Apple penalized $2.22 million for misleading iPad 4G ads

Apple penalized $2.22 million for misleading iPad 4G ads

Summary: Apple's new iPad: 4G? Not in Australia. The marketing misstep will cost Cupertino $2.22 million.

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TOPICS: iPad
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Apple told Australians that its new iPad was "4G," even though it didn't operate on their country's 4G networks.

The misstep will cost the company AU$2.25 million, or about US$2.22 million, according to a local court ruling.

Anthony Caruana has the story from our Sydney bureau:

Facts agreed on by the ACCC and Apple Australia suggest that Apple's conduct breached consumer laws in four ways — by saying that the new iPad with Wi-Fi and 4G could connect to Telstra's LTE network on:

  • Its web page and online store
  • Its own stores
  • Information and materials provided to resellers
  • Information and materials provided by Apple on reseller sites.

Each of these instances of non-compliance has a maximum potential penalty of $1.1 million, meaning that Apple was originally facing a maximum penalty of $4.4 million. Apple and the ACCC have settled on a penalty of $2.25 million.

You can read the full story here.

Tellingly, the judge in the case expressed exasperation that he couldn't discern the difference between 3G and 4G networks -- demonstrating that marketing efforts within the telecom industry have only confused consumers. In this case, it cost them, too.

Topic: iPad

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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41 comments
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  • The truth is that misleading advertising pays off

    Apple earned $2.22 million in the amount of time it took the judge to say "Apple, you are guilty". Apple has been convicted before of misleading advertising when they lied on British TV about how fast the iPhone was.
    toddbottom3
    • The penalty is not fair since Apple's web page always said that 4G has ...

      ... specific supported cell network frequencies and that it will not work in Australia.

      Obviously, even with that disclaimer it is better that Apple would not use "4G" suffix since many users might ignore the description. Apple eventually updated the name to move "4G" away.
      DDERSSS
      • This all just shows how incompatible the current legal system is with Inter

        The current legal system assumes that advertisements etc are confined to specific market. If you put some information on an globally accessible web site, then it must be ok for every possible law in the world. Not going to happen.

        Imagine, Apple's iPad was ok with Telstra in Australia. But, it might just not work with the 4G network in Timbuktu. Then what? Pay to the government of Timbuktu?

        Good way to make money! I am starting an wireless provider tomorrow, that will claim to have 4G service. Since I won't, the iPad would not work on my network with 4G and then I will be entitled to $4M compensation for misleading my customers. Great business opportunity. Someone wanting to join?
        danbi
    • Obnoxiously Arrogant Statements from Apple fans, True!!!

      YOU demonstrate exactly why Apple is becoming one of the most hated companies in Technology History today. It's that despicable kind of boasting that will make their foray into the successful side of the ledger short lived in the long run.

      Apple and some of their exorbitantly Appleholic fans are only showing their true colors and they're not "I bleed 6 colors for Apple" either. They are only interested in OBSCENE Profits over ever actually competing in the market place!!! Thanks!!!
      KronJohn
      • You don't come here often, do you?

        Else you would know that toddbottom3 is one of the more rabid Microsoft fanatics in these talkback columns. Your mistaking him for an Apple fan is just [i][b]TOO[/i][/b] funny for words!

        BTW, please explain why the obnoxious and arrogant statements from the Microsoft sycophants aren't equally repugnant?
        shill shooter
      • @shill shooter

        I don't know what RDF's drugs your on, but basically I was supporting his comment. Not condemning it!!!

        Because everything he said was true and I don't care if he's that Linux guy or Microsoft super fan, I agree and that's why I thanked him!
        KronJohn
  • When will Apple be fined for the PC vs Mac lie filled ads?

    Certainly one of the most misleading and unethical ad campaigns of the last 20 years, and Apple gets away with it.
    The real kicker was while Apple was making ads that showed "PC" unable to say the "V" word, the ads, never, ever said the "L" word. Not a one of them. That was because that OS was the biggest failure ever, far worse than Vista by any measure. Even pro apple publications, like Ars Technia had harsh words for Leopard.
    When an OS rolls out half baked at best, with no security, and a bug so bad that a user could easily lose every bit of his data in one split second if a connection was lost, even momentarily during a file copy (this has to be one of the worlds worst OS holes ever) there is good reason to never mention it's name but just try to brand it as that company who makes those ipods from IP that was not Apple's.
    xuniL_z
    • You are forgetting to apply Apple logic

      [i]a bug so bad that a user could easily lose every bit of his data in one split second if a connection was lost[/i]

      See, that bug is "okay" because it was an implementation error and wasn't flawed by design. The design was perfect but workers who were quickly fired implemented it incorrectly.

      When XP 1.0 ships with the firewall disabled by default, something that can be fixed in 10 seconds by an end user, that is an error that proves all of Windows is flawed by design.

      See the difference?
      toddbottom3
      • Design

        The problem with Windows is not that the design is bad. It is great. In theory.

        However, everything in Windows is implemented cluelessly. Everything.
        Gaping holed continue to be found everywhere in Windows. Even on places, that were "just patched".

        Totally clueless.

        From a security perspective, Windows can be categorized in one word: Hopeless
        danbi
      • So, by YOUR "logic"...

        The 65,000+ bugs in Windows are OK?
        shill shooter
      • re: Design

        @danbi : You are tekll us that Macs and Linux have no OS holes that don't require patching? Even if you say "a little" or "not as much as Windows" that is still way too much.
        According to my calculations, Windows 7 had actually about 32 updates last year [if you ignore one superceeding another]. This adds up to under 70MB in size. Take the last OS X update. How big is that bugger? 600MB? Do that 6-7 times a year. [true some includes components but so what i was including for Windows]
        Gisabun
      • re: So by "YOUR "logic".....

