In a landmark settlement, tech giant Apple has tentatively agreed to pay a staggering $500 million to customers in a class-action lawsuit after admitting to intentionally slowing down older iPhones. This controversial practice, known as "Batterygate," sparked outrage among iPhone users who discovered that their devices were being throttled to conserve battery life.
The settlement, which is awaiting final court approval, is expected to provide small payouts to many iPhone owners in the United States. Additionally, named class members and attorneys involved in the lawsuit will receive greater compensation. The agreement covers individuals who purchased any product within the iPhone 6 and 7 lineup, which Apple secretly throttled without informing consumers.
By default, Apple will offer a $25 payment to any current or former owner of a covered iPhone. Named class members will receive either $1,500 or $3,500, depending on the specifics of their case.
Approximately $90 million of the settlement will be allocated towards attorney fees. The minimum payout is set at $310 million, and if fewer claims are filed, the individual payment amounts may increase. Conversely, if the total claims exceed the $500 million cap, the compensation for each iPhone owner will be reduced.
The Batterygate controversy emerged in 2017 when iPhone users noticed a decline in their devices' performance as the battery aged. Further investigation revealed that Apple's iOS intentionally limited the processor speeds of older iPhones to prevent unexpected shutdowns caused by battery stress. While the measure aimed to address a genuine problem, Apple faced criticism for not disclosing the existence of this feature. Users were left with the impression that their iPhones were simply slowing down due to age, leading some to purchase new devices instead of replacing the battery.
The settlement reached between Apple and the affected iPhone users is the culmination of a complex legal process. Dozens of class-action lawsuits were filed between 2017 and 2018, which were later consolidated into one complaint. The negotiations for the settlement took months, with the ultimate goal of resolving the various legal disputes surrounding Batterygate.
French and Italian authorities had already reprimanded Apple for the throttling controversy, with France imposing a €25 million fine on the company. The United States Justice Department also initiated an investigation into the matter. In response to the backlash, Apple reduced the cost of battery replacements and offered partial refunds to some iPhone owners who had paid for new batteries.
The settlement ensures that impacted iPhone owners receive compensation for the performance throttling they experienced. Approximately 3 million people who filed claims in the class-action lawsuit are set to receive payments of around $65 each. However, it is important to note that individuals who did not file a claim before the October 2020 deadline will not be eligible for compensation.
The delay in payments is primarily attributed to the lengthy court proceedings and appeals that followed the initial settlement. Last week, the law firm representing Apple customers announced that an appeal challenging the lawsuit was dismissed. This development clears the way for the historic settlement to be distributed to iPhone consumers affected by the software throttling.
Customers who owned an iPhone 6, 6 Plus, 6s, 6s Plus, or SE device running iOS 10.2.1 software or a later version before December 21, 2017, are eligible for compensation. The same applies to individuals who had an iPhone 7 or 7 Plus and downloaded iOS 11.2 or later before the same date. The lawsuit alleged that these software updates intentionally slowed down the performance of iPhones. Apple argued that the updates were meant to extend battery life, but the company failed to disclose the impact on device performance until after user complaints surfaced.
Apple has consistently denied any wrongdoing, maintaining that the software updates were intended to enhance user experience and address battery-related issues. However, the company ultimately agreed to settle the lawsuit to avoid prolonged and costly litigation. The settlement administrator affirmed that Apple's decision to settle was driven by a desire to prevent the burden and expenses associated with protracted legal proceedings.