Following action taken by the Australian Competition and Consumer Commission,
the Federal Court has ordered Apple to pay AU$2.25 million in civil pecuniary
penalties for misleading advertising in relation to the promotion of its "iPad
with WiFi + 4G" which has been found to have contravened the Australian
Consumer Law.
Apple promoted the "iPad with WiFi + 4G" in Australia from 8 March to 12
May 2012 on its website, its online store and in its retail store. Apple
resellers also promoted the "iPad with WiFi + 4G" online and in their stores
using promotional materials supplied by Apple.
However, the "iPad with WiFi + 4G" could not connect to any networks
which have been promoted in Australia as 4G networks, in particular Telstra's
LTE network.
"The $2.25 million penalty reflects the seriousness of a company the size
of Apple refusing to change its advertising when it has been put on notice that
it is likely to be misleading consumers," ACCC Chairman Rod Sims said.
"The Federal Court has again recognized the need to protect consumers from
misleading advertising in the telecommunications and related sectors. This
decision should act as a renewed warning that the ACCC will continue to take
action against traders who take risks in their advertising, regardless of their
size."
In his reasons for judgment, Justice Bromberg considered that Apple's
conduct was "serious and unacceptable" and stated that "The most
concerning aspect of Apple's contravention… is the deliberate nature of its
conduct".
Justice Bromberg noted that the facts of the case suggest that "global
uniformity was given a greater priority than the need to ensure compliance with
the ACL". His Honour warned that "Those who design global campaigns, and
those in Australia who adopt them, need to be attuned to the understandings and
perceptions of Australian consumers".
The Court declared that Apple's conduct was liable to mislead the public as
to the characteristics of the device in contravention of section 33 of the
Australian Consumer Law. Apple agreed to the declaration and consented to the
penalties and other orders sought from the Court.
This judgment follows an undertaking given by Apple to the Court on 28 March
2012 in response to the ACCC's decision to institute proceedings.
Apple was also ordered to pay a contribution to the ACCC costs in the amount
of $300,000.
The ACCC welcomes the Court orders and notes that this decision is the fifth
penalty handed down over $1 million since civil pecuniary penalties for consumer
protection matters were introduced.
The ACCC has been required to take legal action against a number of large
corporate entities to ensure advertising and promotions do not mislead
consumers. Since the introduction of the Australian Consumer Law the Court has
imposed penalties of in excess of $1 million on Optus, Harvey Norman and TPG for
similarly problematic conduct.