsmith
mjbsmith

Yes Apple should be fined - but what about the Australian telcos? Apple are in trouble because the iPad's 4G functionality won't work in Australia. The reason for this is that the services advertised as 4G in Australia aren't really 4G, as the rest of the world understands it. The Australian telcos are every bit as misleading as Apple.

Aspiration Images
Aspiration Images

I understand Apple offerred a full refund to anyone who felt they had mislead when this first became "news". I am not aware how many took up the offer but I'd say very few. 20Mb/s of 3G is probably fast enough for most tablets and faster than they would get on 4G in the states probably anyway. So in answer to the other question it is funding the ACCC to do whatever it does.

CharlieSpencer
CharlieSpencer

"Writing about the size of the fine, Justice Bromberg ... expressed concern that the size and financial strength of Apple diminishes the impact of the penalty." Heck, their lawyers will get more than that.

khiatt
khiatt

So the 300K is probably court costs and legal fees, but what happens to the 2.25mil? Does this go to the government, or will it actually be given back to the people that were "duped" into buying something that wasn't all it was supposed to be? I would expect the customers to get a refund of the difference between the prices of the units with 3G and with 4G, then whatever is left over, should be evenly divided amongst those same customers as an "inconvenience" charge. My guess is that would come out to more than what they paid for the iPad in the first place. I don't think it's an excessive fine, it has to be enough to get the point across, I just don't like knowing that it will probably go into some slush fund to be wasted by bureaucrats on ridiculous things that don't benefit anyone.

yodi.collins
yodi.collins

LOL easier to ask for forgiveness later, right?

Deadly Ernest
Deadly Ernest

and Australia is in the middle of a major change of publicly used frequencies as there was, for many decades, no international guides or standards on what frequencies to use for what and what command signals to use. Many countries made their own decisions in the past, and when a few were set is was common for the US hardware manufacturers to go their own way and then ignore the rest of the world except to demand they follow the US lead. This has, in the past, led to a number of technology mismatches like US dial up modems that only work in Australia if you set them to NOT listen for a dial tone as the countries used different codes for them. The wireless frequency issue is being cleaned up by the government changing laws and moving users around, but it takes time. It also doesn't help to have the hardware manufactures screw over the users by changing the frequencies they want to use and thus force hardware changes to have different networks.

Deadly Ernest
Deadly Ernest

that they did NOT provide. People updated to go from 3G to 4G but didn't get it as the phones did NOT work with the Aust 4 G network.

hippiekarl
hippiekarl

the following note: that Apple and the judge had *agreed* on the fine's size. Given the mention of the ratio between Apple's "financial strength" and the fine's (miniscule) percentage of it, I'm reminded that I've been fined here and there over the years---sometimes two month's worth of my 'financial strength' (and not for anything as egregious as, say, lying to a populace for profit; my fine--two months worth of my 'financial strength' at the time--was for, as a taxi driver, passing on a double yellow line in the course of my business). The judge sure never asked me whether I *agreed* to the fine's size.... I can only wonder whether Apple would've 'agreed' to a fine of, say, two month's worth of THEIR revenue. They could have been made to feel the same 'impact of the penalty' as the rest of us.

Deadly Ernest
Deadly Ernest

a national charity as they couldn't identify the all the end users so affected.

Chris Duckett
Chris Duckett

The ACCC has raked in millions this week from Apple and TPG.