UK market abuse suit seeks up to $935M from Apple for 'secretly throttling' iPhones
A class action style lawsuit is being launched against Apple in the UK seeking damages worth a total of £768 million (circa $935M).
The representative action is being filed by consumer rights campaigner, Justin Gutmann, citing competition law -- with the suit accusing the mobile maker of abusing its market dominance to engage in exploitative and unfair commercial practices when, per the claim, it misled iPhone users by applying a power management software update, first released in January 2017 in iOS 10.2.1, that throttled the performance of affected devices.
The suit is being filed in the Competition Appeal Tribunal in London on behalf of up to 25 million UK iPhone users who used any of 10 different models of iPhone, from the iPhone 6 through to the iPhone X (and including the iPhone SE).
The litigation, which is being bankrolled by a litigation funder called Balance Legal Capital , is opt out, not opt in -- meaning affected UK consumers do not need to actively sign up to be part of the representative suit (although they would need to provide their details at a later date if the suit prevails and wish to receive their portion of any damages -- albeit, damages could be as low as ~£30 per affected device).
A website has been launched with details about the suit at https://theiphoneclaim.com/.
Apple has already faced litigation over iPhone performance 'throttling' claims in a number of other European markets.
Back in 2020, it also settled a class action suit on home turf which had similarly accused it of intentionally slowing down the performance of older iPhones to encourage customers to buy newer models or fresh batteries -- shelling out up to $500M to make the litigation go away, albeit doing so without accepting wrongdoing.
In the same year, France's competition watchdog fined Apple around $27 million for throttling older devices without informing users. In that instance Apple paid the fine and agreed to display a statement on its website about the sanction for a month.
While, in 2018, Italy's consumer watchdog stung Apple (and Samsung) with smaller financial penalties for forcing updates it found could slow or break devices.
The latest UK action over the throttling issue follows what Gutmann describes as expert analysis carried out by technical experts instructed by his lawyers, Charles Lyndon Ltd, which he said demonstrates that Apple's tool was introduced with the aim of reducing the demands on the battery, which had the effect of slowing the processor’s speed at peak performance by up to 58% in the case of the iPhone 6s and 7.
The complainant further claims Apple mislead consumers because information about the tool was not included in the iOS 10.2.1 update's download description -- meaning users were not made aware ahead of time of the detrimental effect it would have on their device.
Instead, users who failed to update to the latest iOS version were told they risked exposure to bugs and security flaws by missing out on key security updates. And the suit also claims some users will have been prompted up to 70 times to install the update in notifications, while those who did accept the update were unable to uninstall it, meaning they were stuck with any negative impact on their device performance.
Apple did later add mention of the tool to the release notes on its website but, again, the complaint will argue it misled customers by failing to make it clear the tool would slow device performance -- only stating the update “improves power management during peak workloads to avoid unexpected shutdowns on iPhone.”
It also went on to apologize over its handling of the episode -- and ran a battery replacement scheme through 2018 for all affected iPhone models -- but Gutmann also accuses the company of failing to sufficiently publicize that program.
Commenting in a statement, he said: “Instead of doing the honourable and legal thing by their customers and offering a free replacement, repair service or compensation, Apple instead misled people by concealing a tool in software updates that slowed their devices by up to 58%."
“I’m launching this case so that millions of iPhone users across the UK will receive redress for the harm suffered by Apple’s actions. If this case is successful, I hope dominant companies will re-evaluate their business models and refrain from this kind of conduct,” he added.
Asked why the suit is being filed now, a spokesperson for the claimant said that along with his solicitors he's been working on the claim for "some time". "It takes time to build a claim like this, including investigating the technical aspects of it, and we are now in the position that we are ready to file," they added.
"You are correct that a number of similar class actions have been filed. Although none of the European actions have yet been successful, Apple has been fined by the French and Italian regulators in relation to this conduct and has settled a number of class actions in the U.S. Mr Gutmann understands that consumer law class actions have been certified in Canada and Spain; and that class actions have been filed (but not yet certified) in Belgium, Italy and Portugal."
Earlier this year a separate class action style litigation was launched in the U.K. against Facebook's parent, Meta -- which is also seeking to use competition law as a route to extract damages from a tech giant.
Privacy law-focused representative actions suffered a set back in the U.K. last year when the Supreme Court sided with Google -- ending a long running litigation over a workaround it had applied to Apple's Safari between 2011 and 2012 which overrode iPhone users' privacy settings.
In the Safari workaround case the class action style litigation failed as the court deemed it necessary to demonstrate damage/loss on an individual basis, rather than agreeing uniform compensation could be applied -- so it will be interesting to see whether litigation lawyers have more success using competition claims to extract representative damages over harmful Big Tech practices, either in court or through out of court settlements.