Apple offers refund to iPad customers in Australia over 4G issues

Apple Inc.

(CBS News) Apple has offered to refund customers in Australia who felt they were misled by the new iPad's promise of working on the country's biggest 4G network.

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The Australian Competition and Consumer Commission (ACCC) has accused Apple of misleading customers by labeling the iPad as 4G-capable, which would be a violation of Australia's consumer laws.

"Apple's recent promotion of the new 'iPad with Wi-Fi + 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.

The issue is that Apple's new iPad doesn't work with Australia's largest 4G network - Telstra. That's because Telstra's 4G network runs at a different frequency - 1,800 megahertz - than the U.S. or Canada. The new iPad requires a 4G network that runs on 700MHz or 2,100MHz. According to Fox News, the new iPad is not slated to pick up an Australian 4G signal until 2015.

According to ZDNET Australia, the ACCC alleges the Apple violated sections 18, 29(1)(a), 29(1)(g) and 33 of the Australian Consumer Law.

"Section 18 covers misleading and deceptive conduct, section 29 covers false or misleading representations about goods or services and section 33 covers misleading conduct as to the nature of goods," ZDNET Australia's Luke Hopewell explained.

However, Apple denies any wrongdoing. The company's website states that the new iPad would only run on selected 4G LTE networks in the U.S. and Canada.

Apple's lawyer Paul Anastassiou told a federal court in Melbourne that Australia does have networks that are equivalent to 4G networks overseas, ZDNET Australia reports. But, the company is prepared to inform customers that the new iPad isn't compatible with Telstra's 4G network.

According to the BBC, the case will go to full trial on May 2.