Apple Inc. will pay $500 million to resolve litigation that accused the company of deliberately slowing down older iPhones in each new model launch, as a way to encourage owners to buy the newer model or replacement to old iPhones.
The preliminary class-action settlement was revealed on Friday and is set to be approved by U.S. District Judge Edward Davila in San Jose, California.
The litigation demands for Apple to pay $25 per iPhone to consumers. This figure may be adjusted depending on the number of eligible iPhones, with a $310 million minimum payout.
Apple denied the allegations and chose to settle the nationwide case to avoid paying for the costs of litigation.
Consumers argued that their phones slowed down after installation of Apple software updates. This caused them to believe their phones have reached the end of their life cycles, therefore purchasing replacements.
Attributed stated that these problems may have been the result of temperature changes and high usage. The company added that their engineers have worked on the issues and have resolved them.
Lawyers for consumers said that the $25 payment per iPhone was considerable and that the settlement was sensible and right. The lawyers said that their damage experts said that the maximum payment per iPhone was $46.
The lawyers plan to push for $93 million, or 30% of $310 million in legal fees and $1.5 million in expenses.
After the initial concerns over the slowing iPhones, Apple issued a statement of apology and reduced the price of replacement batteries from $79 to $29.
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