Apple Agrees to Pay $500M in iPhone-Throttling Settlement

The tentative settlement, awaiting a judge’s approval, would resolve a class-action lawsuit by consumers across the U.S. alleging Apple slowed iPhone performance to address problems with batteries and processors.

by Ethan Baron, The Cupertino Courier, Calif. / March 4, 2020
Shutterstock

(TNS) — Apple will pay owners and users of certain iPhone models up to $25 per phone as part of a settlement that, if approved by a judge, will see the Cupertino firm pay up to $500 million over alleged secret throttling of phone performance.

The deal, according to filings in federal court in San Jose, is to cover all current and former U.S. owners and users of the iPhone 6, 6 Plus, 6s, 6s Plus, and SE devices running iOS 10.2.1 or later, and iPhone 7 and 7 Plus phones running iOS 11.2 or later, who ran those operating systems before December 21, 2017.

The tentative settlement, awaiting a judge’s approval, would resolve a class-action lawsuit by consumers across the U.S. alleging Apple perpetrated “one of the largest consumer frauds in history” by secretly slowing iPhone performance to address problems with batteries and processors.

Apple, in the settlement agreement, said it “vigorously” disputed the consumers’ claims and that it cut a deal “in order to eliminate the burdens, distractions, expense and uncertainty of protracted litigation.”

The amount that eligible iPhone consumers would receive would depend on how many phones were approved. According to the settlement agreement filed Friday in U.S. District Court in San Jose, if multiplying the number of approved phones by $25 produces a sum higher than $500 million, the cash payment for each phone would be cut on a pro rata basis.

Exactly how many people might be eligible for cash is unclear, but the lawsuit claims millions in the U.S. were harmed by Apple’s alleged behavior.

Under the deal, Apple would provide a settlement administrator with the names, email addresses, mailing addresses, and iPhone serial numbers for everyone who “owned, purchased, leased, or otherwise received an eligible device, and individuals who otherwise used an eligible device for personal, work, or any other purposes.”

The administrator would send settlement information, including a claim form, to the email address of record on the Apple ID accounts of everyone eligible to get settlement money. If Apple does not have a valid email address for an eligible person, the administrator would mail settlement information to that person, according to the agreement.

According to the lawsuit, reports of unexplained iPhone shutdowns began to surface in 2015, accelerating in the fall of 2016. Consumers were complaining that their phones were shutting off even though the batteries showed a charge of more than 30 percent, the suit claimed.

“Worse, these devices could not be powered back on unless plugged into a power socket – a problem that Apple later admitted would be an ‘inconvenience’ given that these are mobile devices,” the suit alleged.

In November 2016, Apple admitted there was a problem with a small range of serial numbers within the iPhone 6s line, and offered free battery replacements for devices in the range, the suit said. But media reports pointed to a much broader problem, and in early 2017 Apple released a software update it said had largely fixed the shutdown problem, the suit claimed.

However, the company’s statements about the issue were intended to conceal a “mismatch between the devices’ hardware, including their processing chips and rechargeable lithium-ion batteries, and the ever-increasing demands placed on the devices via Apple’s constantly-updating iOS software platform,” the suit alleged.

“The software update did not ‘fix’ or ‘cure’ the defect – it instead concealed it by secretly throttling the devices’ performance to reduce the number of unexpected shutdowns to a more manageable volume,” the suit claimed.

Apple, in a January 2019 court filing, argued that lithium-ion batteries are “consumable” and become less effective with time, repeated charging, extreme temperatures and general use. “As a result, when power demands were high, some customers experienced frustrating unexpected shutdowns of their older-model iPhones,” Apple said. The company said in the filing that the iOS 10.2.1 operating system update it released in January 2017 “included a performance-management feature that dynamically managed the performance of certain iPhones and successfully reduced the frequency of unexpected shutdowns.”

Apple argued that consumers are aware of software and battery capacities. “Software necessarily entails trade-offs,” Apple said. “Providing more features also introduces complexity and can reduce speed, and increasing features or speed may adversely impact hardware lifespan.”

©2020 The Cupertino Courier (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.

Platforms & Programs