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Hawaii to get $1.3M of multi-state settlement with Apple over iPhone throttling case

Nina Wu

Hawaii’s Office of Consumer Protection announced today that Apple Inc. has agreed to a $113 million settlement with more than 30 states regarding the company’s 2016 decision to throttle consumers’ iPhone speeds rather than revealing its battery issues.

Under the settlement, Cupertino, Calif.-based Apple will pay the state of Hawaii more than $1.3 million, which the office said will be used for continued consumer protection purposes.

A coalition of more than 30 state attorneys general, led by Arizona Attorney General Mark Brnovich, conducted a multistate investigation, and alleged that Apple discovered battery issues were leading to unexpected shutdowns in their iPhones. Rather than disclosing these issues or replacing batteries, however, Apple concealed the issues from consumers, then implemented a software update in December 2016 that reduced its iPhone performance in an effort to keep the phones from unexpectedly shutting down.

The states alleged that this concealment and decision to throttle the performance of consumers’ iPhones ultimately led to Apple profiting from selling additional iPhones to consumers.

“This settlement holds Apple accountable for concealing its efforts to deliberately slow down iPhones,” said OCP Executive Director Stephen Levins in a news release. “Its lack of transparency led people to mistakenly believe that there were problems with their phones that didn’t exist. Apple’s conduct prevented people from opting for an easy fix, replacing the battery. Instead, Apple was able to profit from its conduct by causing users to purchase new phones even though their existing phones were working fine.”

In addition to the monetary payment, the settlement requires Apple to provide truthful information to consumers about iPhone battery health, performance, and power management. Apple must provide this information in various forms — on its website, in update installation notes, and in the iPhone user interface itself.

Separately, the state Office of Consumer Protection said Apple has also agreed to a proposed settlement of class action litigation related to the same conduct. Under that settlement, Apple will pay out up to $500 million in consumer restitution.

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