Source: US State of California
The settlement provides California with $24.6 million and terms that protect Californians’ ability to make informed purchasing decisions
SACRAMENTO – California Attorney General Xavier Becerra, alongside 33 other states and the district attorneys for the counties of Los Angeles, Alameda, Santa Clara, San Diego and Santa Cruz, today announced a $113 million settlement against Apple. The settlement resolves allegations that the company made misrepresentations about iPhone batteries and software updates that throttled processing performance in order to manage insufficient battery power in its phones. “Throttling” refers to the purposeful reduction in system performance to prevent the automatic shutdown of phones with aging batteries. California will receive $24.6 million of the total settlement, which also includes injunctive terms that will provide transparency to consumers and deter future misrepresentations regarding Apple’s battery capability.
“Apple withheld information about their batteries that slowed down iPhone performance, all while passing it off as an update,” said Attorney General Becerra. “This type of behavior hurts the pockets of consumers and limits their ability to make informed purchases. Today’s settlement ensures consumers will have access to the information they need to make a well-informed decision when purchasing and using Apple products.”
“My Office works very hard on behalf of consumer rights throughout the county and the state. We are proud to act in conjunction with the California Attorney General, district attorney offices throughout California, and attorneys general around the country to ensure that Apple is held accountable for not telling customers that their iPhones might be slowed down as a result of the upgrade,” said Alameda County District Attorney Nancy O’Malley. “When a company, large or small, acts in a manner that may mislead consumers, we will take action.”
“We are pleased that Apple Inc. has agreed to comply with state consumer laws,” said Los Angeles County District Attorney Jackie Lacey. “With this settlement, the technology company has pledged to provide clear and conspicuous communication to consumers about lithium-ion batteries, unexpected shutdowns and performance management. We as prosecutors are here to protect consumers and ensure that all companies, large and small, provide transparency so that their customers are fully informed when they spend money on products.”
“We are proud to be one of the initiating prosecutorial agencies in this consumer protection case,” said Santa Cruz District Attorney Jeffrey Rosell. “Our office works diligently to protect the people of Santa Cruz County, even against the largest corporations in the world. We are committed to protecting the rights of all California consumers, especially those in Santa Cruz County, and work collaboratively with other agencies to achieve this goal.”
California’s complaint alleges that Apple equipped their iPhone 6 and 7 generation phones with batteries that were particularly susceptible to performance loss, which led to unexpected power-offs when those batteries could not provide sufficient voltage to support phone processing performance. According to the complaint, Apple tried to manage the problem through software updates that avoided unexpected power-offs by throttling the phones’ processing performance. Apple also allegedly misrepresented the effects of the software updates by claiming they would improve power management rather than admitting that the updates would actually reduce performance.
In addition to paying $113 million, Apple has agreed to injunctive terms, which include:
- Maintaining a prominent and accessible webpage on their website that provides clear and easily visible information to consumers about how the company manages battery performance issues, such as by throttling iPhone processing performance;
- Providing a clear and easily visible notice to all affected consumers when an iOS update materially affects iPhone processing performance;
- Providing information in the iPhone settings menu about the consumer’s battery performance and maximum capacity as well as a notice of when a battery has experienced performance degradation of a significance that the consumer should service the battery; and
- Training its consumer-facing staff regarding compliance with this injunction and the information that this injunction requires Apple to provide to consumers.
Apple has also settled private class action litigation that resulted in up to $500 million in restitution for consumers who were affected by the misconduct alleged in California’s complaint.
A copy of the complaint and California’s stipulated judgment are available here and here. The judgment remains subject to court approval.