State to get $1.69 million from Apple consumer settlement

FRANKFORT, Ky. (WTVQ)Apple, Inc. has reached a settlement with Kentucky and numerous other states, agreeing to pay $113 million for violating consumer protection laws by concealing malfunctions, misrepresenting iPhone products, and throttling iPhone performance.

The settlement, reached between Apple, Inc. and more than 30 attorneys general, concludes a multistate investigation into Apple’s unfair and deceptive business practices related to the technology company’s alleged sabotage of iPhone operation speed to address unexpected shutdowns in some iPhones.

Apple, Inc. violated the Kentucky Consumer Protection Act by deceiving consumers about their products and profiting from that deception. Our Office of Consumer Protection fights on behalf of Kentuckians to ensure that companies who engage in deceptive or unfair business practices are held accountable. This settlement provides over $1.6 million to the Commonwealth and prevents Apple, Inc. from concealing information related to the performance of its products,” Attorney General Daniel Cameron said in announcing the settlement.

In their complaint, the attorneys general allege Apple consumers experienced iPhone battery issues, causing unexpected power-offs or shutdowns in iPhones as early as 2012.

Rather than disclosing these problems or addressing the issue by replacing iPhone batteries, Apple concealed this malfunction from consumers. Apple ultimately released a software update, which reduced iPhone performance or throttled the phone to keep it from unexpectedly shutting down.

In December 2017, some Apple consumers reported publicly that Apple was throttling iPhones and, shortly thereafter, Apple confirmed users’ suspicions.

Apple misled consumers into purchasing new iPhones even though a new battery would have resolved the performance issues seen by many iPhone users.

Under the settlement, Apple agreed to pay $113 million to the states. Kentucky will receive $1,696,490.38 from the technology giant for violating Kentucky’s Consumer Protection Act (KRS 367.110).

In addition to this payment, the settlement also requires Apple to:

  • Post information about iPhone performance management, lithium-ion batteries, and unexpected shutdowns in a prominent location on its website.
  • Clearly and conspicuously notify consumers of any future iOS updates that may affect iPhone performance. This notification must be provided in the installation notes of the update.
  • Provide iPhone consumers with information about the battery performance and service options in the user interface (e.g., Settings >Battery > Battery Health).
  • Implement procedures to ensure Apple customer service representatives and Apple-authorized iPhone retailers are familiar with the above requirements and refer consumers to this information when appropriate.

In addition to this settlement, Apple recently entered into a proposed settlement related to class action litigation regarding similar issues. Apple will pay up to $500 million in consumer restitution as part of the proposed settlement.

Attorney General Cameron was joined by attorneys general of Alaska, Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Missouri, Montana, Nevada, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Wisconsin, and the District Of Columbia in the settlement.

To view a copy of the complaint, click here. To read a copy of the consent judgment, click here.

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