Apple Pays $53 Million to Settle iPhone, iPod Touch Warranty Class Action Lawsuit
Apple’s (NASDAQ: AAPL) warranty policies seem to be giving users and the company a pain in the you-know-what lately.
After the vendor’s recent squabbles in China over its iPhone warranty policies that prompted chief executive Tim Cook to publicly apologize–and similar questions in Europe–Apple now has forked over $53 million to settle a class action lawsuit alleging it declined to honor iPhone and iPod Touch warranties.
According to the settlement document, as posted by Wired, “Apple shall deposit $53,000,000 as the settlement fund in full settlement of the claims of the settlement class.” The fund will be used to pay attorney’s fees for the class counsel, awards to the class representatives and the recipient awards. The settlement will be filed in a San Francisco, Calif., federal court next week, the Wired report said. Under terms of the agreement, Apple will set up a multi-million dollar fund for payouts to thousands of iPhone and iPod Touch users who claimed the vendor shirked its responsibility to repair or replace faulty devices under either its standard one-year or extended two-year warranty provisions.
The case, which dates to 2010, involves a number of state and federal complaints filed against Apple that eventually were combined into a single class action lawsuit slated to be heard before a U.S. District Court in San Francisco. The federal complaint, which produced some 340,000 pages of documentation, was brought on behalf of a proposed nationwide class of iPhone and iPod touch owners. Apple did not admit any culpability, as is standard in these types of deals, stating in the document that it “agreed to enter into this settlement agreement to avoid the further expense, inconvenience, and distraction of burdensome litigation.”
According to the Wired report, the devices in question include the original iPhone, iPhone 3G, iPhone 3GS, and the first-, second and third-generation iPod Touch. Estimated payouts will be about $200 per person depending on the number of claims submitted by the class.
The warranty issue relates to Apple’s “Liquid Submersion Indicator,” on iPhones and iPod Touch devices, a slip that turns a pink or reddish hue when the device is submerged under water (for whatever reason). When the plaintiffs reportedly took their malfunctioning devices in for repair, Apple declined, pointing to its policy of voiding the warranty if the damage is caused by liquid submersion, one among a host of other reasons. The problem for Apple, however, is that the indicator tapes in question can turn pink or red for a whole lot of other reasons besides getting dunked underwater, things like sweaty palms or even humidity.
While Apple isn’t copping to evidence contrary to its argument, apparently $53 million is a manageable enough sum of money to make the matter go away. Apple will notify people affected by the settlement and they can apply to be included in the award.