Apple set to pay away Batterygate and audio defect lawsuits

Apple is preparing to settle two lawsuits next month over alleged iPhone flaws, provided the respective judges agree to the terms of the deals.

The first planned settlement, for In re Apple Inc. Stockholder Derivative Litigation, 4:19-cv-05153-YGR, aims to resolve investor pique over the impact of “Batterygate” on Apple stock.

Filed in 2019, the case [PDF] seeks compensation for unexplained iPhone shutdowns that started occurring in 2016 as a result of battery aging that left devices unable to handle processing demands.

“Instead of alerting customers about this solution, beginning in January 2017, Apple published iOS updates that secretly ‘fixed’ the shutdown issues by dramatically slowing the performance of older iPhone models without the owner’s knowledge or consent,” the initial complaint alleged.

“These updates silently introduced a trade-off between battery life and performance reduction without informing iPhone owners that a simple $79 replacement battery would restore both.”

This was something of a scandal at the time and led to a fine of $11.4 million from Italian regulators in 2018, a $113 million penalty extracted by 34 US states, consumer litigation that led to a settlement of $310-$500 million, and a fine of about $27 million in France. There’s also a UK claim for up to £853 million ($1.03 billion) that has yet to be resolved.

Apple investors now stand to recoup a paltry $6 million if Judge Yvonne Gonzalez Rogers approves the deal [PDF] in a hearing scheduled for July 16, 2024. That would be almost 0.002 percent of the $383.29 billion in revenue Apple collected in 2023.

The settlement, disclosed to investors in May, requires Apple to notify customers in a clear and conspicuous way when it makes changes to iOS Performance Management. And alongside increased commitments to transparency – traditionally not Apple’s strong suit – it imposes verification obligations on its chief compliance officer.

The second claim awaiting settlement approval is Tabak, et al. v. Apple Inc., 4:19-CV-02455-JST, a lawsuit over an alleged audio chip defect in Apple’s iPhone 7 and 7 Plus models that resulted in intermittent sound issues.

According to the complaint, the alleged defect was caused by solder that failed to adhere to the logic board when stressed, thereby breaking the electrical connection between the audio chip and board.

Apple has denied the allegations, but to be rid of the litigation is willing to pay $35 million to resolve the claim, provided Judge Jon Tigar approves the arrangement in a hearing scheduled for July 18.

If the deal goes through, affected members of the class could receive payments ranging from $50 to $349 for their trouble. Of the 1,649,497 Settlement Class Members, 114,684 payment forms have been submitted to the claim administrator. Those notified of membership in the class have until July 3 to respond. ®