Apple Faces Yet Another Class Action Lawsuit Over ‘Secretly Throttling’ Older iPhones

A group of 18 individuals have filed a class action lawsuit against Apple this week in a Northern California federal court, accusing the company of "secretly throttling" older iPhones starting in January 2017.


The complaint, seen by MacRumors, refers to the iPhone slowdown saga as "one of the largest consumer frauds in history, affecting hundreds of millions of mobile devices across the globe," adding that Apple intentionally degraded devices as part of a planned obsolescence scheme to maximize profits:
While Plaintiffs and the class need not attribute any motive behind Apple's intentional degradation of the Devices, it is evident that Apple continued to do so for the simple reason most frauds are committed: money.
Apple previously denied any kind of planned obsolescence by flat out stating that it never has and never would do anything to intentionally shorten the life of any Apple product, or degrade the user experience, to drive customer upgrades:
We have never — and would never — do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades. Our goal has always been to create products that our customers love, and making iPhones last as long as possible is an important part of that.
Apple faces over 60 class action lawsuits worldwide over this matter. The first was filed in December 2017, after Apple revealed that it throttles the maximum performance of some older iPhone models with chemically aged batteries when necessary in order to prevent the devices from unexpectedly shutting down.

This latest lawsuit will likely be consolidated with the others in Northern California district court for streamlined proceedings.

Apple introduced the performance management system in iOS 10.2.1, but it did not initially mention the change in the update's release notes. Likewise, in a statement issued a month later, Apple still only mentioned vague "improvements" resulting in a significant reduction in unexpected iPhone shutdowns.

Apple only revealed exactly what the so-called "improvements" were after Primate Labs founder John Poole visualized that some iPhone 6s and iPhone 7 devices suddenly had lower benchmark scores starting with iOS 10.2.1 and iOS 11.2 respectively, despite operating at maximum performance on previous versions.

Apple apologized for its lack of communication in December 2017, and reduced the price of battery replacements to $29 for iPhone 6 and newer through the end of 2018. Apple then released iOS 11.3 with a new feature that enables users to track their iPhone battery's health and performance status.

The performance management system has also been disabled by default since iOS 11.3, and it is only enabled if an iPhone suffers an unexpected shutdown. The performance management can be manually disabled by users as well.

MacRumors put together a list of frequently asked questions and answers about Apple's performance management system, which can be avoided entirely by replacing your iPhone's battery if necessary. Read our guide on how to get an iPhone's battery replaced at an Apple Store or Apple Authorized Service Provider.

The full complaint is embedded ahead… Continue reading "Apple Faces Yet Another Class Action Lawsuit Over ‘Secretly Throttling’ Older iPhones"

Developers Sue Apple Over App Store Fees in Latest Class Action Lawsuit

Apple is facing a new class-action lawsuit from iOS developers who claim that the company uses its monopoly in the App Store to impose "profit-killing" commissions.

Filed on Tuesday in the U.S. District Court for the Northern District of California in San Jose, the lawsuit argues that the tech giant's practice of instating a 30 percent commission rate on all app sales is anticompetitive and "sets the stage for Apple to abuse its market power."

The suit also takes aim at Apple's minimum $0.99 price requirement for paid apps in the App Store and in-app purchases, as well as the annual $99 Apple Developer fee, calling these policies "especially damaging to smaller and new developers."
"Between Apple's 30 percent cut of all App Store sales, the annual fee of $99 and pricing mandates, Apple blatantly abuses its market power to the detriment of developers, who are forced to use the only platform available to them to sell their iOS app," said Steve Berman, managing partner of Hagens Berman and attorney representing the proposed class of developers. "In a competitive landscape, this simply would not happen."

"Today's lawsuit seeks to force Apple to end its abusive monopoly and allow competition in the distribution of iOS apps and related products, to get rid of its pricing mandates, and to reimburse developers for overcharges made through abuse of its monopoly power."

