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In Australia, Apple Fined $2.5 Million For '4G' Advertising Claims 154

Posted by timothy
from the we-thought-this-island-was-for-crime dept.
Whiney Mac Fanboy writes "Apple has agreed to pay a $2.25 million (AUD) fine (along with 300k legal costs) to the Australian Competition & Consumer Commission for misleading advertising. Apple misrepresented their iPad product as being a '4G' device, when in fact they're only compatible with a very small percentage of 4G networks around the world. The Age online has the full story."
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In Australia, Apple Fined $2.5 Million For '4G' Advertising Claims

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  • by Anonymous Coward on Friday June 08, 2012 @07:59PM (#40264397)

    10 minutes of iPad sales?

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      We really are talking about 3-4 minutes of Apple profits. That's how much money they're raking in.

      • by cpu6502 (1960974) on Friday June 08, 2012 @08:50PM (#40264717)

        Apple earned about 25,000 million last year, which comes to 2.8 million per *60* minutes..... not a mere 3-4. I can't help wondering why the judge is worried about the fine being too large. Apple won't be hurt by this.

        • Re: (Score:2, Informative)

          by Anonymous Coward

          Apple earned about 25,000 million last year, which comes to 2.8 million per *60* minutes..... not a mere 3-4. I can't help wondering why the judge is worried about the fine being too large. Apple won't be hurt by this.

          The judge specifcally said he was worried about the scale, not that it was too small, that the upper ranges he was talking about was a $300million company would suggest to me that if the numbers they do present show what you are saying he will flip his lid and up the penalty.

          http://www.theaustralian.com.au/australian-it/judge-wants-data-on-wealth-before-he-rules-on-apple/story-e6frgakx-1226389535095

          "I don't know whether we're talking about a corporation that makes $10m or $300m," he said. "How do I know that it (the penalty) is meaningful for Apple if you don't put before me any idea of what its financial position is?"

        • by shione (666388)

          And don't forget the slashdot article on how apple sidesteps paying taxes the world over.
          http://apple.slashdot.org/story/12/04/28/2330225/how-apple-sidesteps-billions-in-global-taxes?sdsrc=popbyskidbtmprev [slashdot.org]

          I wonder how much tax apple has evaded in Australia alone. Maybe this fine isn't big enough but it will crawl some of those dollars back.

  • A reviewer judge has called for info on how much investment Apple has in Oz also how many ppl were affected.

      • by Anonymous Coward

        >Apple has agreed to pay a $2.25m fine and $300,000 towards the ACCC's legal costs but Federal Court judge Mordy Bromberg, who must approve the settlement, questioned why there was no information for him about the number of affected customers and Apple's total worth.

        >"I don't know whether we're talking about a corporation that makes $10m or $300m," he said. "How do I know that it (the penalty) is meaningful for Apple if you don't put before me any idea of what its financial position is?"

        From the artic

        • by sd4f (1891894)
          You have to know how the ACCC works, they're a fairly noble in intentions organisation, but alas, run by bureaucrats and government types. They don't chase the real culprits, only the easy targets when hey can see a bit of cash raising is available, and getting their name plastered in the media to justify their existence. The groceries business is a duopoly, and it appears that the ACCC do absolutely nothing to those two companies who exploit that situation, nor do they do anything to the four major banks,
        • by ATMAvatar (648864) on Friday June 08, 2012 @09:00PM (#40264797) Journal

          No, it's a rational observation that a fine must be meaningful to a corporation for it to have any hope of affecting change.

          If the fine is too small (as fines generally are), it is dismissed as a simple cost of business. The immediate problem is remedied (so as not to piss off the authoritative body that caught them), but similar problems are guaranteed to arise again in the future. After all, if it wasn't profitable to break the law in the first place, the company wouldn't have done it. If the fine is going to be a small fraction of that profit each time, the smart business decision is to continue the practice of doing something which breaks the law, preparing for the inevitable "whoops - we'll fix that, your honor" for when someone catches on, and milking the ill-gotten profits until then.

          • the process should be streamlined. can't we have the companies *pay in advance* to the authorities, in order to seek their favor.

            (oh. right. they already do this. quite effectively, too.)

