Apple will pay up to $500 million to end a lawsuit claiming it intentionally slowed down iPhones (AAPL)


tim cook

  • Apple has agreed to pay up to $500 million to settle a lawsuit accusing it of intentionally slowing down certain iPhone models, as first reported by Reuters.
  • The class action lawsuit claimed Apple capped performance on older iPhones to encourage consumers to upgrade.
  • Apple said its updates were intended to prevent aging batteries from causing the phones to malfunction.
  • The company faced intense backlash in 2017 after admitting the updates slowed down phones, and has faced fines previously over the same issue.
  • Visit Business Insider’s homepage for more stories.

Apple will pay as much as $500 million to settle a lawsuit claiming the company deliberately slowed down certain iPhones in order to encourage customers to buy new ones, as first reported by Reuters.

The proposed settlement, which was disclosed on Friday, calls for Apple to pay $25 per iPhone and a minimum of $3 million, though it still needs to be approved by a judge in the US District Court for the Northern District of California.

In the class action lawsuit, customers had accused the company of misleading them by using software updates to cap the performance on iPhone 6, iPhone 7, and iPhone SE models without notifying them, causing them to assume their phones — rather than just their batteries — needed to be replaced.

Apple denied any wrongdoing in the settlement, saying the updates were intended to prevent the devices from trying to draw too much power from aging batteries, potentially causing the devices to crash.

Apple faced massive backlash in 2017 when it admitted it intentionally slowed older phones, and eventually offered to replace customers’ batteries at a steep discount. Apple was fined $27 million by regulators in France earlier this year and $5 million by regulators in Italy in 2018 over the same issue, which became informally known as “batterygate.”

While Friday’s settlement requires Apple to pay a much higher amount than in previous settlements, the fine is still just a fraction of Apple’s revenue — roughly equivalent to the income Apple makes in just over two days, based on its lastest quarterly earnings report.

Apple did not immediately respond to a request for comment.

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