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Apple to pay millions for 'misleading' iPad branding Down Under

  • The new iPad features a sharper screen and a faster processor. Apple says the new display will be even sharper than the high-definition television set in the living room.Apple

  • The new iPad features a sharper screen and a faster processor. Apple says the new display will be even sharper than the high-definition television set in the living room.Apple

  • March 7, 2012: Apple's senior vice president of Worldwide Marketing Phil Schiller stands in front of an old iPad, left, and new iPad, right, during an Apple event in San Francisco.AP Photo/Paul Sakuma

  • March 7, 2012: Apple's senior vice president of Worldwide Marketing Phil Schiller discuss features of the new iPad during an event in San Francisco.AP Photo/Paul Sakuma

Apple has accepted a fine of more than AU$2 million (US$1.9 million) after agreeing branding for its new iPad may have misled consumers to believe the tablet could connect to the fourth-generation cellular networks operating in Australia.

A federal court in Melbourne heard Friday that Apple had agreed to pay AU$2.25 million to settle a case brought against it by the Australian Competition & Consumer Commission, as well as the commission's costs of AU$300,000. The settlement has yet to be approved by Mordecai Bromberg, judge in the hearing.

The case centers on sales of a version of the popular iPad device initially sold as iPad "Wi-Fi + 4G." Colin Golvan, a lawyer for the commission, said the designator misled consumers to believe it was compatible with Telstra Corp.'s 4G LTE, or long-term evolution protocol, network in Australia -- the first such network to be rolled out in the country.

The device, which also comes in a version that only connects to the internet over Wi-Fi networks, is now sold in Australia and other countries as iPad "Wi-Fi + Cellular" rather than "Wi-Fi + 4G."

Golvan told the court that the term 4G is used exclusively to describe LTE networks in the country. The frequency bands allocated to run next-generation 4G networks differ from country to country and Apple's lawyers have previously argued that some network frequencies considered "3G" in Australia operate as 4G elsewhere.

He said the penalty that the two sides have agreed to was designed to be a deterrent against misrepresenting the cellular capabilities of devices. Alan Archibald, a lawyer for Apple, said the penalty agreed with the commission was "more than adequate."

Archibald also stressed the submissions to the court applied only to this case. Apple has faced accusations in other countries the device cannot connect to local 4G networks.

The Cupertino, Calif., company began selling the third version of its iPad on March 15 and by March 19 said it had already sold three million worldwide. The judge has given the parties until Wednesday to provide further information.