          • by drsmithy (35869)

            The obvious solution being, of course, to fine business entities as a proportion of annual profits averaged over, say, the last 5 years.

    • Serious?

      (sorry. I'll be quiet, now).

  • Pocket change... (Score:4, Interesting)

    by __Paul__ (1570) on Friday June 08, 2012 @08:04PM (#40264427) Homepage

    ...and the resulting exposure probably saved them tens of millions in advertising.

    • by geekoid (135745)

      To all those people who would hear this in the media, but not know about Apple?

    • Loosing fans (Score:3, Insightful)

      by Anonymous Coward

      "This piece of plastic wont work on our networks?"

      I doubt it's the kind of advertising they either wanted or needed frankly. That being said it is their own fault and they deserve every lick the ACCC feels like giving them, certainly very few/if any people in the Australian community are supporting them in this, even the most rabid applebois that I know were saying that Apple was pretty stupid with their actions. That they are trying to block the galaxy s3 here also hasn't made them very many friends either

  • by Anonymous Coward

    All carriers play pretty fast and loose with claims of wireless speeds, 3G, 4G, and associated coverage areas.
    There is no "4g" coverage in my area, yet every phone retailer sells and advertises 4G phones.

    Why does only Apple get called on this nonsense?

    • by Anonymous Coward

      >Why does only Apple get called on this nonsense?

      I would say that it is because it is Australia, and we can.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Socialist paradise

        Immigrating recently from Europe in Australia, I can tell you Australia isn't at any rate a socialist country, much less a paradise for socialists.

        • by Anonymous Coward

          Living in Australia all my life, I can only sadly point out that irony is one of our national passtimes, as is sarcasm and satire, equally that consumer protection laws and bodies [like the ACCC] are often passed of by our American brethren as Communist.

    • by jibjibjib (889679)

      Because this isn't just about a lack of coverage or network capacity. There are actual 4G LTE networks in Australia, and Apple was selling a device that wouldn't connect to them but advertising it as 4G.

    • by bloodhawk (813939)
      Because only Apple's 4g devices don't actually work on 4g networks in Australia. While you may not have coverage for 4g, if you go to an area that has it at least the 4G phones you buy will work, The ipad will not.
    • Because this device can't work on 4G in Australia at all.

  • by cpu6502 (1960974) on Friday June 08, 2012 @08:14PM (#40264495)

    Funny how these markets and lawyers and politicians always leave-out relevant facts. "Alan Archibald, QC, acting for Apple, told the court it was irrelevant how many iPads had been sold or returned because Apple had offered to provide full refunds, so there was no loss to customers. "What conceiveable damage might there be?", he said."

    The guy forgets that Apple only offered these refunds AFTER the government started prosecuting them. That alone is reason enough to fine them, because had the government not existed, then Apple would have happily lied with its "iPhone 4G" campaign and refused to refund the cash to the ripped-off Australians. (Also refunding the phone doesn't mean customers are exempt from the 2-3 year contracts. Now they are phoneless, but still stuck with a bill.)

    • The "offer" is also rather moot given that Australian law would oblige them to take them back if they were not fit for purpose (ie connecting to a customers 4G provider)
    • by mjwx (966435)

      Funny how these markets and lawyers and politicians always leave-out relevant facts. "Alan Archibald, QC, acting for Apple, told the court it was irrelevant how many iPads had been sold or returned because Apple had offered to provide full refunds, so there was no loss to customers.

      This doesn't matter under Australian law. They aren't being sued by customers, they are being fined by the authorities for breaking the law.

      Apple knew it's "4G" would not work on Australian LTE networks (the frequencies used

  • Delimiter – an independent, Australia-focued tech news site – have been covering this story [delimiter.com.au]:

    To your writer, a $2.2 million fine appears fairly ridiculous in the larger context of the issue, given the fact that Apple made some $4.88 billion in revenue from Australia in the past financial year. $2.2 million, in that context is less than a blip on Apple’s radar; and it’s certainly not a disincentive to do the same thing again. We’re talking about pocket change here.

