Apple slapped with a $2.25 million fine over iPad claims: Midday roundup

Apple has been ordered by the Federal Court to pay $2.25 million fine for potentially misleading consumers over the capabilities of its new iPad tablet.

Judge Mordecai Bromberg ruled today that the technology giant’s branding of its newest version of the iPad implied it could connect with fourth generation cellular networks in Australia, when it couldn’t, which effectively was liable to mislead the public and breached consumer law.

Apple had previously agreed to refund customers for the blunder.

“The $2.25 million penalty reflects the seriousness of a company the size of Apple refusing to change its advertising when it has been put on notice that it is likely to be misleading consumers,” Australian Competition and Consumer Commission chairman Rod Sims said.

“This decision should act as a renewed warning that the ACCC will continue to take action against traders who take risks in their advertising, regardless of their size.”

In his reasons for judgment, Justice Bromberg considered that Apple’s conduct was “serious and unacceptable” and stated that “the most concerning aspect of Apple’s contravention… is the deliberate nature of its conduct”.

Justice Bromberg noted that the facts of the case suggest that “global uniformity was given a greater priority than the need to ensure compliance with the ACL.”

“Those who design global campaigns, and those in Australia who adopt them, need to be attuned to the understandings and perceptions of Australian consumers,” his Honour warned.

Aussie dollar hits a seven-week high

The Australian dollar reached a seven-week high after the end of the US Federal Reserve meeting but fell back to where it began its overnight session.

At 11am (AEST) this morning the dollar was trading at US101.88 cents.

On Wednesday, the Australian dollar traded between US101.33 cents and 102.24 cents, its highest level since May 4.

But Andrew Barnett of GoldRock says the Australian dollar will rally if economic uncertainty prevails in the US.

“Sounds crazy that it will rally after bad news, but they are buying the hope of stimulus with this bad news. So quick sell offs on the bad news will likely be met with support and rallies because of Bernanke’s comments overnight,” says Barnett.

Business sentiment tumbles

The June quarter Australian Chamber of Commerce and Industry-Westpac Survey reveals a decline in general business expectations over the second half of 2012.

Manufacturing activity indicators remained mixed but were generally more subdued than in the March quarter, with most actual outcomes falling short of expectations.

The net employment indicator has remained negative, well below predictions and softer than in the March quarter and the net profit expectations indicator for the next 12 months is well down, turning negative.

Greg Evans, director of economics and industry policy, at ACCI said the results were disappointing.

“It is concerning that production costs have continued to increase strongly while selling prices have declined at a faster pace compared to the March quarter,” he said.

“These outcomes have put a further squeeze on manufacturer’s profit margins, as manifested in the negative net profit expectations indicator.

“The recent decision on minimum wages increases and the impending carbon tax on July 1st will put further cost pressure on manufacturers, particularly for small businesses.”

Sharemarket flat

The Australian sharemarket opened flat after Wall Street closed mostly lower overnight following the Federal Reserve’s less than hoped for stimulus announcement.

At the market opening, the benchmark S&P/ASX 200 index inched up 0.05 % to 4,134.6 points, while the broader All Ordinaries Index grew just 0.04 % to 4,178.8 points.