Australian Consumer Watchdog Sues Apple Over iPad Marketing

Fluffeh writes "Australia's competition regulator will today take iconic technology giant Apple to court for advertising its new iPad tablet as featuring '4G' speeds — which are not supported on Australian telecommunications networks. One of the key features of the new iPad is support for 4G speeds, however, the 4G speeds which the new iPad supports will not be available in Australia, with Apple's technical specifications page only listing it as supporting the 700Mhz and 2100Mhz spectrum bands, neither of which are being used by Australian telcos to provide 4G services. The case may be a bit shaky, though, as Apple does state in the fine print: '4G LTE is supported only on AT&T and Verizon networks in the US; and on Bell, Rogers and Telus networks in Canada. Data plans sold separately. See your carrier for details.'"

Comments

IMHO Apple is becoming a scummy advertiser

[whoever57]

It's like the release of the Ipone 4GS in the US -- the ads focused on SIRI, but when people complain, Apple then says "It's BETA". That's misleading and frankly dishonest, but probably legal in the USA.

This appears to be just the same: advertise 4G, and in the small print, point out that you will probably never get 4G. It's dishonest.

Re:IMHO Apple is becoming a scummy advertiser

[xSacha]

Uh, it's US which runs on different bands to the rest of the world.
Europe and Asia are using Australia's bands.

While Telstra is the only one with a 4G network right now, Optus is launching one in a month and Vodafone is soon to follow.

Re:IMHO Apple is becoming a scummy advertiser

[_xen]

This appears to be just the same: advertise 4G, and in the small print, point out that you will probably never get 4G. It's dishonest.

Moreover outright dishonesty is not an element the ACCC needs to prove. The claim need not even be false, it need only be misleading

The relevant provision in the new Australian Consumer Law which replaces the old s52 Trade Practices Act 1974 and which the legislature in its inimitable wisdom has chosen to bury in Schedule 2 to the Competition and Consumer Act 2010, reads:

18 (1). A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Re:IMHO Apple is becoming a scummy advertiser

[Dodgy G33za]

Typical bloody city dweller.

This luddite, like a lot of luddites in this country is clinging on to analog TV because we do not and will not have a digital broadcast in our area. We are going to have to go to satellite if we want to continue to receive free-to-air.

I am not sure why Telstra is responsible for the frequencies used to broadcast analog TV, but am happy to be enlightened.

As an aside I can't really claim to be clinging on to analog - I have a TV aerial I set up for the Australian Open or football championships, but otherwise I am happy streaming video via mobile, which works quite nicely thanks very much.

Re:IMHO Apple is becoming a scummy advertiser

[whoever57]

Actually, in this case, it's not Apple's fault, which I fully expect them to stand up in court and say.

I make a clear distinction between what is legal and what is ethical. Advertising a a 4G capability that none of the buyers will ever be able to use unless they travel abroad and then buy service is unethical. Telstra may deserve some crticism for only providing 4G on a limited range of frequencies, but that is irrelevent to the fact that the advertisements are highly misleading. Apple knew that the 4G would not work in Australia, yet they decided to advertise it anyway.

Car analogy: car maker advertises car with 1000 mile range, except that it needs unobtanium for fuel in order to get the 1K mile range. According to you, the fault would lie with the fuel companies for not selling unobtanium.

Re:IMHO Apple is becoming a scummy advertiser

[unreadepitaph]

Let's have a look at 4G around around the world shall we?
http://www.worldtimezone.com/gsm.html
Oh look! It would appear that THE MAJORITY OF THE WORLD uses the 900/1800 GSM band.

Apple intentionally mislead consumers, and they were warned prior to the iPads release by the ACCC that what they were doing was in breach of advertising laws.
I've spoken to many CEO's (I work helpdesk for a private hospitals) who wanted to order the iPad and when I told them it wasn't 4G compatible in Australia they were all shocked to hear it. I would assume this is the same with many other consumers as well.

Re:IMHO Apple is becoming a scummy advertiser

[xSacha]

You can easily get WiFi in your house and it is known you will need to transmit WiFi to receive it. Worst case scenario you can go to a coffee shop and get WiFi.
But the 4G on the tablet won't receive the 4G that the local Telcos provide. If you want to use that 4G, you'll have no luck in Australia, Europe, Asia. You have to go to North America!

