Apple to Pay Price for Purposely Slowing iPhones

Apple is to compensate customers after claims it intentionally slowed down old iPhones to make people more likely to upgrade. Each person eligible in the class action lawsuit will get around $25, but Apple isn't formally admitting any wrongdoing.

Back in 2017 Apple admitted it had intentionally slowed down the performance of old iPhones through a software update. However, it denied this was a marketing move and instead said it was a necessary step to extend the lifespan of ageing batteries of older iPhones. Specifically it said sudden spikes in processor demand could cause older batteries to shut down as a protective measure, crashing the phone.

The resulting negative response led Apple to cut the price of battery replacements from $79 to $29. That wasn't enough for some users, who launched a court action. They said the software update gave the false impression the phone was so outdated that they needed to buy a replacement.

$25 A Head In Compensation

The case turned into a class action lawsuit which has now led to a settlement. It covers any US owners who had one of six models (6, 6 Plus, 6s, 6s Plus, 7, 7Plus and SE) and ran iOS 10.2.1 or later. (Source: theguardian.com)

Apple will pay a total of at least $310 million and a maximum of $500 million. The payout calculation will have a starting point of $25 per eligible customer. This will be increased if not enough users claim to reach the $310 million minimum, or lowered if so many people claim that the total hits the $500 million limit.

Lawyers Hit Jackpot

There will be additional payments outside of these sums for those involved in bringing the case, though it's not exactly an even split. Those customers who agreed to be named plaintiffs will get $1,500 and those who gave evidence will get $3,500. Meanwhile the lawyers will get a total of $93 million in legal fees and an extra $1.5 million in expenses.

Apple has already been fined $25 million over similar claims by French regulators. In that case the legal problem wasn't the slowdown itself - which Apple still does on older models - but rather that it didn't tell customers what was happening. (Source: bbc.co.uk)

What's Your Opinion?

Should Apple have been punished for these actions? Do you buy Apple's explanation of what it did? Are the proposed settlement amounts reasonable?