    However, as I

  • Do you think they'll get a fine every time they dress up an old feature with slick GUI/hardware and call it "new"?
  • by slashmydots (2189826) on Friday June 08, 2012 @08:34PM (#40264619)
    They sort of buried the lead a bit phrasing it that way. The last I heard, there are zero 4G towers in the entirety of Australia. Yeah, none. So now the law suit makes a lot of sense. A normal person would have removed "4G" from advertising if the entire country didn't have it. When it rolled out on phones and tablets in the US, only large cities had it and even that was controversial and had some small, local law suits. But zero towers in the country? That's just stupid. I see why Apple got fined.
    • by O('_')O_Bush (1162487) on Friday June 08, 2012 @08:46PM (#40264695)
      There are zero 4G towers in any countries, including the U.S. The best we have are technically 3.5 G, as no service yet meets the 4G standard.
    • by maglor_83 (856254)

      Telstra has a 4G network here. But not one that is compatible with the iPad.

    • by Anonymous Coward on Friday June 08, 2012 @08:56PM (#40264769)

      Australia has 4G; quite an extensive LTE network in fact and one that can be used with most new Android phones, it's just that we don't yet use the frequencies that only the USA uses and that Apple solely targeted. Europe is in the same boat, they have 4G but don't use the USA frequencies.

      Apple clearly said "* You can have 4G if you are in America" however the * statements that would be allowed in America are not allowed here. Disclaimers in Australia cannot, under law, substantially change the headline of an advertisement. That is, you can't say 4G Capable in the headline then disclaim it as "Only in America" in the Australian market.

      I'm surprised Apple didn't use an LTE chip with a larger number of bands. Restricting it to AT&T frequencies seems counter-productive.

      • Restricting it to AT&T frequencies seems counter-productive.

        No, that's not the problem. Even if they had the same AT&T bands in Australia, they'd still be skating on thin ice [cultofmac.com].

        The real problem is our US consumer watchdog agencies. They simply don't care anymore. If they did care, there would be a minimum font size for disclaimers shown on television (that I currently can't even read on my huge television), and the carriers wouldn't call their services "unlimited" (and Sprint, which calls all the other major carriers liars, wouldn't have a bs "data premium" fee it

        • a minimum font size for disclaimers shown on television

          I worked for a company which ran a 1900 service (in aus that means you pay with your phone bill). The law said we had to put disclaimers in 4 point type when we advertised on big roadside signs. We used a bigger font for our disclaimers.

        • by Splab (574204)

          I feel for you.

          In Denmark a telecom was recently fined for showing too small a disclaimer text.

          (We also have same rules as Australia wrt 4G)

    • by jamesh (87723)

      Telstra has rolled out 4G in Bendigo (central Victoria) and the Samsumg Galaxy S2 4G works on it just fine. I don't know whether it's a coincidence but 3G has been pretty much useless since they started rolling out 4G. Can't even load a web page a lot of the time.

    • They sort of buried the lead a bit phrasing it that way. The last I heard, there are zero 4G towers in the entirety of Australia. Yeah, none.

      You're woefully misinformed.

      The US describes HSPA+ as 4G (in reality it's a 3.5 G technology) we've had that since 2008, in fact we were the first country to have a commercial HSPA+ service.

      We've had commercial WIMAX networks since 2009.

      All three network operators are deploying LTE as we speak. One telco, Telstra has an active commercial LTE network. In fact this is where the law suit makes a lot of sense, the Ipad does not operate on the same frequency as the LTE networks in Australia so it's limited to 3G

  • AT&T Mobility made the same error in some online ads on their site because the computer programming adding the 4G logo saw the 4 in "iPhone 4" and assumed that meant 4G mistakenly.
  • I'm now waiting for Apple to turn around and countersue Telstra for making a 4G network that is not compliant with the capabilities of the Ipad. Clearly Telstra are advertising a 4G service that isn't compatible with a 4G device, which is misleading!
  • Alan Archibald, QC, acting for Apple, told the court it was irrelevant how many iPads had been sold or returned because Apple had offered to provide full refunds, so there was no loss to customers.

    “What conceiveable damage might there be?”, he said.

    How about:

    1. * Time lost trying to get 4G to work. This could be considerable since most people will first assume that it not working is, somehow, their fault
    2. * Time lost by friends and work colleges
    3. * Cost of returning to the Apple shop to return th

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