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Apple Settles Old iPhone Throttling Lawsuit; Could Pay Up To $500 Million

By Donna Fuscaldo - Mar 2, 2020 at 11:49AM

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Late last week Apple reached a settlement in a class-action lawsuit over its move to slow down the performance of older iPhones.

Apple (AAPL -0.23%) has settled a class action lawsuit over its practice of slowing down older iPhones, agreeing to pay up to $500 million to impacted consumers. 

Citing the preliminary lawsuit settlement, which was made public late last week, Reuters reports Apple will pay each consumer $25 per iPhone.

The minimum total payout would be $310 million but it could rise to $500 million depending on the number of iPhones that are covered in the settlement. As it stands the settlement reached Friday covers iPhone 6, 6 Plus, 6s, 6s Plus, 7, 7 Plus that ran on Apple's iOS 11.2 or later. The phones had to be in use prior to December 17, 2017. 

Apple's new iPhones

Image source: Apple.

The offer still needs the nod of San Jose, California U.S. District Judge Edward Davila. Lawyers on the case are reportedly looking for $93 million of the $310 million settlement payout and $1.5 million on top of that for expenses. Apple denies any wrongdoing. 

The case stems from consumer complaints that their iPhones were slower after Apple installed software updates on the devices. Consumers assumed the batteries were getting too old and would either purchase new batteries or replace their iPhones altogether.

Users discovered Apple's new iOS limited processing speeds to reduce temperature and performance issues with the devices. Apple kept that secret, however, prompting the lawsuit. Apple lowered the price of replacement batteries from $79 to $29 and apologized but that wasn't enough to appease angry customers and regulators. In addition to the class action lawsuit, Apple was slapped with a €25 million fine by French regulators.  

Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.

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