Apple Inc (NASDAQ:AAPL) has agreed to settle allegations with 33 U.S. states that it throttled the speed of its iPhones to mask battery issues and encourage users to purchase new devices.
What Happened: California Attorney General Xavier Becerra announced the $113 million settlement, also revealing that his state would receive $24.6 million of the proceeds.
Becerra alleged that the Tim Cook-led company “withheld information” about its batteries that slowed down iPhone performance while making its actions look like an “update.”
“Today’s settlement ensures consumers will have access to the information they need to make a well-informed decision when purchasing and using Apple products,” said Becerra.
In addition to the monetary settlement, the Cupertino, California-based tech giant has also agreed to injunctive terms, as per the attorney general.
The terms include having a webpage available for consumers — which details how the company manages battery performance issues, making changes in the iPhone’s settings menu, and training its consumer-facing staff on compliance with the injunction.
Why It Mattered: In March, the tech giant settled a $500 million lawsuit that claimed it slowed down older iPhone models in order to coax users to buy new phones or replacement batteries. The minimum sum that Apple would have to pay for that settlement is $310 million.
France’s competition and fraud watchdog also fined Apple $27 million (EUR 25 million) over slowing down older iPhones in February, as per the BBC.
Price Action: Apple shares closed 1.14% lower at $118.03 on Wednesday and fell 0.14% in the after-hours session.