Apple vs ACCC: Refunds offered to unhappy ’4G’ iPad customers

Macworld Australia Staff
28 March, 2012
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Apple has responded to claims by the Australian Competition and Consumer Commission (ACCC) that its promotion of the ‘iPad with Wi-Fi + 4G’ in Australia is misleading by offering refunds to customers who think they were misled.

A report on theage.com.au says Apple “has offered to put corrective notices at the points of sale for the new tablet computer, saying that the product supports ultra-fast mobile broadband but is not compatible with Telstra’s long-term evolution for the fourth-generation network.”

However, speaking in Melbourne’s Federal Court this morning, Apple’s barrister, Paul Anastassiou, said the company would stop short of  putting corrective stickers on the new iPad’s packaging as it would be “cumbersome”.

As we reported last night, the ACCC said in a statement that it was making the court application against Apple Pty Ltd and Apple Inc for alleged contraventions of the Australian Consumer Law (ACL).

“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,” it said. “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.”

The ACCC is seeking final orders including injunctions, pecuniary penalties, corrective advertising and refunds to consumers affected.

The Age reports that Anastassiou told the Federal Court that “ultimately at trial, it will be contested by Apple there are in Australia networks – that according to international definitions are 4G – are properly described as 4G… What Apple says is that other networks operated by Telstra are in fact properly described by international standards as 4G even though Telstra itself does not so describe them.”

Apple, he said, is also prepared to email customers to point out that the device was not compatible with the Telstra 4G network.

Barrister Colin Golvan SC, acting for the ACCC, said Apple did not have an iPad that would meet consumers’ requests to use the 4G network.

Telstra does have an LTE (Long Term Evolution) network in place, and the other telcos are actively working towards one, but Australians can’t use the 700MHz and 2100MHz bands that Apple uses in the new iPad. The former is used for analogue TV broadcasts in Australia and the latter is allocated to 3G. The 700MHz band is to be auctioned off towards the end of this year, and telcos will have access to it after analogue TV is switched off at the end of 2014.

The ACCC, The Age says, “wants Justice Mordy Bromberg to order Apple to publish corrective advertising within three days on its website and in 11 newspapers.

“It also wants to stop Apple using its model name ‘iPad with Wifi + 4G’, ‘unless and until the device under this name can, with a SIM car, connect to a 4G mobile network in Australia’.”

It says Apple should attach stickers to the iPad packaging saying that it is “not compatible with current Australia 4G networks.”

14 Comments

14 people were compelled to have their say. We encourage you to do the same..

  1. Trevor says:

    Perhaps the ACCC should check the iFixit tear down. The second photo is the warning sticker on the box that it doesn’t work on the Telstra 4G network. This was the first iPad 3 sold in Australia. Talk about incompetent bureaucrats.

  2. Stevie Boy says:

    What is the ACCC going to do with the folks who bought one nd connect to Optus and Vodafone? Do we get help from the Nanny state? From what I know, Telstra tell you in their stores that the iPad doesn’t work on their network – the reality is, does any one really care?

    I knew my iPad wouldn’t do 4G on the Telstra network because the press were all over it here fatter the announcement.

  3. Sukh Sandhu says:

    Who really cares if it works or not? Don’t people all-ready know about it who have bought it or before they buy it? Its all-over the Internet/news….

  4. Tom L says:

    The ACCC should be chasing up the weird things at the Supermarkets rather than this. This is just trying to get a win, they seem to lose most of their cases.
    The iPad 3 does work on 4G, just not in Australia and quit a few other countries. My car is good for 280kph but governed for 240kph. but I cannot drive it at 240 Kph in Australia…do I complain to the importer about this?
    Get real ACCC.

  5. Graham says:

    This is just more Apple bashing, clever on the part of Apple though,I’ll bet very few iPad owners take the offer of a refund.
    The iPad is so good – no one will want to part with it.

    I’d rather have an iPad on 3G than another tablet on 4G – which is only available in a few parts of the country anyway.

    If anyone bought an iPad thinking it was 4G they deserve to feel “duped”.

  6. Craig says:

    I can’t wait to see how many iPads actually get returned. I doubt many will get sent back and those who do will just end up on apple.com refurbished list for other to buy at a cheaper price.

    Also in recent tests the fact is in some situations the current Telstra 3G network out performs the US 4G ones. So are customers here really worse off right now?

    That all said I do believe Apple could have done more to make an international iPad that is compatible with 4G networks outside the US/Canada. We can only guess is the same thing will happen with the next iPhone.

  7. Joss De Iuliis says:

    I am extremely happy with my new iPad with its speed and performance I was very well informed prior to my purchasing it .

  8. janekg says:

    As much as I feel that Apple Inc. was careless in advertising 4G capability for the new iPad, I’m not convinced that it was intended to deliberately ‘mislead’ the consumer. There is no way I’ll be returning my iPad but I will be wary of any advertising for future Apple products regardless of what the advertising states.

  9. Paul says:

    The ACCC should force Telstra to label its network to international standards and this wouldn’t have been a problem.

  10. Bill says:

    Maybe the accc should pursue something useful for consumers like – why are they allowing Telstra to produce a non-standard network?

  11. Stevie Boy says:

    @janekg, No Apple advertising said it would work on Telstra’s implementation of $G LTE, it was clear it was only AT&T and Verizion’s network it was 4G capable

  12. Keith says:

    We bought one with the full knowledge that it would not work on 4G. It wasn’t exactly a hidden detail with plenty in the press and at POS in the shops.
    It is a fantastic bit of kit and works fine on 3G. It’s screen is amazing and as one writer said it is almost worth the cost a an e-reader (personally I find it a bit heavy to sit in bed reading books)! The camera is great, the apps are great.
    Honestly, who is going to notice the difference between 3G and 4G on this?
    I agree Stevie Boy… Nanny State!
    Caveat emptor!

    Having said that what a poor marketing decision by Apple not to offer an Aus compatible 4G model! It will take them a while to live this down, the press love a chance to get at Apple

  13. TallyHo says:

    The ACCC should be charging those Telstra and Ericsson retards for misrepresentation by not building a network that is actually 4G.

  14. Scott says:

    Most buyers wouldn’t care less as Mac fans are already buying inferior products (no usb, etc etc no need to run through the list again) and will line up to buy whatevr gets released. 4G branding on the box SHOULD mean 4G connection. If not available it shouldn’t be branded as so,as,lets face it the average Ipad user is not very tech savvy.

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