"We think app developers should be rewarded fairly for their creations, not over-taxed by a corporate giant," Berman said. "After 11 years of monopoly conduct and profits, we think it's high time that a court examine Apple's practices on behalf of iOS app developers and take action as warranted by the law and facts."
Hagens Berman won a suit against Apple and various publishing companies in 2016 that settled for a total of $560 million on behalf of e-book purchasers, who said they were forced to pay "artificially high prices due to Apple and the publishing companies' colluded price-fixing." That suit went to the Supreme Court, where the Court ruled against Apple.

The latest class action accuses Apple of violating federal antitrust law and California's unfair competition law.


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FTC Wins Antitrust Lawsuit Against Qualcomm, Appeal to Follow

The FTC today won its antitrust lawsuit against Qualcomm over the chipmaker's anticompetitive business practices.


As first reported by legal expert Florian Mueller on his blog FOSS Patents, U.S. District Judge Lucy Koh has ruled that Qualcomm's so-called "no license, no chips" model, under which the chipmaker has refused to provide chips to companies without a patent license, violates federal antitrust laws.

The ruling has significant implications for Apple, as Koh ordered that Qualcomm must negotiate or renegotiate license terms with its customers in good faith without threatening to cut off access to its cellular modem chips or related software and technical support, according to Mueller.

Qualcomm also must make patent licenses available to rival cellular modem suppliers on fair, reasonable, and non-discriminatory or "FRAND" terms, and may not enter exclusive agreements for the supply of modem chips.

Apple sued Qualcomm in early 2017 over these anticompetitive business practices, and unpaid royalty rebates, but the two companies announced an agreement to end all ongoing litigation worldwide last month. The settlement includes a six-year licensing agreement and a multiyear chipset supply agreement.

It's unclear if Apple had any hint that the FTC was likely to win its antitrust case and if that had any implications on its settlement with Qualcomm.

While it appears that Intel will remain the sole supplier of LTE modems in 2019 iPhones, Qualcomm is expected to supply Apple with its industry-leading 5G modems for 2020 iPhones now that the companies have settled, so Koh's ruling could lead to a fairer agreement between Apple and Qualcomm moving forward.

Farther down the road, multiple reports have indicated that Apple is designing its own cellular modems that would allow it to drop Qualcomm for good, although they might not appear in iPhones until as late as 2025.

Qualcomm will likely appeal the ruling, but Mueller believes the chipmaker faces an uphill battle given "such a rich and powerful body of evidence" regarding its anticompetitive business practices. Mueller has excellent, in-depth coverage of Koh's ruling on his blog FOSS Patents that is well worth a read.


Update: Qualcomm has announced that it will immediately seek a stay of the ruling and an expedited appeal to the U.S. Court of Appeals for the 9th Circuit.

"We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," said Don Rosenberg, general counsel of Qualcomm, in a statement shared by the Washington Post's Hamza Shaban.

Koh's complete ruling is embedded ahead. Continue reading "FTC Wins Antitrust Lawsuit Against Qualcomm, Appeal to Follow"

Supreme Court Allows App Store Monopoly Lawsuit Against Apple to Proceed

The U.S. Supreme Court on Monday ruled 5-4 against Apple in an anticompetitive case involving the App Store, allowing iPhone users to move forward with their class action lawsuit against the company, according to CNBC.


The lawsuit was filed in 2011 by a group of iPhone users who believe Apple violates federal antitrust laws by requiring apps to be sold through its App Store, where it collects a 30 percent commission from all purchases, leading to inflated prices as developers pass on the cost of the commission to customers.

In other words, the iPhone users believe that apps would be priced lower outside of the App Store, as Apple's 30 percent cut would not be baked in to prices.

The lawsuit was initially dismissed in 2013 by a California district court, due to errors in the complaint, but the U.S. Court of Appeals for the Ninth Circuit revived the case in 2017. Apple then appealed with the Supreme Court.