Re:IMHO Apple is becoming a scummy advertiser

[Whiney Mac Fanboy]

which operates on a different spectrum than the 4G networks used everywhere else in the world

WTF are you talking about? The LTE ipad uses 700, 2100 MHz bands, and according to Wikipedia's 3GPP LTE page:

The LTE standard can be used with many different frequency bands. In North America, 700/ 800 and 1700/ 1900 MHz are planned to be used; 800, 1800, 2600 MHz in Europe; 1800 and 2600 MHz in Asia; and 1800 MHz in Australia.

The US & Canada are the only countries in the world with LTE networks fully compatable with the ipad.

US !=The rest of the world.

Re:IMHO Apple is becoming a scummy advertiser

[Whiney Mac Fanboy]

I guess the question would be... is it's Apple's responsibility to manage the wireless carriers infrastructure?

It is Apple's responsibility to manage their advertising, ensuring that when they advertise a device is 4G compatible, that is is compatible with whatever 4G means in the country they're advertising.

For instance, if a Swedish company was advertising a free slut with each car sold, and it turned out that all you got was the ability for the car to stop (slut means stop in swedish), you'd be.... disappointed wouldn't you? Well, this is the same thing. A company using a local definition in a foreign market to confuse the marketplace.

Apple also claims all iPads have WiFi but if you don't have WiFi at your house, should you sue Apple for false advertising?

This analogy is so fucking stupid that my brain has shrunk slightly upon reading it. How about this? If Apple claims a device has wifi, but it is not compatible with the local regulatory requirements for wifi, then yes, they will get sued.

Re:IMHO Apple is becoming a scummy advertiser

[Dexter Herbivore]

This is the point, and why the ACCC is suing. Apple's advertising states that 4G is a feature even though it's unavailable in Australia.

Re:IMHO Apple is becoming a scummy advertiser

[jimi1x]

A disclaimer in the T&S is not sufficient under Australian advertising laws. Under Australian law the product must work as the consumer expects, no the other way around. So a consumer seeing an iPad 3 with 4G would reasonably expect it to work on a 4G network. Putting something in the fine print does not alleviate a company of their responsibility. From what I understand our consumer laws over here in Oz are much fairer to the consumer than they are in the US.

Re:IMHO Apple is becoming a scummy advertiser

[ATMAvatar]

Whenever there is a global standard and a question on whether the US is following it, the safest best is that the US isn't.

Re:IMHO Apple is becoming a scummy advertiser

[arisvega]

Actually, in this case, it's not Apple's fault ..

Actually, it is.

The case may be a bit shaky, though, ..

No it mightn't. It looks pretty straightforward to me. See below.

as Apple does state in the fine print: '4G LTE is supported only on AT&T and Verizon networks in the US;

Oh I get it- so as long as it does state it in the "fine print", then Apple et. al. are allowed to perform misleading advertizing? Or is there another point here that I am missing?

Sorry about the tone, but I tend to be overenthousiastic when consumer protection laws bite megacorps in the arse.

Re:IMHO Apple is becoming a scummy advertiser

[Anonymous Coward]

Except it's a single retailer that puts those stickers on, and "big sticker you see after you bought the gadget" barely counts as advertised when compared with "proudly presented on apple.com.au with tiny footnote saying (only in US and Canada)".

Does fine print supercede large print?

[hawguy]

The article says that the fine print may make the case shaky:

The case may be a bit shaky, though, as Apple does state in the fine print: '4G LTE is supported only on AT&T and Verizon networks in the US; and on Bell, Rogers and Telus networks in Canada. Data plans sold separately. See your carrier for details.'"

But why can the fine print supercede what's in the main ad? How can an ad for a 4G device in Australia be legal if that device will never be able to work in Australia? They can list the 4G for USA and Canada on the specs page. As another example, if an ad screams "Unlimited 4G data!!!" in large print, they shouldn't be able to write "Unlimited plans subject to data caps that we won't reveal to you and throttling back to speeds slower than 2G speeds" down in the fine print. If it says "Unlimited" in the large print, then it really should be "Unlimited". Fine print shouldn't be able to contradict the main body of the ad.

Re:Does fine print supercede large print?

