Apple agrees to pay penalty over 4G iPad claims in Australia

The proposed penalty has been submitted to Australia's Federal Court for approval

Apple has agreed to pay a A$2.25 million (US$2.21 million) penalty for allegedly misleading consumers by promoting the 4G capabilities of its latest iPad despite its incompatibility with Australia's only 4G network.

The proposed settlement, submitted to the Federal Court in Melbourne on Friday, must be approved by the court, although no timetable has been set. Apple officials could not immediately be reached for comment.

The Australian Competition and Consumer Commission (ACCC) sued Apple on March 28 for allegedly violating sections of the Australian Consumer Law.

The ACCC alleged that Apple's iPad advertisements misled the public over the device's 4G capabilities. The latest iPad is not compatible with Australia's sole 4G network run by Telstra.

Telstra's 4G service operates on the 1800MHz band. But the latest iPad can only use LTE on the 700MHz and 2100MHz bands. The device is compatible with 4G LTE networks in the U.S. and Canada using data speed specifications including HSPA, HSPA+ and DC-HSDPA.

Shortly after the ACCC took the case to court, Apple agreed with some of the regulator's remedies. The company agreed to display an advisory on its website stating the device was not compatible with current 4G LTE and WiMax networks in Australia. Apple also offered a refund to customers who bought an iPad between March 16 and March 28.

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