Apple in $500-mln class action settlement for slowing down iPhones

Apple has agreed to pay up to $500 million to settle a class action suit that accused the company of slowing down older iPhones to make users buy new models.

CNN’s Rishi Lyengar reported the news:

Apple will pay up to half a billion dollars to settle a class action lawsuit accusing it of slowing down older iPhone models to compel users to buy new ones.

The proposed settlement agreement requires Apple (AAPL) to pay the owners of certain iPhone models $25 per affected device, totaling a minimum of $310 million and a maximum of $500 million, according to documents released on Friday in US District Court in San Jose, California. The amount each user receives could increase or decrease depending on how many claims are filed as well as any additional legal fees and expenses approved by the court, the document added.

The settlement agreement, which is subject to approval by a judge on April 3, caps a legal battle that’s gone on for more than two years during which Apple tried to ease a global backlash.

The company admitted in December 2017 that it used software updates to slow down older iPhones, soon after angry customers and tech analysts flagged that the updates were causing diminished performance. Some of them suggested that Apple did so to force users to upgrade to the latest iPhone model, but the company said it was aimed at addressing issues with older lithium-ion batteries that would make the phones suddenly shut down to protect their components.

Justin Sullivan from Wired wrote:

Apple has yet to share information on where or how consumers can file their claims, and according to one class action attorney who is not affiliated with the case, it could be weeks before Apple is compelled to pay. For now, though, the proposed settlement seems like a fair one, according to Jonathan Selbin, a lawyer for Lieff Cabraser Heimann & Bernstein and the chair of the firm’s Economic Injury Product Defect Practice Group.

“These are tough cases, particularly when you have a product that doesn’t just fail to work altogether,” Selbin says, noting that products that completely malfunction are easier to build cases around. “This seems to me like a pretty good result” for the plaintiffs.

An Apple spokesperson declined to comment and instead pointed WIRED to the court filings, in which Apple vigorously denied any wrongdoing. Reuters reported earlier that Apple “settled the nationwide case to avoid the burdens and costs of litigation.”

Adi Robertson from The Verge noted:

By default, Apple will offer $25 to any current or former owner of a covered iPhone. Named class members will receive $1,500 or $3,500, and around $90 million will go toward attorneys. The settlement has a minimum payout of $310 million, so the payment might increase if few people file claims. Conversely, if payments exceed the $500 million cap, each iPhone owner will receive less money.

The case stems from Apple’s “Batterygate” controversy. In 2017, iPhone users discovered that iOS artificially limited processor speeds as phone batteries aged. This was meant to stop real problems with performance, since it reduced stress on the battery and could prevent accidental shutdowns. But Apple didn’t reveal the feature’s existence, leading people to believe their phones were simply slowing down from age. In lawsuits, users claimed that they bought all-new devices to fix the problem — but if they’d known about this feature, they could have replaced the battery instead.

French and Italian authorities have already censured Apple for the throttling controversy, with France announcing a €25 million fine last month. The US Justice Department also announced an investigation in 2018. Apple also dropped the cost of battery replacements and offered partial refunds to some iPhone owners who paid for a new battery.