Apple, Inc

The parties to this proceeding were Apple Inc. and the Australian Competition and Consumer Commission (ACCC). The dispute concerned allegations that Apple had engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (ACL) by representing that certain iPhones were water resistant when, in fact, they were not. The matter came before Justice Heath Wilson of the Federal Court of Australia.

The primary legal issue before the Court was whether Apple's representations regarding the water resistance of its iPhones constituted misleading or deceptive conduct under section 18 of the ACL. This involved determining whether consumers were likely to be misled by statements that the iPhones were resistant to water, and whether Apple had adequately qualified these representations with disclaimers about the conditions under which such resistance would apply, particularly concerning the use of devices in salt water or when submerged.

Justice Wilson found that Apple had engaged in misleading or deceptive conduct. His Honour reasoned that the representations made by Apple about water resistance were not adequately qualified. The disclaimers provided by Apple were not sufficiently prominent or clear to overcome the general impression conveyed to consumers that the iPhones possessed a significant degree of water resistance. The Court considered that consumers would likely understand the representations to mean that the devices could withstand immersion in water, and that the limitations on this resistance, such as the prohibition against intentional submersion or use in salt water, were not effectively communicated. The Court applied the principles of consumer protection under the ACL, focusing on the likely effect of the representations on ordinary consumers.

The Court ordered that Apple pay a pecuniary penalty of $9 million to the Commonwealth of Australia. Further orders were made requiring Apple to implement a compliance program and to provide a notice to consumers who had purchased the relevant iPhone models.