Misleading advertising about the iPad's 4G capabilities in the Australian market has cost developer Apple dearly, to the tune of AUS$2.5 million in fines and court costs.

The issue was first brought to light by the Australian Competition and Consumer Commission (ACCC), which claimed Apple's marketing of the new iPad misled Australian consumers into believing they could access a 4G network with the device; consumers who may not have purchased the iPad otherwise. In actuality, there are only a select number of providers worldwide supporting 4G service for the iPad, all located in North America.

The case and settlement came about despite product warning labels in the Australian market which clarified that the iPad could not connect to any 4G/LTE networks in the country, and would run at speeds of 3G. That wasn't enough to satisfy the ACCC, who deemed that selling the product as the iPad with WiFi + 4G overrode any warning labels to the contrary.

Apple in its defense claimed that the 3G networks in Australia are all but 4G in name only, conforming to accepted industry standards of what constitutes 4G speeds.

Apple first responded to the controversy in Australia by offering refunds to customers who felt they had been misled by the product marketing into purchasing the product. Apple eventually decided it would be better to simply settle the case and be done with it.

It is expected that if and when the settlement has been officially accepted by Judge Mordy Bromberg, Apple will also change the branding of the iPad in Australia to iPad with WiFi + Cellular, a move it has also made in several other countries where 4G support for the iPad is not available.

Judge Bromberg has asked for more financial details from Apple by next Wednesday before deciding whether the $2.5 million settlement is sufficient punishment.