Did the court declare Telstra's LTE as 4G?

Apple was found to have misled consumers in Australia with the "4G iPad" label, but the question remains: does this case now set the standard for 4G in Australia?

(Credit: CNET)

Apple will hand over $2.25 million for claiming that the new iPad was 4G, despite the fact that it cannot operate on Telstra's long-term-evolution (LTE) or "4G" network.

But does this mean that the court has mandated that Telstra's 4G is true 4G?

Not really, but it has declared that Telstra has set the tone for what customers expect from 4G.

The International Telecommunications Union (ITU), which declares mobile standards, has described what it expects from 4G services, but has yet to declare that LTE networks like Telstra's meet the standard for 4G.

Bromberg's ruling essentially focused on the notion that because Telstra has marketed its LTE as 4G within Australia, that's what people are expecting:

No Australian carrier uses the term "4G" to describe any network which operates on HSPA, HSPA+ or DC-HSDPA networks. Those networks have always been referred to by Australian carriers as "3G" networks. Apple has also referred to those networks as "3G". Since the launch of Telstra's LTE network, Telstra has extensively promoted that network as a "4G" network, which supports substantially faster download and upload speeds, as well as providing a more responsive internet connection, as compared with those provided by "3G" networks.

So, Telstra getting in early and marketing LTE as 4G has set the standard in Australia.

Justice Mordy Bromberg said that Apple would have been aware that this is how 4G was already being marketed in Australia by Telstra when it launched the new iPad, yet it still decided that keeping the iPad labelling consistent was more important than having accurate advertising. He said that this conduct was "serious and unacceptable".

"[It] suggests that Apple's desire for global uniformity was given a greater priority than the need to ensure compliance with [Australian Consumer Law]," he said.

"Multi-national corporations, who (through their subsidiaries or otherwise) operate in and profit from the Australian market, must respect that market and the laws which serve to regulate it and protect its participants."

How exactly do you punish a company as big as Apple? A fine of $2.25 million is probably what CEO Tim Cook can find down the side of his sofa. Nevertheless, Bromberg said that a strong message through a substantial penalty is required for Apple's actions. He admitted that it is fairly fruitless, mind the pun:

I harbour a concern that the size and financial strength of Apple diminishes the meaningfulness of the penalty proposed. However, I do not perceive any further transgressions by Apple to be likely. 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 Australian consumer law.

Given that Apple changed its branding for the new iPad across the globe, and taking into account how high profile this case was, I doubt we'll see any other vendor trying something similar anytime soon. So, even without the penalty, I would say that the ACCC would have been pleased with how well the case went.

Did Apple get its just desserts? Or was the case entirely overblown?