        @shill shooter : "The 65,000+ bugs in Windows are OK? " And what does this have to do with Apple getting fined? Fanboi by any chance?
        Gisabun
      • @gisabun

        [i]"The 65,000+ bugs in Windows are OK? " And what does this have to do with Apple getting fined?[/i]

        Nothing! However, toddy botty (and Loony-Z) seems to think that a bug in Leopard [b]does[/b] have something to do with it. Just pointing out the error in his "logic", which is actually hyperbole designed to reinforce his conviction that Apple is evil and Microsoft is perfect.

        [i]"Fanboi by any chance?"[/i]

        No; I can't be bothered wasting energy on such a pointless pursuit. MS and Apple are just commercial organisations, but some of the more rabid posters in here sound like they revere MS as the new messiah. I would rather see some [b]real[/b] discussion in here about the relative merits (rather than hatred filled rants), and WHY some people have certain opinions, rather than flat assertions with no supporting evidence. The level of vitriol & hatred spewed by some posters is truly scary. They need to either get out more, or get some counselling.
        shill shooter
    • Steve Ballmer, is that you?

      OS X is the operating system. Leopard is just a version. In spite of your chicken-little impression, Apple users seem very happy with their OS of choice. As an IT professional, I find Microsoft's disjointed changes to interface confusing to users, and their inattention real improvement disheartening. As for the PC vs. Mac ad campaign, the reason for it's success is that countless users can identify with the representations. So, they can't be too far off, can they?
      IronHorseTamer
      • No.

        Even Ballmer isn't [i][b]that[/i][/b] crazy.
        shill shooter
    • What a good idea!

      When an OS rolls out half-baked at best, with no security, and numerous bugs so bad that a user could easily lose every bit of his data, there is good reason to never mention its name.

      So you [i]will[/i] shut up about Microsoft from now on then? Thank you!
      shill shooter
      • Shill shooter

        I've noticed over time that elitist, self titled types like yourself, are ironically the real definition of what they proclaim they are against! Too funny.
        And, you <B> will </B> smile when you say things like that.
        NT has NEVER had the problem Leopard suffered at it's release which coudl allow data being moved to be completely lost if the move is unsuccessful due to a lost connection, for example.
        NT NEVER removes data from the source, before the ENTIRE move has completed and been verified.
        So it appears the shill shooter has shot himself in the foot. What a surprise. LOL.
        It's too bad that Apple shills like yourself think your abstraction of an OS that you have very little control over, is somehow different than Windows or Linux under that magic cover from which it's hidden from you.
        We all know you think there are some magic crystals in a Mac that can never fail, something akin to a child's fairy tale.
        Good luck while the 200,000 Mac botnet grows, which you are very likely a part of and would never know it, because of...you know..the magic sparkles under the covers... It is just one of many of attacks on the easy prey called OS X.
        The botnet dispelled your little magic story that somehow erased marketshare as a reason hackers, backed by governements and terrorists the world-wide have been after windows for decades. And the funny part is there has been no real harm. The harm has come from *nix systems that have given up government secrets, such as 20 years work on an an aircraft that would have given the U.S. and her allies a huge advantage in air superiority, but now that is down the drain. Thanks to the same system OS X is built on.
        Without Job's eye for choosing the right people and companies from which to steal code (and patent it with a little change here or there which has disgusted the real IT community for years), I'm afraid the Apple RDF is going to start to weaken....must.....recharge...crystal.......Tim..Tim...what can we do??
        LOL.
        xuniL_z
      • @Loony_Zunes: Right back at ya!

        [i]"I've noticed over time that elitist, self titled types like yourself, are ironically the real definition of what they proclaim they are against!"[/i]
        Too true in your case. You masquerade as a straight commenter, but you overwhelming bias puts the lie to that.

        Since you are a classic troll/shill, all you have to do is just list all your faults, and then attribute them to anyone with a different opinion.

        You can't (or won't) see that Microsoft has had at least as many problems as you attribute to Apple and/or Linux. You just keep on loading the FUD, the half-truths, the twisted logic and keep firing away in the hope that someone will agree with you.

        Well, some will, but they are already the blind MS faithful. Everyone else just sees your crap for what it is - it certainly wouldn't convince anyone to join a mob of crazies like you!
        shill shooter
    • and the Apple cultists come out of the woodwork.

      NT is the OS, Vista was just a version, yet Apple made it the centerpiece of their ad campaign, yet never mentioned their current "verison" at that time, Leopard, which was so half baked even pro apple publications like Ars Technia gave it a good smacking around.
      Trust me, those of us happy with Windows (what Apple users call "disjointed" or whatever, is just the mark of an OS that allows customization at a programmers level if needed. Any OS needs to be like that, hence why NT still runs the worlds clients in almost every enterprise and over 90% of homes. And please, the old "they are forced to use Windows" myth has long been disspelled.
      So this hopeless OS as some of you call it is the very one running almost every business client, and MS servers are found in the majority of enterprises now as well, after they took over hundreds of thousands of Unix and Novell sites in the 90s and up to this very day.
      Windows networks are extremely well suited for the flexible enterprise as evidenced by their ubiquity.
      Apple has made some gains domestically due to their lie filled campaign, but world wide their marketshare in that space is still negligable.

      So the bottom line is, if what you Apple RDF victims claim is true, you are a breed of elitists that somehow have evolved more quickly than the other 95% percent of the human race. Congratulations on your ability to dismiss the rest of mankind with one wave of your Apple RDF controlled arm. Nice. LOL.
      xuniL_z
      • Apple "cultists" are wrong, according to you

        ...but Microsoft cultists are right?

        If anyone is in a reality distortion field, it is you. Get a life.
        shill shooter