[robbak]

The Australian courts have answered this many times: It does not. Fine print does not even trump customers logical expectations.

The only thing that may save Apple is that the boxes have quite a large sticker on the back that states that the 4G capability is not compatible with any Australian network. Assuming that Apple has not advertised 4G in any Australian-targeted advertising, they should be OK.

If they have, then fines and forced offers of refunds will be in their future.

Re:Does fine print supercede large print?

[xSacha]

I thought that sticker was added by Telstra. You only see that if you buy the iPad directly from Telstra. Any other retailer and you won't have a clue.

Re:Does fine print supercede large print?

[whoever57]

Assuming that Apple has not advertised 4G in any Australian-targeted advertising, they should be OK.

Read this page and then note the "au" in the URL, not also the prices in Austalian dollars. It is clearly targeted to Australia and it highlights 4G capability.

Re:Does fine print supercede large print?

[Splab]

The Danish watchdog is also preparing suit against Apple for the exact same - here in Denmark, the sticker definitely wont be enough.

Re:Does fine print supercede large print?

[Anonymous Coward]

Oh it gets even better than that, check out this apple page - which not only says "4G" but also lists Optus, Telstra, and Vodafone as offering compatible data plans.

Re:Does fine print supercede large print?

[bloodhawk]

The fine print doesn't make the case shaky at all. In Australia if your ad can be misconstrued as advertising something they don't provide, then no amount of fine print, small print, eula or any other disclaimer they want to add will excuse them from the false advertising laws. They are there to protect consumers from being tricked into making a purchase based on misleading advertising and the litmus test is whether a reasonable person could be fooled into thinking that buying a IPAD 3 would give them 4G access in Australia, given the ads that is a pretty definite yes.

Re:Does fine print supercede large print?

[T-Bone-T]

My iPhone doesn't support 4G but it "supports" it because AT&T renamed 3G to 4G.

Re:Silly

[inflex]

We do have 4G here in Australia, it's just on a band that the Apple iPad doesn't support.

Re:Silly

[PigIronBob]

The Crux of the matter here is that 4G is available in Australia, Apple just can't be bothered making the iPad compatible with the Australian Network, yet advertises as if it were, that is false advertising in anyones book.

Re:Wtf frequency limits?

[morcego]

Even if the radios can, the main problem is the antenna. Specially if you need power efficiency, which is the case of mobile devices. Losing 60% of your output power due to antenna impedance difference is not something you can afford to have. And that is only one of the issues, the first one that poped in my head, actually. I'm sure there are many others.

NZ watchdog receives complaint over iPad 4G

[Anonymous Coward]

The Commerce Comission (equivalent of the ACCC in Oz, or the US FTC) in New Zealand is also considering the same action against Apple (and there are exactly zero 4G networks here)
Commerce Commission investigating Apple iPad 4G adverts after Complaint

Re:Who defines what "G" some thing is?

[snookums]

The ITU

Indeed. And according to the ITU, HSPA+ is "4G" and you can use the iPad 4G on Telstra's HSPA+ network, thus achieving a "4G" connection.

The problem stems from the fact that in Australia only Telstra's LTE network is advertised as "4G", and it is this network that the iPad is not compatible with. So, technically you can get a 4G connection on the new iPad, but Apple may be in trouble if it is determined that their advertising leads customers to believe that the device is compatible with the Telstra-advertised "4G" network.

Re:Silly

[batkiwi]

By the rest of the world do you mean "The USA" or by the rest of the world do you mean "The rest of the world" ?

Because in Europe, Australia, and Asia 1800 is the standard frequency, with 2600 and 800 being also considered.

In the USA it's 700 and 1700/1900.

Re:Who defines what "G" some thing is?

[mjwx]

If I had a company that made the relevant toys, could I advertise them as "5G", or even "6G"?

Who decides what qualifies?

The ITU (International Telecommunications Union), but telco's have co-opted this to the point that the ITU has said, there will be no 5G.

The original ITU 4G specification was 100 Mbps fixed and 40 Mbps mobile, not even LTE can guarantee this, LTE Enhanced (Advanced, cant remember which) would have been the first but US telco's wanted to brand HSPA+ as 4G and the ITU capitulated.

BTW, Ipads and Iphone dont even support HSPA+