Apple Inc. faces a legal battle in Australia after a consumer watchdog Tuesday alleged it misled the public about the 4G capability of its new third-generation iPad device in the country.
The Australian Competition & Consumer Commission, or ACCC, said it will make an application to the Federal Court in Melbourne Wednesday, accusing Apple of breaches of consumer law over its marketing of the device.
“The ACCC alleges that Apple’s recent promotion of the new ‘iPad with WiFi + 4G’ is misleading because it represents to Australian consumers that the product can, with a SIM card, connect to a 4G mobile data network in Australia, when this is not the case,” the ACCC said in a statement.
A spokesperson for Apple in Australia couldn’t comment on the matter when called.
Apple’s third-generation iPad went on sale earlier this month and the company said it has been its strongest iPad launch to date. Australia was the first country in the world where the new tablet was available, and it was snapped up by hundreds of queuing shoppers on the opening day of sales.
Executives at the company said global sales of over three million had already been recorded earlier this month. The technology giant Monday bowed to mounting pressure to return some of its roughly US$100 billion in cash reserves to shareholders by saying it would issue a dividend and buy back stock.
ACCC said it is “seeking urgent interlocutory relief to ensure consumers are made aware of the correct capabilities of this device,” and added further that it wants measures including “injunctions, pecuniary penalties, corrective advertising and refunds to consumers affected.”
Super-fast 4G Long Term Evolution, or LTE, wireless coverage is only available in very limited areas in Australia and only through Telstra Corp. (TLS.AU). The network is currently accessible in all state capital business districts, associated airports and some regional locations. Rival company Optus, owned by SingTel (Z74.SG), is in the process of rolling out its own 4G network.
But the frequency used by the network prevents Apple’s 4G-compatible devices from achieving high-speed internet connectivity.
On its web site, Apple states, “4G LTE is supported only on AT&T and Verizon networks in the U.S. and on Bell, Rogers, and Telus networks in Canada. Data plans sold separately. See your carrier for details.”
Jonathan Hakim, a 22-year-old postgraduate student studying neuroscience, who was first on March 17 to walk out of Apple’s glass-fronted signature store in Sydney with a new iPad 3 said he was aware that the device wouldn’t work on current 4G networks in Australia.
“That’s why I just got the Wifi version” said Mr. Hakim in a phone interview Tuesday. “Most of the people I spoke to in the queue knew that the 4G version wasn’t compatible here.”
Mr. Hakim was one of hundreds of shoppers to queue outside the Apple store in Sydney ahead of the official sale of the tablet. In Australia, Credit Suisse in June estimated the company had sold over 500,000 iPads
