iPad customers felt "short changed" by Apple, Australian judge says

IDG News Service - An Australian Federal Court judge ordered Apple to pay a A$2.25 million (US$2.28 million) fine and $300,000 in court costs to settle a lawsuit accusing the company of falsely marketing the 4G capabilities of its latest iPad.

The settlement was reached earlier this month but was awaiting court approval by the Federal Court in Melbourne.

Apple quickly backed down after the Australian Competition and Consumer Commission (ACCC) filed suit on March 28, agreeing to clarify that its latest iPad was not compatible with the sole 4G network in the country, run by Telstra. Apple also agreed to offer a refund, although few people returned their devices.

Judge J. Bromberg wrote in his ruling that it isn't possible to find out how many Australian consumers were mislead or disappointed. But Bromberg wrote "I have no doubt that given the promotion by Telstra of the superiority of its 4G network, many purchasers will have felt decidedly short-changed."

Telstra's 4G service operates on the 1800MHz band. But the latest iPad can only use LTE on the 700MHz and 2100MHz bands. The device is compatible with 4G LTE networks in the U.S. and Canada using data speed specifications including HSPA, HSPA+ and DC-HSDPA.

In a statement, the ACCC said the "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."

Apple did not directly address the fine, saying in a statement that "carriers do not all refer to their high speed networks with the same terminology, therefore we've decided to use "Wi-Fi + Cellular" as a simple term which describes all the high speed networks supported by the new iPad."

Send news tips and comments to jeremy_kirk@idg.com