From the start, Apple has argued that it doesn't set prices for paid apps, and that charging a 30 percent commission on the distribution of paid apps and in-app purchases does not violate antitrust laws in the United States. In 2017, the U.S. Department of Justice filed an amicus brief in support of Apple.


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Apple Wins Lawsuit Over Group FaceTime Eavesdropping Bug

Back in January, there was a major FaceTime bug that allowed a person to force a FaceTime connection with another person, providing access to the user's audio and sometimes video even when the FaceTime call was not accepted.

The bug led to a lawsuit from Houston lawyer Larry Williams II, who claimed that the vulnerability allowed an unknown person to listen in on sworn testimony during a client deposition.


Williams filed his lawsuit in January, just a day after the bug was publicized, and yesterday, a court ruled in Apple's favor and dismissed the case. The court did not find Williams' argument that the FaceTime vulnerability was "unreasonably dangerous" to be valid, nor did the court believe that he provided sufficient evidence to prove that Apple knew of the defect.
Williams's petition does not allege facts about any available alternative design. He fails to allege facts about the iOS 12.1 software as to whether the defect that allegedly allowed a third party to "eavesdrop" on his group FaceTime call was "unreasonable" for the product's ordinary use. Williams's generalized allegation that the iOS 12.1 software was "unreasonably dangerous" and caused him injury falls short of the Rule 8 threshold.

Williams's petition recites the pleading elements, but it does not allege facts that could show Apple's knowledge of the defect or that Apple could reasonably have foreseen that an unknown third party would listen to Williams's group FaceTime call without his permission.

Williams's claim also fails because he did not state facts that could show that Apple's alleged negligent design or manufacture of the iOS 12.1 software proximately caused his injury.
In the lawsuit, Williams had requested unspecified punitive damages for negligence, product liability, misrepresentation, and warranty breach.

The FaceTime eavesdropping bug was perhaps one of the most serious issues that have affected Apple products in recent history.

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There was no way to avoid the malicious FaceTime calls, which exploited a Group FaceTime vulnerability. Apple disabled Group FaceTime server side and kept it unavailable until an update could be released to fix the issue.

The vulnerability was officially addressed in iOS 12.1.4, released in February, and Group FaceTime remains unavailable on all versions of iOS 12 released prior to 12.1.4.

Apple FaceTime Eavesdroppin... by on Scribd




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Apple Hit With Two Class Action Lawsuits Over iPhone 7 Audio Issues

Apple potentially has a legal battle on its hands over iPhone 7 audio chip issues informally known as "Loop Disease."


Two class action lawsuits filed against Apple in California and Illinois over the last week accuse the company of knowingly selling the iPhone 7 and iPhone 7 Plus with an audio chip defect that causes issues ranging from a grayed-out speaker button to customers not being heard during phone calls and FaceTime video chats.

The nearly identical complaints, viewed by MacRumors, allege that "the materials used in the iPhone's external casing are insufficient and inadequate to protect the internal parts," eventually resulting in the audio chip losing electrical contact with the logic board due to "flexion" of the device during regular use.

Apple is accused of actively concealing the defect and failing to provide free repairs to affected customers outside of a brief period last year, thereby breaching its warranties and violating multiple California and Illinois consumer protection laws.

The plaintiffs, including California residents Joseph Casillas and De'Jhontai Banks and Illinois residents Brianna Castelli, Karen Lyvers, and Matthew White, are seeking damages "likely in the millions of dollars" on behalf of all other affected iPhone 7 and iPhone 7 Plus customers in the United States.

The plaintiffs are also seeking an order that requires Apple to repair, recall, and/or replace the affected iPhones and to extend the warranties of the devices for a reasonable period of time. A jury trial has been demanded.

In an internal document obtained by MacRumors in May 2018, Apple acknowledged a related microphone issue affecting some iPhone 7 and iPhone 7 Plus models. The document, provided to Apple Stores and Apple Authorized Service Providers, described the same audio issues mentioned in the class action lawsuits.

Apple's document said service providers could request a "warranty exception" for affected iPhones, which resulted in free repairs for at least some customers, but that abruptly ended in July 2018 after Apple deleted the document.

