Nov 18, 2020 - Technology

Apple settles with states for $113 million over slowed iPhones

Photo of an older iphone with a dead battery symbol

Photo: Dominic Lipinski/PA Images via Getty Images

Apple will pay states $113 million in a settlement over allegations that the phone maker secretly throttled speeds on older iPhones to extend battery life, Arizona Attorney General Mark Brnovich announced Wednesday.

Driving the news: 34 states were involved in the investigation, which alleges that starting in December 2016, Apple released a software update reducing performance to keep some iPhones from unexpectedly shutting down.

  • The states allege Apple did this without telling customers or offering battery replacements.

Why it matters: The settlement comes as Apple is facing scrutiny from Capitol Hill and elsewhere on antitrust matters, especially for its rigid App Store policies.

  • On Wednesday, Apple announced it would be taking a smaller cut from App Store sales for businesses that earn less than $1 million selling their apps, reducing the 30% commission to 15%.

What they're saying: The state attorneys general allege that Apple's failure to inform customers about the battery issues helped it sell more iPhones to customers whose devices had slowed.

  • "What became clear in this case, when we sat down with officials from Apple, is there was a disconnect with them seeing why this could be a problem," Brnovich told Axios. "They thought they did absolutely nothing wrong. ... Sometimes with people in the tech industry, they don't always appreciate an average consumer understands the product as well as they do."

Apple also agreed to tell customers the truth about battery health, performance and management, as part of the settlement.

  • Apple still denies the allegations and has admitted no wrongdoing or violation of the law.
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