Apple Faces $2 Million Fine over '4G' iPad Marketing in Australia

[andyjam]

1. All the Americans here yakking on about how us Aussies are embarrassing ourselves are doing a mighty fine job of embarrassing themselves right now...

2. We do have 4G (LTE) here in Australia. It has been quite heavily advertised by Telstra, so it is easily understandable that an Australian consumer buying a '4G iPad' might assume that it will work on our 4G networks. Apple could easily be seen to have been playing on this assumption for commercial gain (ie misleading the customer).

3. Australian consumers have already been paying this fine off for Apple for years, paying a significant premium for the same products despite a more valuable currency (which should translate to a lower price) and closer proximity to manufacturing centres in Asia. After you take the exchange rate and our 10% sales tax into consideration, most products are hundred of dollars cheaper in the US than in Australia -- it's ridiculous.

4. Glad to see that Apple isn't getting away with refusing to cooperate with our regulators (after all, that's what the fine is for...) If they had removed the 4G tag when asked, it wouldn't have cost them a cent.

 

[inscrewtable]

Hey calm down there self obsessed American folk, this is not about apple at all. It's a story about the Australian consumer watchdog who try to 'keep the bastards honest'.

Well done.

The fine (while still being substantial) may be but a grain of sand on the beaches of Apple's wealth, but deception is not a good look and Apple is nothing if not image conscious. This fine will hurt Apple but more importantly it will make all companies think again before trying this crap.

To me, (an Apple fanboi btw) it looked like a deliberate attempt by Apple to mislead rather than an innocent mistake. And while I'm utterly enchanted by the improvement Apple has made to humanity, I still don't want them taking the piss which is precisely what they tried to do by even fighting this case.

 

[babyj]

Apple didn't get into any trouble in the UK. Having to change an advertisement, especially having to change it to the way it should have been in the first place, isn't "trouble", and that is all that happened (and could happen) in the UK.

What "other countries"?

Your post which I replied to gave the impression this had only been an issue in Australia, when it hasn't. It is an issue in every country outside Canada and the USA that Apple falsely marketed and promoted the new iPad.

They might not have been fined or investigated officially in other countries but they were put under pressure and forced to change the way they were marketing the new iPad, in at least 10 countries including the UK.

Saying this isn't "trouble" is just arguing semantics, especially as if they hadn't changed the marketing they would have faced further official action.

Apple screwed this up across the world, the blame is with Apple HQ and thinking someone at Apple Australia made the branding and marketing call is just naive.

 

[risc]

And once again the Apple-can't-do-anything-wrong crowd are out and about.

Seriously they could sell a machine with exploding batteries and it would be the users fault... oh wait..

 

[T-R-S]

telco's ca't get there ***** together. 3G works world wide so WTF is the deal with LTE?

 

[justperry]

telco's ca't get there ***** together. 3G works world wide so WTF is the deal with LTE?

The real problem is Apple and American Telco's.

Apple because they still behave like an American company while 70% of their sales are outside of the States, they should have released an iPad capable of using LTE worldwide or nothing at all until the tech advances to a point when they can release such a product.

American Telco's because they chose frequencies that are incompatible with worldwide standards just so they can keep their stranglehold on their customers.
They should have chosen GSM and frequencies that are globally accepted.
American Telco's su*k, just look at so many topics here that complain about the high cost and incompatibility in between Telco's.

 

[inscrewtable]

One more thing...

Also smug 'ricains, Apple will not care about the impact of the initial fine at all because this is worth far more to the Australian government. Hell yeah we gave Apple a kick in the brazils and the whole world knows.

If there was a Best In Watchdog Show, award, we'd be up there on the podium.

If this was a victory against Harvey Norman Discounts then the world would not know about it but because it's Apple, every embattled govt in the world who needs to or wants to look like they are doing something useful, will be emboldened to give Apple more thorough scrutiny in the hope of finding a little PR gem.

You guys need to comprehend the magnitude of the meaning of Apple sicking it's lawyer dogs on this one. It's one thing having the beaks protect Apples intellectual property, but it's an entirely different matter to know that Apple will also use their muscle to attempt to con the consumer.

It may only have been $2m but the more important point is that they didn't have to risk it at all, and also they spent a further $300,000 on just our costs alone, never mind theirs, in order to fight for the right to act fraudulently. Not something I'd be proud about.

 

[ozute]

I really like apple and I really like America, but I must say that this mud slinging at Australia is very disappointing. I'm not sure where it became an America vs Australia argument but some forum posters seem to think that is the case. We're talking about a company and a government agency settling misrepresentation of a product. You cannot sell a product and claim that it does something if it fact it doesn't; that's false advertising. What is so hard to understand about that. Companies must vary a product to take advantage of local tastes or abilities. Just because something works in 2 countries doesn't mean you can claim it will work everywhere else. What kind of company thinks that that kind of arrogance is acceptable? Apple obviously did and got a clip in the ear for it. So just because Australian government consumer agencies decided to pursue a company for selling a product which clearly claimed functionalities that were in fact not available in the country which it was being sold, does not mean we're dumb or whatever else you choose to label us. I'm really disappointed by the amount of narrow minded venom from some keyboard warriors from the US. You'd think we were talking about the future of humanity instead of a bit of metal and glass. Take the high road guys and remember there is actually more on the face of this earth than the US. Like china for example, the country which owns you.

