Apple's new iPad
ACCC sues Apple over new iPad's grossly misleading promotion of 4G compliance on its website, without clearly disclosing information of it being incompatible in Australia... Apple

Apple has offered to refund Australian customers who feel the company mislead them when advertising the new iPad's 4G capabilities. The offer comes in the wake of a backlash from an Australian consumer watchdog who threatened to sue Apple for false promotions of the new "iPad with Wi-Fi + 4G".

According to the Guardian, the tablet maker has openly admitted the new iPad does not work on Australia's 4G network. However, the company dismissed accusations of misleading customers saying its service carrier - Telstra - never promoted the new iPad as 4G compliant and instead marketed it as the "new iPad on our data + tablet bundle".

Nevertheless, the Australian Competition and Consumer Commission (ACCC) charged Apple of allegedly breaking at least four sections of Australian consumer law. The Cupertino-based company could be found guilty of blindly marketing a product as 4G compliant, despite the product being incompatible with all European 4G frequencies, including those proposed for the UK.

The new iPad connects to 4G networks on 700MHz and 2100MHz frequencies; neither of these is used by Telstra. ACCC had earlier written to Apple outlining its concerns on the eve of the tablet's launch.

However, on finding the company violating its request to change the advertising template, ACCC lodged a complaint with the Federal Court in Melbourne.

The watchdog seeks a court directive for Apple to reform advertising on its Web site and newspapers, besides dropping the "iPad with WiFi + 4G" moniker from the advertising template. Failure to comply to these requests, it is understood, could attract a sales ban in the country and/or penal consequences.

According to the BBC, Apple's defence lawyer Paul Anastassiou, at a preliminary hearing, stated the company never claimed the device would work fully on the current 4G network operated by Telstra.

The ensuing court case might actually go the full distance, as the tug-of-war between Apple and the ACCC is escalating with no viable solution in sight at the moment.