Tripp Mickle and Kirsten Grind report in the Wall Street Journal:
Five dozen iPhone customers have filed at least 59 separate lawsuits accusing Apple of slowing their phones to spur people to buy new iPhones. The lawsuits allege Apple misrepresented the scope of the problems, and failed to inform users that upgrading to new systems slowed down the phone. The suits seek an financial award, attorneys’ fees and free iPhone battery replacements, as well as a corrective ad campaign.The controversy and $29 battery offer could (cause Apple to) lose $10.29 billion in revenue this year because of customers choosing to replace batteries instead of their iPhones.
Dozens of iPhone owners are taking Apple Inc. AAPL +0.40% to court over its disclosure that it slowed down old phones to preserve battery life, in what could become one of the biggest legal challenges involving the company’s smartphone since its 2007 debut.
Some five dozen iPhone customers have filed at least 59 separate lawsuits since December accusing Apple of slowing their phones to spur people to buy new iPhones, according to court records. Apple said in December that its software update introduced at the start of 2017 reduced the performance of older phone models. The suits seek an unspecified financial award, attorneys’ fees and free iPhone battery replacements, as well as a corrective advertising campaign.
The lawsuits also seek class-action status. Efforts to combine the cases will kick off at a legal meeting in Atlanta, setting in motion an effort to have the class certified. A lead attorney and a court location also will be chosen.
Class-action lawsuits are frequently filed against big companies, but the large number of individual suits concerning a single issue is unusual, say legal experts. It is also roughly triple the number of suits filed in 2010 over the iPhone 4’s tendency to drop calls.
Apple settled the resulting class-action lawsuit in 2012, agreeing to either pay iPhone 4 owners $15 or give them a free case, according to Ira Rothken, an attorney who represented the plaintiffs. The total potential settlement amount was $315 million.
The latest spate of iPhone lawsuits could present Apple with unique challenges. The company is already working hard to convince consumers that its newest devices are worth $1,000 or more, as global demand for smartphones stagnates and people hold on to their devices longer.
While legal experts say the plaintiffs face an uphill battle, a multiyear court fight over the phone-throttling issue could force the secretive company to disclose sensitive information about its software development process, according to analysts.
Plus, a decision against Apple could require it and other tech companies to be more transparent about how their software or hardware features affect power or performance, said Mr. Rothken, who isn’t involved in this legal action. For years, companies have been able to avoid such disclosures, mainly because customers haven’t demanded them.
“Whatever affects Apple would affect anyone making battery devices,” Mr. Rothken said.
An Apple spokeswoman declined to comment. The company has previously said it would never do anything to intentionally shorten or degrade the life of any of its devices, adding that Apple’s goal is to make iPhones that last as long as possible.
The lawsuits could also prolong the negative publicity surrounding Apple’s slowing of the phones. “It’s the brand damage that is even more risky and expensive for Apple,” said Holger Mueller, a technology analyst with Constellation Research.
Apple also is being investigated by the Justice Department and Securities and Exchange Commission over potential securities violations related to its disclosure of the software updates that slowed older iPhones. It has faced questions from consumer and watchdog groups in France, Italy and China.Newsletter Sign-up
Apple’s predicament started after the company, prompted by questions from users and analysts, said it introduced the software update to prevent older iPhones with aged batteries from unexpectedly shutting down. In late December, Apple apologized and said it would reduce the out-of-warranty cost of battery replacement to $29 from $79 for most customers.
Some of the current lawsuits are alleging that Apple misrepresented the true nature and scope of the battery problems to customers, and failed to inform users last year that upgrading to new operating systems would force them to add a feature that slowed down the phone, according to court records.
“To encourage consumers to purchase the newest iPhone in such short intervals, Apple has to convince consumers to upgrade their device,” according to one complaint filed in federal court in Northern California. “One way to do that is by reducing the performance of older iPhones.”
Larry Pethick, a 50-year-old resident of Grand Rapids, Michigan, said his iPhone 6 started taking longer to load apps and activate the GPS last fall after updating to a new operating system. Mr. Pethick said he had lost his job that fall and didn’t want to spend $700 on a new phone, but came to the conclusion that buying a new phone was his only option.
“The biggest frustration was that an adjustment was made that severely inconvenienced me without me knowing about it,” Mr. Pethick said of Apple’s software update. He is expected to join a class-action suit against Apple in Northern Illinois.
Apple customers could find it difficult to win their case. Fraudulent-concealment claims, such as in the iPhone instance, are often hard to prove because courts typically want to preserve companies’ freedom to choose what to say as long as it isn’t actively misleading, said RebeccaTushnet, a professor at Harvard Law School.
Apple has done enough since acknowledging the software change to make clear that it was aiming to improve user performance, said Wayne Lam, a smartphone analyst with the research firm IHS Markit , adding that the class-action suit “won’t amount to a hill of beans.”
Meanwhile, the controversy—and Apple’s $29 battery offer—may already be taking a toll on the company’s financial results. Barclays previously estimated Apple could lose $10.29 billion in revenue this year because of customers choosing to replace batteries instead of their iPhones.
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