Apple has offered to refund Australian customers who felt misled by advertising about the 4G capability of its new iPad.
The device can only access the ultra-fast wireless network in North America.
Apple's problems in Australia could have wider repercussions in markets where Apple also advertises the iPad as featuring 4G.
This is despite those countries having an incompatible network.
In those markets the new iPad reverts to a slower 3G speed, although that does not appear to have dented robust sales of the third-generation tablet computer outside North America.
Australia's Competition and Consumer Commission has taken Apple to the Federal Court for false advertising over its "iPad with WiFi + 4G" promotion, because the popular device does not work on the local 4G frequency.
The US tech giant's lawyers said Apple was prepared to publish a clarification about the tablet's Australian capabilities, and refund any customers who felt they had been misled by the 4G reference.
Paul Anastassiou, counsel for Apple, said in court in Melbourne that the company was confident very few people would apply for a refund.
Anastassiou added that Apple was not prepared to put corrective stickers on iPad boxes, as sought by the ACCC, but would email customers to clarify that the device was not compatible with local carrier Telstra's 4G network. It would also publish notices to that effect at the point of sale "for the sake of absolute clarity".
Like in Australia, Apple's websites in Britain, Hong Kong and Singapore promise "Ultra-fast wireless. Full speed ahead." But a footnote spells out that the new iPad's "4G LTE" capability is supported only on networks in the US and Canada.
Customers at Apple's store in Singapore, where the 4G's incompatibility with local networks was widely publicised ahead of the launch, said they were not worried about the issue.
Apple said last week that it had sold three million iPads in its first weekend on the market after the new model went on sale in North America and selected foreign markets on March 16 - the strongest iPad launch yet.
It has adopted the "4G LTE" standard prevalent in the US, promising unrivalled wireless speeds. But markets including Japan have a different standard for 4G, while some such as Britain do not yet have 4G.
According to reports in the technology media, the European Union's executive commission could follow Australia's lead in taking action against Apple over the 4G marketing.
The latest case is not the first time Apple's technology has landed in Australia's courts. The firm is locked in a legal battle with rival Samsung over tablet patents, part of a wider global tussle over supremacy of the $100 billion market.