Apple’s $500 million iPhone settlement, briefly explained

Apple has agreed to pay up to $500 million to settle a class action lawsuit over its phone batteries — and you might get a (small) cut of that.

According to Reuters, Apple will pay qualified iPhone owners $25 per phone, although this amount could be adjusted depending on how many claims are filed. (Think of that Equifax settlement that was supposed to give us $125 each, except so many people submitted a claim that it was significantly reduced). Nevertheless, the minimum amount that Apple must pay out will be at least $310 million.

The settlement will cover models 6, 6 Plus, 6s, 6s Plus, 7, 7 Plus, and SE devices that installed the software updates before December 21, 2017. If that’s you, don’t spend that $25 yet — the settlement still has to be approved by a federal judge.

The settlement comes after Apple was sued for allegedly using software updates to throttle, or slow down, the performance of older iPhone models in order to preserve the battery life. But many felt that this measure was also taken to force owners to upgrade to newer models — which would, of course, mean more money for Apple. Apple initially responded to the controversy by offering discounts on new iPhone batteries. That, however, didn’t stop the class action lawsuits from pouring in.

It also won’t stop Apple from throttling aging iPhones. The company said in November 2018 that the practice would continue for the iPhone 8, 8 Plus, and X models, explaining in a note to Congress that doing so would provide users with “a more advanced performance management system that more precisely allows iOS to anticipate and avoid an unexpected shutdown.” The difference now is that it would inform consumers that it was doing so — something it did not do before, and which raised the ire of consumers who perhaps would not have updated their software if they had known how it affect their phones’ performance.

Still, the symbolic impact of such a large settlement might lead some to wonder how Apple feels about recent pressure from Congress for the Federal Trade Commission and the Department of Justice to investigate major tech companies. After all, Apple is no stranger to lawsuits over anticompetitive behavior. The company settled a lawsuit brought by the Department of Justice over price fixing its ebooks for $450 million in 2016, with customers receiving between $1.57 and $6.93 per book. That case dragged out over several years, with Apple taking it all the way to the US Supreme Court — a much different response than this agreement to settle without admitting fault.

While the recent iPhone lawsuit is different from the ebooks situation in many regards, it doesn’t look good that Apple is paying out a nine-figure settlement linked to deceiving customers. On the same token, it probably would have looked a lot worse had Apple gone to court and lost.

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