Tech giant Apple (NASDAQ: AAPL) was ordered by Australian Federal Court to explain iPad 3's internet speed and 4G capabilities.

The federal court accepted Apple's decision to make the following changes:

  • To display a statement in its promotional materials on its website and Store. The statement says, that "This product supports very fast cellular networks. It is not compatible with current Australian 4G LTE networks and WiMAX Networks."
  • To distribute the same statement to resellers to be displayed upon selling.
  • To contact persons by email for whom Apple Pty Limited has an email address and who have purchased the "iPad with WiFI + 4G" between 16 March and 28 March 2012 (including pre-orders prior to 16 March 2012) including statements to the effect that "This product supports very fast cellular networks. It is not compatible with current Australian 4G LTE networks and WiMAX Networks" and the person has the right to return the product and request for a refund within a timeframe specified in the email.

This started after Australia's consumer watchdog Australian Competition and Consumer Commission (ACCC) has taken a step further and filed a complaint to Apple for false advertising because the tablet's 4G feature does not work in the country's 4G network. One of the selling points of the latest generation of iPad is its ability to connect to 4G that enables faster download speed.

According to the ACCC, "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." ACCC filed a complaint to the federal court in Melbourne.

The Cupertino-based company, on the other hand, denied the allegations that they misled or deceive the Australian consumers but the company is willing to make some clarification.

At a preliminary hearing, Apple's lawyer Paul Anastassiou said that it never claimed that the device would work on Australia's 4G network offered by Telstra. Apple said that the new iPad works on what is globally accepted a 4G network. However, in Apple's website, it is not stated that the device will only work under supported networks in United States and Canada. Full trial of the complaint will be held on May 2.

The new iPad is the first Apple device that will use 4G mobile internet connection. This means that the connection will be five times faster than the connection offered by current networks. Unfortunately, this is found incompatible with Telstra's 4G as it uses a different frequency compared to the 4G networks based in the United States.

iPad 3 went on sale in the Australian market last March 16. ACCC is seeking injunction on sales of the new iPad, financial penalty, corrective advertising as well as refunds to consumers.

There are two devices that work under Telstra's 4G umbrella. These are the Samsung Galaxy S II and HTC Velocity 4G. The aforementioned smartphones are the devices that can connect to 4G mobile network.