 

[Tea-Aholic]

Before I go taking the piss from all the Australians, let me say that I missed the frequency thing. I deserve all the crap. I was wrong.

Next time I am down under, I'll treat everyone to a skippy burger at Burger King.

Just to let you know before you embarrass yourself further, we don't have Burger King here in Australia.

 

[wackymacky]

The problem as I understand it.

Company X makes a device that is Nth generation compatible.
They sell it in Country Y which is at N-1th generation network.
Citizens of Country Y complain because their N-1 network is old technology.
Citizens of Country Y can still use the Nth generation device in other Nth generation network countries.

Aussies, stop whining and spend your legal dollars on upgrading your networks.

----------



Complete crap. A 5G phone is still a 5G phone whether there is a network it works on.

Analogy, is a BlueRay disc still a BlueRay disc if you don't have a BlueRay player, but instead only a DVD player?

I think a better analogy would be saying that could an company bass it's marketing "fantastic 3d blueray" when only DVD disks are available on that country.

Sure you could say buyer beware and informed but most would see the advert for 4G and presume that the device would function as such.

Yes it saves apple time and money using the same ads across different regions but it isn't good enough really.

 

[mrsir2009]

Good ol' Aussies.

 

[sparkie1984]

I'm actually quite disgusted at the Americans posts on here about Australia. You are doing your country a disservice and making yourselves look incredibly narrow minded and racist.

Regarding the fine it's hardly going to hurt apple maybe they were a tad naive about marketing it as 4g in a country where it doesn't support 4th generation networks

 

[theluggage]

I think a better analogy would be saying that could an company bass it's marketing "fantastic 3d blueray" when only DVD disks are available on that country.

No, its exactly like saying "iPad with 4G" when you know its never going to work with existing or planned "4G" networks outside of N. America, and trying to cover yourself with a few (initially) somewhat ambiguous footnotes in the tech specs. (They got clearer as the complaints started).

For full marks, you should be a large, international corporation with major distribution and retail operations in the countries concerned, producing fully localised versions of your products, who should have bloody well known what "4G" meant in those countries. Oh, and it helps to realise that in Australia and the EU, caveat emptor went out with workhouses and rickets (...and, like those, requires vigilance to stop it creeping back in thanks to globalisation).

 

[scabioustona]

$2 million is like $0.0001 cent to apple

 

[SpyderBite]

2 million? Tim Cook's secretary farted that much at her desk yesterday.

 

[iSayuSay]

Funny how some people can't see the big pictures

Sure $2M is like paying a parking fine to average people for Apple. But that's not the point.

They deliberately publish something which will not usable in most places, except yeah .. Canada and US of A

New iPad is basically a beta LTE hardware from Apple. Not completely ready yet, but people ask for it. So why didnt Apple promote it as LTE only on States and Canada?
And drop the moniker for the rest of the earth.

 

[JAT]

I really like apple and I really like America, but I must say that this mud slinging at Australia is very disappointing.

I assure you we are not all like this. Stupid kids. Consider the source, and please try not to be too offended.



Someone in marketing at Apple hopefully got in trouble for using USA marketing in other countries. Stupid marketers.

 

[MDiddy]

I'm an American. Apple screwed up and should be fined. US customers would ***** bricks if Apple launched a device that only worked as advertised on European frequencies.

 

[ohbrilliance]

This reminds me of a travel agency that copped flack for selling skiing packages in South Korea during the summer there, with a little asterisk stating 'snow is not guaranteed at any time'. Buyer beware perhaps, but there is such a thing as taking the consumer for a ride.

It may be 'just' 2 million to Apple, but it's a slap in the face to them.

It's amusing that 4G has been replaced with "very fast cellular networks", cellular being an American term. Fitting, considering the compatibility of 4G.

(Australian here, who has yet to own an iPad)

 

[d0vr]

The problem as I understand it.

Company X makes a device that is Nth generation compatible.
They sell it in Country Y which is at N-1th generation network.
Citizens of Country Y complain because their N-1 network is old technology.
Citizens of Country Y can still use the Nth generation device in other Nth generation network countries.

You are misinformed. It is the Americans who are using substandard technology. The reason Apple thought they could get away with calling it 4G is because Australians using N-1 technology receive better speeds than Americans using their current (n) technology or LTE.

We also have LTE, just like Americans, only on a different frequency. Just because ours is better doesn't mean you can come and call our N-1 (HSPA) tech 4G when it isn't. If you want to call something 4G here, make sure it is compatible with our 4G network/s.

And yes, 2 mil is just a drop in Apples resources, but I don't think it was intended to hurt Apple, just to make a point. And it worked, Apple now advertises it as Wifi + Cellular. Who knows, maybe we'll see Apples next device compatible with Australian 4G networks.