Since then, many Apple employees have failed to acknowledge the internal guidelines ever existed, resulting in many customers having to pay an out-of-warranty fee of over $300 in the United States for a fix. Of course, some customers have managed to argue their way to a free repair, but this is not common.

iPhone 7 and iPhone 7 Plus devices still within Apple's limited one-year warranty period or covered by AppleCare+ remain eligible for a free repair, but the audio chip issues usually take time to manifest, and warranty coverage has lapsed on many of the devices since they were released in September 2016.

MacRumors has repeatedly contacted Apple for comment regarding the audio chip issues, but we have never received a response.

The complaints are embedded below. Continue reading "Apple Hit With Two Class Action Lawsuits Over iPhone 7 Audio Issues"

Class Action Lawsuit Over Broken iPhone 4, 4s, and 5 Power Buttons Finally Proceeding to Trial

A class action lawsuit originally filed against Apple in 2013 over broken iPhone 4, iPhone 4s, and later iPhone 5 power buttons is finally set to proceed to jury trial in San Diego state court beginning October 25, 2019.


The lawsuit alleges that Apple knowingly sold the aforementioned iPhone models with "defective" power buttons and refused to properly remedy the issue. For this, Apple is accused of "deceptive" or "fraudulent" business practices, breach of warranty, and violating multiple California consumer laws.

The proposed class includes California residents who purchased an iPhone 4, iPhone 4s, or iPhone 5 from Apple or a third-party retailer:
iPhone 4 and 4S Class:

All California citizens who purchased one or more iPhone 4 or 4S smartphones from Apple or a third-party retailer, from June 24, 2010 through October 10, 2011 for the iPhone 4, and from October 11, 2011 through September 20, 2012 for the iPhone 4S, and whose sleep/wake (power) button stopped working or worked intermittently during a one year period from date of purchase.

iPhone 5 Class:

All California citizens who purchased one or more iPhone 5 smartphones from Apple or a third-party retailer prior to April 1, 2013, and whose sleep/wake (power) button stopped working or worked intermittently during a three year period from date of purchase.
In April 2014, Apple initiated a program offering free repairs of a "small percentage" of iPhone 5 models with power buttons that may "stop working or work intermittently," but the lawsuit alleges that the program went "unnoticed" and began "ten months after the initial complaint in this matter."

The class action lawsuit seeks damages in an amount to be proven at trial, plus restitution, injunctive, and declaratory relief. Apple denies all of the allegations in the complaint, and denies that it did anything improper or unlawful.

As with any class action lawsuit, proposed members can do nothing to remain part of the class, or opt out to retain the right to sue Apple individually.

(Thanks, Steve!)

Tag: lawsuit

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Apple Hit With Securities Fraud Lawsuit for Hiding iPhone Sales Drop

Apple is facing a class action lawsuit accusing the company of securities fraud for making false statements and failing to disclose adverse information regarding its business prospects. These actions allegedly led to an artificially inflated stock price.

Specifically, the lawsuit claims that Apple was not initially forthcoming about a drop in demand for the iPhone due to poor sales in China and the 2018 battery replacement program, both of which contributed to lower than expected iPhone sales in the first fiscal quarter of 2019.


Apple is also accused of hiding the fact that production orders from suppliers had been slashed and prices had been cut, Apple's decision not to provide unit sales for iPhones and other hardware is also cited as a method Apple used to cause stock prices to rise to $209 per share.

When Apple did reveal the dip in iPhone sales and announced that it would not make its quarterly revenue forecast, Apple's stock fell $15 per share from $157.92 on January 2 to $142.19 per share on January 3. According to the lawsuit, Apple knew its iPhone sales weren't on track months before the information was shared.

The lawsuit, filed by the City of Roseville employees' retirement fund, is aiming to recover damages on behalf of people who purchased Apple stock between November 2, 2018 and January 2, 2019. Tim Cook and Luca Maestri are both named as defendants.

