Tim CookSource: Apple

What you need to know

  • Each affected customer could receive $25 for each iPhone.
  • The settlement needs approval from a California judge.
  • Apple has agreed to pay out $310 million to $500 million by not going to trial.

Apple has agreed to pay up to $500 million to settle a class-action lawsuit over slowing iPhones. The settlement, which still requires a judge's approval, says Apple will pay each affected customer $25 per iPhone, according to Reuters.

In the In re Apple Inc Device Performance Litigation, U.S. District Court, Northern District of California, No. 18-md-02827 case, Apple has been accused of slowing down older handsets as new iPhone models get released. By doing so, according to the case, the company had hoped to induce owners to buy replacement phones or batteries.

In the proposed settlement, which Apple agreed to on Friday, February 28, the company will deny wrongdoing. However, it will allow U.S owners of the iPhone 6, 6 Plus, 6s, 6s Plus, 7, 7Plus, or SE that ran the iOS 10.2.1 or later operating system, and U.S. owners of the iPhone 7 and 7 Plus that ran iOS 11.2 or later before Dec. 21, 2017, to file a claim.

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Lawyers for the consumers described the settlement as "fair, reasonable, and adequate." For now, Apple has refused comment.

The claim requires the approval of U.S. District Judge Edward Davila in San Jose, California, before moving forward.

According to Reuters:

Consumers contended that their phones' performance suffered after they installed Apple software updates. They said this misled them into believing their phones were near the end of their lifecycles, requiring replacements or new batteries.

Apple attributed the problems mainly to temperature changes, high usage and other issues, and said its engineers worked quickly and successfully to address them. Analysts sometimes refer to the slowing of iPhones as "throttling."

The $25 payment to consumers could ultimately go up or down, depending on how many iPhones are eligible. Regardless, Apple has agreed to a minimum total payout of $310 million.

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