Apple to pay $53 million in iPhone, iPod warranty suit

Apple to pay $53 million in iPhone, iPod warranty suit

Summary: Over 150,000 customers will receive compensation after being denied warranty for the iPhone and iPod touch.

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Apple has agreed to pay $53 in order to settle a class-action suit connected to its iPhone and iPod Touch warranties.

According to a filing submitted to the U.S. District Court for the Northern District of California on Tuesday, the tech giant will pay up to $300 for customers who were denied warranty for their products. As reported by Bloomberg, the lawsuit against Apple alleged that the firm used flawed liquid submersion indicators to determine whether or not to grant a customer warranty on their iPhone or iPod Touch.

A Liquid Submersion Indicator (LSI) was installed by Apple on iPhone and iPod Touch products. If the tape made contact with water, the color would change. Apple said that this was proof enough of extensive water damage, although lawyers battling for consumers said that the change in color showed exposure to liquid, but not necessary damage, or that color changes simply showed that there was a problem in the device which allowed such exposure, and that was an issue the customer was potentially trying to have repaired in the first place.

Lawyers say that these indicators could also falsely suggest that one of Apple's mobile devices was abused simply through ordinary use, and the measure change based on nothing more than humidity. If an iPod or iPod Touch has been submerged in water then it is excluded from warranty protection, which means that consumers may have been denied repairs or replacements without reliable evidence of liquid damage and abuse.

Apple denies such claims and says that the liquid damage indicators are trustworthy. However, now the tech giant has agreed to settle in the U.S. for $53 million, customers who had warranty claims dismissed before December 31, 2009 on the basis of the liquid damage policy — and iPod Touches before June 2010 — are eligible for compensation. Over 150,000 customers are able to claim.

The settlement figure requires approval from the court.

Concerns over past warranty procedures are not the only reason Apple has been mentioned in connection to courtrooms. Apple CEO Tim Cook was recently required to appear before a U.S. Senate Subcommittee in order to explain the tech giant's tax system. Although Apple pays roughly $6 billion in tax to U.S. coffers (and expects to pay $7 billion next year), senators argued that this simply means the tech giant is one of America's "largest tax avoiders," based on the vast amounts of cash that are kept off U.S. soil because of high taxation rates.

Topic: Apple

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  • You just had to get the class warfare

    Dig in there, didn't you? See, Apple is greedy, so it's obvious they wanted to avoid paying out warranties or taxes to the selfless, altruistic government and consumer.
    • Class warfare

      If there is any class warfare then it's the big guys against the middle and lower class, and by all accounts they are winning quite handily. Keep your sob sob story about businesses shielding billions of dollars from taxes by keeping them in sham corporations set up in Ireland or some island republic.
  • Change

    Tim Cook's wondering if you've got change for a $100 million dollar note? Because that's all he's got in his wallet at the moment. OTOH, if you'll wait a minute he'll go check around the seats in his Bentley. Might have dropped $53 mil there.
  • Doesn't Anybody Proofread Any More?

    If you believe the opening sentence, Apple agreed to pay $53:
    "Apple has agreed to pay $53 in order to settle a class-action suit connected to its iPhone and iPod Touch warranties."

    Seriously, doesn't zdnet have any proofreaders on staff?
    • As a Former Teacher She No Longer Has a Red Pencil

      More people should sue Apple. Keep their attorneys too busy to file Apple's bogus suits. Live by the Sword, Die by the Sword.
  • Lawyer greed

    the sad thing is the people hurt by this only get $300 while the lawyers get MILLIONS!

    We need laws restricting lawyers to only 10% of what is gotten as long as the 10% doesn't exceed what the people get!
    • Simplistic

      Keep in mind that the plaintiffs most likely never paid their lawyers a dime up front to handle their case and to go up against Apple undoubtedly cost thousands of dollars if not millions. If the lawsuit had failed the lawyers would have been out those costs. Not many law firms could have afforded that degree of risk.

      Do I think it's fair for lawyers to get rich in cases like these? No, but your response is not the answer.
      • Payout

        According to my calculations, total claimant compensation is about $45 million - which means the lawyers got $8 million [roughly 15%].
  • What about the other companies?

    Shouldn't they also go after other companies that use these indicators? This sounds less about Apple (who obviosuly got the hit here) and more about how flawed these indicators truly are?
  • ....

    So how do we collect? I no longer have anything apple but I was denied a repair on an ipod touch few years back. It had a software issue but at the store they said it was ater damaged since they strip was pink which it never was wet maybe humid in a pocket while working out.
    • warranty claim

      @Fletchguy: If you went in and tried to get the gadget fixed and was denied, it should be under warranty. Since there are 150,000 dead gadgets out there how else will they know how many especially since if you have a busted gadget you probably tossed it [hopefully] in a recycle bin instead of holding onto it.
  • I thank Apple

    for rejecting customer claim based on this moisture sensor sticker.
    I made a nice income out of fixing these Apple products.