On 28 March 2012 the Australian Competition and Consumer Commission (ACCC) lodged proceedings in the Federal Court of Australia against Apple Inc and its Australian subsidiary Apple Pty Limited (Apple) in relation to a series of Apple advertisements for its new iPad.
The gist of the ACCC’s complaint was that Apple’s advertisements for the “iPad with WiFi + 4G” were misleading because they represented to Australian consumers that the new iPad could, with a SIM card, connect to Australia’s 4G mobile data network in Australia when that was not the case.
Australia’s 4G mobile data network is offered by Australian telecommunications company Telstra. Telstra’s 4G network operates at a frequency of 1800Mhz, which is not compatible with Apple’s latest iPad. The latest iPad can however operate on 4G networks internationally, that operate on different frequencies.
At an urgent interim hearing, without admitting fault, Apple agreed to an undertaking whereby it was required to display the statement “This product supports very fast cellular networks. It is not compatible with current Australian 4G LTE networks and WiMAX Networks” in its promotional materials, on its website and online store.
Apple also agreed to contact consumers who had bought the new iPad and offer them a refund.
The Court sent the matter to a compulsory mediation on 16 April 2012 but the matter failed to resolve.
Apple has rejected the ACCC’s claims and denies that it said that the iPad could connect to the Telstra’s network. Apple filed its Defence on 17 April 2012.
A “speedy trial” on the question of liability is proceeding in early May 2012.
The case will be closely watched by those in the technology arena. Regardless of the outcome of the case, the fact that it was swiftly prosecuted by Australian regulators serves as a reminder to retailers and other advertisers of goods and services in Australia that the claims in their advertising material can and will be subjected to Court scrutiny if they have the tendency to mislead Australian consumers.