 

[MimiHome]

Mistakes happen whether it was the group who was assigned to this specific area. Research and marketing could have done what they were supposed to do and the top man makes the final decisions.

The best thing that comes from this is learning from our mistakes. We all make them and we all pay the price for them in one way or another.

Lesson learned for Apple.

 

[FakeWozniak]

You are misinformed. It is the Americans who are using substandard technology. The reason Apple thought they could get away with calling it 4G is because Australians using N-1 technology receive better speeds than Americans using their current (n) technology or LTE.

We also have LTE, just like Americans, only on a different frequency. Just because ours is better doesn't mean you can come and call our N-1 (HSPA) tech 4G when it isn't. If you want to call something 4G here, make sure it is compatible with our 4G network/s.

This is a reasonable argument. My key argument the other day, that I admit I was wrong, was based on the flawed idea that AUS doesn't have LTE. I changed my stance after getting a clue; learning that there is LTE but on a different frequency. But what does 4G actually mean. You are pointing out, whether you intended to or not, that 4G can be different things. Apple recognizes this and this is why they relaxed the use of 4G. On my iPhone, after a software update, it now says 4G when I get HSPA+. You can argue if this is right or not, and apparently Apple is paying a few dollars finding the threshold they can inch up to without serious repercussions. I am sure they sell even more iPhones 4S's saying they get '4G'.

I still strongly believe that 4G is a marketing term, not a technology term and you should always read the details to determine if it will work for you. I agree fully that Apple should not have placed the "4G" badge on the box and on adds, front and center because it would be a common conclusion to make that it will be supported. Personally, I buy all of my gear from the Apple Store (brick and mortar) and ask the salespersons about the product, but I recognize others just run the Best Buy/Tescos/whatever and plunk down $500 impulsively.

----------

I think a better analogy would be saying that could an company bass it's marketing "fantastic 3d blueray" when only DVD disks are available on that country.

Maybe a better analogy yet is marketing BD disks as "High Definition Video Disc" in a country that only allows HD-DVDs. The people who live in the HD-DVD country complain when they buy these High Definition discs and they don't play on the players.

The mistake of Apple is that they didn't research that country and realize High Definition meant something else. Clearly a mistake that should be righted quickly and refunds given to anyone who bought a device. I just don't agree with the punitive damages.

 

[craznar]

I purchased a 4G iPad on day #1 in Australia.

The outlet had clear signs about the compatibility issues, specifically with Telstra.

Not only that - but on that very Network I'm capable of 40Mbps speeds (get 20Mbps typically), which is many times faster than the 3G iPad.

And to take the cake, whilst the Apple iPad 4G is not really 4G in Australia - neither is the Telstra 4G technically 4G either.

AND to add icing to the cake, Apple offered returns at no cost to consumers.

tldr; - NO Apple didn't deserve this fine, they did everything by the book on this one.

 

[DallasDeckard]

Aussies aren't at fault...

Apple made a mistake, they are paying for it. No biggie. I can understand why the Aussies would be upset. If I was living there and didn't get 4G coverage I was promised simply because it was a different frequency, I'd be upset too. I'm sure if the Aussies were promised 3G and got 3G, they wouldn't be upset. I have two friends that live down under who love their iPad there. Apple made a mistake, they are complying with the regulators and paying the fine. It's that simple. Aussies love Apple, Apple loves Aussies, but when you mess up you have to pay the piper. Fellow Americans on here cracking on Aussies need to shut up. You're making yourself look stupid. The Aussies aren't cracking on Apple, they just want what they were promised, which is totally understandable!

 

[d0vr]

This is a reasonable argument. My key argument the other day, that I admit I was wrong, was based on the flawed idea that AUS doesn't have LTE. I changed my stance after getting a clue; learning that there is LTE but on a different frequency. But what does 4G actually mean. You are pointing out, whether you intended to or not, that 4G can be different things. Apple recognizes this and this is why they relaxed the use of 4G. On my iPhone, after a software update, it now says 4G when I get HSPA+. You can argue if this is right or not, and apparently Apple is paying a few dollars finding the threshold they can inch up to without serious repercussions. I am sure they sell even more iPhones 4S's saying they get '4G'.

Yeh, I only just saw the part where you mentioned you saw the flaw in your argument. The real problem is that Apple applied USA marketing globally without doing any research. In Australia, it is generally accepted that anything less than LTE is not 4G, hence the problem. And it seems other countries are the same. Our consumer watchdog actually fights pretty hard to make it easy for consumers to know what they are buying based on marketing, which I think is a good thing.

There actually seemed to be a massive crack down on advertising 5 or so years ago, when there was a lot of "*" fineprint being used. Now it has to be reasonably clear what is meant in the large print.

My post wasn't solely meant at you though, it was more posted in disgust at the number of people bashing us in Australia, when they didn't really understand the situation. It's quite shocking really, but sadly not surprising. Thanks for acknowledging the mistake though!