Apple has agreed to pay up to $500 million to settle litigation claiming it slowed down old iPhone models to compel upgrades. On March 3, 2020, the company reached a settlement that requires it to pay consumers $25 per affected device, totaling a minimum payout of $310 million.
Settlement Details
The agreement calls for Apple to pay up to $500 million. As ordered by the US District Court, the payout is set at $25 for each affected handset, guaranteeing a minimum total of $310 million. The settlement applies to American owners of the iPhone 6, 6 Plus, 6s, 6s Plus, 7, 7 Plus or SE that were running iOS 10.2.1 or a later version. It also includes iPhone 7 and 7 Plus units bought before December 21, 2017.
The settlement is a significant development in the legal battle between Apple and its customers.
Eligibility
The settlement covers a range of iPhone models, including the iPhone 6, 6 Plus, 6s, 6s Plus, 7, 7 Plus, and SE. To be eligible, these devices must have been running iOS 10.2.1 or a later version.
Additionally, iPhone 7 and 7 Plus devices purchased before December 21, 2017, are also included in the settlement.
Background
Legal actions began in 2018, with more than 30 separate suits filed against Apple. Plaintiffs alleged that the company misled consumers by suggesting their phones needed new batteries or replacements when the slowdown was actually caused by software updates.
Apple maintained that the updates were not meant to push upgrades but to prevent unexpected shutdowns and protect internal components. Apple denied any wrongdoing throughout the litigation. Later, Apple apologized and introduced a reduced-price battery-replacement program for customers. According to Apple CEO Tim Cook, the company’s decision to offer cheaper battery replacements resulted in revenue reduction for 2018.
Legal Proceedings
The lawsuit began in 2018, with plaintiffs accusing Apple of misleading users that phones needed new batteries or replacements due to slow performance caused by software updates. Apple denied wrongdoing, contending updates aimed at preventing sudden shutdowns and protecting components.
The company’s denial was not enough to prevent the lawsuit. The settlement caps off Apple’s global legal battle lasting more than 2 years. The US District court required the company to pay consumers $25 per affected device, totaling a minimum payout of $310 million and a maximum of $500 million.
Reaction
Lawyers for consumers said the settlement is “fair, reasonable, and adequate.” The New York Post reported the same assessment, noting that the plaintiffs’ lawyers were satisfied with the outcome. Apple did not immediately respond to media requests for comment on the agreement.
Implications
The settlement is a significant development in the tech industry, with likely implications for other companies engaging in similar practices. As stated by the US District court, the settlement requires Apple to pay $25 per affected device, totaling a minimum payout of $310 million and a maximum of $500 million. According to the FTC statement: “companies must be truthful and transparent in their advertising and marketing practices.” The settlement suggests companies like Apple have a responsibility to be transparent with customers about device performance.
The fact that Apple denied wrongdoing and contended updates were necessary to prevent shutdowns and protect components was not enough to prevent the lawsuit. The settlement is a reminder that companies must prioritize the needs of their customers and be transparent in their practices.
The settlement between Apple and its customers is a significant development. The fact that Apple agreed to pay up to $500 million suggests the company recognizes its responsibility to be transparent. As the tech industry evolves, it is likely that there will be more developments in this area. The settlement is a significant step towards ensuring companies are held accountable and customers are protected.
