Apple and the Australian consumer regulatory authority’s case rumbles on: ACCC seeks $2.25m bite from Apple

Posted: June 8, 2012 in Business Management
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We have been following this story on Wellthisiswhatithink. As it is still in front of the courts, we make no further comment, but simply reproduce the wider news coverage today of this fascinating case below …

Oooooops.

The Australian competition watchdog is seeking a $2.25 million fine against Apple for selling its new iPad as “wifi + 4G” when the device did not work on any existing Australian 4G networks.

The case was adjourned until next Wednesday to allow Justice Mordecai Bromberg of the Federal Court in Victoria to receive some confidential information about Apple’s operations in Australia.

Apple and the Australian Competition and Consumer Commission have asked Justice Bromberg to approve the proposed fine for misleading and deceptive conduct.

However, Justice Bromberg told the parties he was unhappy with the lack of information provided to the court about Apple’s financial position, the number of iPads that had been sold using the “Wifi + 4G” name and how many had been returned, and the difference between how the iPads would work on a 3G or 4G network.

“Surely the parties can at least put before the court some meaningful facts that identify a disparity between the products,” he said.

Alan Archibald, QC, acting for Apple, told the court it was irrelevant how many iPads had been sold or returned because Apple had offered to provide full refunds, so there was no loss to customers.

“What conceiveable damage might there be?” he said.

“This is a case of absence of loss – whatever the level of sales, there cannot be loss because anybody concerned about it could reverse the acquisition.”

Smaller bite

Mr Archibald argued that the $2.25 million fine should be reduced because of the absence of any loss to consumers. However, he did assure the Judge that there was “no question at all about [Apple’s] financial capacity to meet the penalty”.

Apple agreed to provide Justice Bromberg with confidential information about its financial position and the number of devices sold to allow him to judge whether the proposed penalty was appropriate.

“The parties face the risk that I might come to a view that I do not have sufficient agreed facts before me to be able to properly assess,” Justice Bromberg warned. He said he would reach a conclusion soon after receiving the new information.

Apple advertised its new iPad as “Wifi + 4G” from 8 March until the ACCC took it to court on March 28. Apple agreed to place notices at the point of sale explaining the devices did not work on any 4G or Wimax networks in Australia. On May 12 it changed the name to “Wifi + Cellular”.

This proposed fine is half of a potential $4.4 million fine which could be imposed on Apple for four contraventions of Australian Consumer Law.

The ACCC and Apple have agreed there were four contraventions when it advertised the product online, in signage, in the promotional material provided to resellers, and in the promotional material provided on Apple’s website.

(With thanks to The Age, and BusinessDay, and others)

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