Tag: lawsuit

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Apple vs. Qualcomm Trial Begins Today

Two years after Apple sued Qualcomm over $1 billion in unpaid royalty rebates and anticompetitive patent licensing practices, the tech heavyweights are set to face off in a San Diego courtroom. The trial begins today with jury selection.


Apple manufacturers Foxconn, Pegatron, Wistron, and Compal, whose complaints have been merged with Apple's, allege that they have collectively overpaid Qualcomm approximately $9 billion in royalties, a figure that could be tripled under antitrust laws to $27 billion, according to The New York Times.

Apple argues that Qualcomm should also repay $3.1 billion associated with patents whose rights are exhausted, the report adds.

Apple in January 2017:
For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates with unique features such as Touch ID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.
Qualcomm in turn estimates that Foxconn, Pegatron, Wistron, and Compal owe more than $7.5 billion in unpaid royalties. Qualcomm also argues that Apple should be held liable for a doubled penalty of at least $15 billion.

Qualcomm in April 2017:
Apple is the world's most profitable seller of cellular devices. But as a late-comer to the cellular industry, Apple contributed virtually nothing to the development of core cellular technology. Instead, Apple's products rely heavily on the cellular inventions of Qualcomm and others. Apple's iPhones and other products enjoy enormous commercial success, but without lightning-fast cellular connectivity—enabled in large part by Qualcomm's inventions—Apple's iPhones would lose much of their consumer appeal.
Apple already won a preliminary judgment ordering Qualcomm to pay nearly $1 billion in withheld rebates last month. Qualcomm has also faced scrutiny from antitrust regulators in multiple countries, including the United States, where an FTC lawyer said evidence of misconduct is "overwhelming."

"The evidence is overwhelming that Qualcomm engaged in exclusionary conduct, and the effects of Qualcomm's conduct, when considered together, are anticompetitive," said FTC lawyer Jennifer Milici, during closing arguments in the FTC vs. Qualcomm trial in January, according to The Wall Street Journal.

Amidst the legal battle, Apple dropped Qualcomm as a supplier of cellular modems starting with last year's iPhone XS, iPhone XS Max, and iPhone XR, with rival chipmaker Intel fulfilling all orders for those devices.


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Canadian Accountant Caught Buying Nearly $7 Million Worth of iPhones and iPads With Company Credit Card

The National Post has shared the story of a Canadian accountant who was caught after buying nearly $7 million worth of iPhones and iPads with her company credit card and reselling them to the owner of a small electronics store.

Ian Gavan/Getty Images

Nadia Minetto, who was as an accounting manager at Mississauga-based software company Wescom Solutions, started buying thousands of Apple products with her company-issued American Express card in 2011. It had been her job to approve business expenses for all employees, so her spending went unnoticed.

Over the next two and a half years, the Ontario Superior Court found that Minetto sold 5,321 iPads and 4,942 iPhones to businessman Gabriel Fung, who in turn sold them at his store Plus One Solutions in the Toronto area and to wholesalers in Hong Kong, turning a profit of just over $1 million.

Fung first met Minetto after responding to her ad for an iPad on Kijiji, a popular Craigslist-like classifieds site in Canada. Their transactions eventually became more elaborate, often involving 10 to 20 devices at a time, ultimately leading to bulk shipments to the address of a virtual business set up by Fung.

The scheme came to an end in July 2014, when consultant Kristine Pacy discovered spending irregularities as Wescom was contemplating becoming a publicly traded company. The court determined that at least $6,831,834 of Wescom's money was misappropriated dating back to May 2009.

Minetto admitted to her actions and, in October 2014, she consented to a judgment in the amount of $6,831,834.17 plus interest. Wescom also won a judgment for more than $5 million against Fung, but he was awarded his cross claim for the same amount against Minetto, potentially reducing his amount owed.

This week, an Ontario appeals court dismissed Fung's appeal over his judgment, potentially bringing the case to an end.

Tag: lawsuit

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