Australian Competition and Consumer Commission v Apple Pty Limited [2012] FCA 646

Australian Competition and Consumer Commission v Apple Pty Limited [2012] FCA 646

Apple's use of the product designator 'iPad with WiFi + 4G' implied the device was compatible with the Telstra LTE 4G network, which was false and liable to mislead consumers regarding a fundamental characteristic in contravention of s 33 of the Australian Consumer Law. The agreed pecuniary penalty of $2.25 million is within the permissible range, given the seriousness, scope, and deliberateness of the conduct, mitigated by cooperation, absence of prior similar contraventions, absence of proven loss, and undertakings given to limit consumer confusion.

Parties
Applicant: Australian Competition and Consumer Commission; First Respondent: Apple Pty Limited (ACN 002 510 054); Second Respondent: Apple Inc
Jurisdiction
Australia
Judgment Date
21 June 2012
Procedural Posture
Civil Proceeding / Final Judgment
Outcome
Declaration made and orders issued; penalty and costs ordered; proceedings otherwise dismissed.
Legal Topics
Misleading Conduct, Product Representation, Pecuniary Penalty, Compatibility of Goods
Consumer Law Trade Practices Misleading Conduct Product Representation Pecuniary Penalty Compatibility of Goods

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Parties

Australian Competition and Consumer Commission

Applicant

Apple Pty Limited (ACN 002 510 054)

First Respondent

Apple Inc

Second Respondent

Procedural Posture

Civil Proceeding / Final Judgment

Legal Issues

  1. 1 Whether Apple's use of the product designator 'iPad with WiFi + 4G' constituted conduct liable to mislead the public as to a characteristic of the good, contrary to s 33 of the Australian Consumer Law
  2. 2 Whether the agreed penalty for contraventions of s 33 is appropriate

Ratio Decidendi

Apple's use of the product designator 'iPad with WiFi + 4G' implied the device was compatible with the Telstra LTE 4G network, which was false and liable to mislead consumers regarding a fundamental characteristic in contravention of s 33 of the Australian Consumer Law. The agreed pecuniary penalty of $2.25 million is within the permissible range, given the seriousness, scope, and deliberateness of the conduct, mitigated by cooperation, absence of prior similar contraventions, absence of proven loss, and undertakings given to limit consumer confusion.

Court Disposition

Declaration made and orders issued; penalty and costs ordered; proceedings otherwise dismissed.

Orders

  • Apple to pay to the Commonwealth of Australia a pecuniary penalty of $2.25 million within 14 days.
  • Apple to pay the Applicant a contribution to its costs in the amount of $300,000 within 14 days.