Did Apple throttle your iPhone? Settlement will give you a whopping $25

iPhone users are slated to get $25 each from an up-to-$500 million settlement of a class-action lawsuit over Apple’s decision to throttle the performance of iPhones with degraded batteries.

“For a release of their claims, Settlement Class Members will receive $25 for each iPhone owned,” the proposed settlement filed on Friday said. That amount could “increase or decrease depending on the amount of any Attorneys’ Fees and Expenses, Named Plaintiff Service Awards, notice expenses, and the aggregate value of Approved Claims.”

People eligible for the payments are US residents who used affected versions of iOS before December 21, 2017, on the iPhone 6, 6 Plus, 6S, 6S Plus, 7, 7 Plus, or SE.

The settlement, which was submitted to a judge for approval, stems from numerous class-action complaints that were consolidated into a case against Apple in US District Court for the Northern District of California. The consolidated complaint said that, in fall 2016, iPhone users experienced a shutdown problem that “resulted from a significant design defect: the battery was not designed with enough power to meet the peak demands of the phone’s processor as the battery aged. The result was that iPhones worked as expected when new, but even after a few months or years, began to cease functioning, i.e., switching off at random intervals, when the iPhone processor required too much power of its flagging iPhone battery.”

Apple was accused of concealing the defect by intentionally slowing down phone performance with a software update. “Throughout 2017… Apple failed to inform customers that the ‘fix’ to the shutdown problem in iOS 10.2.1 came with a significant—and undisclosed—tradeoff: the update artificially slowed down the processors in Apple’s Devices,” the complaint said.

If you were affected by the iPhone slowdowns, there’s nothing for you to do yet. The timeline for distributing payments hasn’t been set because the settlement is awaiting court approval.

If the settlement is approved by the court as written, a settlement administrator would use information provided by Apple to contact people who are eligible for a payment. A public notice of the settlement, after it’s approved, would help get the word out to anyone who slips through the cracks.

Apple “camouflaged” battery defects

In late 2017, independent testing found that iPhones seemed to throttle performance to preserve battery life or avoid unexpected shutdowns as batteries degraded. Apple subsequently confirmed this, apologized, and lowered the price of out-of-warranty battery replacements from $79 to $29 to make amends with customers. Apple also added a tool to iOS that lets iPhone users check the device’s battery health and an option to “disable performance management.”

The class-action complaint alleged that Apple “camouflage[d] the defects” in the devices with updates to iOS.

“In computer science parlance, Apple concealed within the iOS updates secret commands which ‘underclocked’ the processors in the affected phones, causing them to perform calculations across the board at a slower rate than the hardware was capable of supporting, and slower than they had operated before the iOS updates,” the complaint said.

This change allowed phones to operate longer with older batteries, but Apple “never asked its purchasers for their authorization to slow down their devices” and did not inform users of the change, the complaint said.

“As a result, Plaintiffs and other Class members were not notified when the power-management technique was taking effect and were deceived into thinking that their devices were no longer capable of providing an adequate level of performance,” the complaint said, pointing out that the problem could convince users to buy new iPhones.

Some people have “raised concerns that Apple engages in a ‘planned obsolescence’ scheme to send consumers rushing to upgrade their Devices,” the complaint continued. “Under any scenario, Apple’s conduct was unlawful and fraudulent, and also unfair to consumers by causing them to believe their Devices were failing.”

Apple did not admit wrongdoing. “Apple vigorously disputes the claims alleged in the Actions and is entering into this Settlement to avoid burdensome and costly litigation,” a new joint filing in the case said.

Apple’s motion to dismiss the case in August 2018 said that, while the complaint “quotes numerous statements by Apple concerning its devices and operating system, it never alleges that any of these representations was false or deceptive.”

The complaint, Apple said, “acknowledges that Apple provides a ‘one-year warranty’ for its devices and states that the ‘battery is designed to retain up to 80 percent of its original capacity at 500 charge cycles.’ Yet Plaintiffs do not allege that any battery failed to hit this target. Because ‘[a]ll of plaintiffs’ [iPhones] functioned as represented throughout their warranty periods,’ Plaintiffs have no claim.”

All parts wear out eventually, so “there is no cause of action for a product failure outside the warranty term,” Apple said.

Identifying customers

The judge in the case still has to decide whether the settlement is fair, reasonable, and adequate. A hearing is scheduled for April 3.

The proposed settlement is a minimum of $310 million and a maximum of $500 million. In addition to the $25 for iPhone users not named in the case, the case’s named plaintiffs would seek payments “of $3,500 [each] for those who were deposed in the Action and $1,500 for all others.” Attorneys would seek up to 30 percent of the minimum settlement amount, or $93 million “as reasonable attorneys’ fees, and no more than $1.5 million for out-of-pocket expenses.”

To identify people who are eligible for payments, the settlement says that “Apple will provide the Settlement Administrator with the email address of record on the Apple ID account of the members of the Settlement Class, as well as names, mailing addresses, and relevant iPhone serial numbers.” The settlement administrator would then contact those people via email or paper mail. Additionally, “A copy of the Class Notice, together with the Claim Form and various Court orders and other filings, will be posted and available for download on the Settlement Website. Finally, the Parties may jointly agree to provide additional notice with approval from the Court.”

After the settlement gets preliminary approval by the court, Apple would have 30 days to send users’ information to the settlement administrator. The administrator would then have 75 days to contact class members and put the settlement website online. Class members would then have 45 days to submit claims or object to the settlement. More court proceedings would then be needed to obtain final approval of the settlement.