The so-called ‘Batterygate’ iPhone throttling case has been given the go-ahead by UK’s Competition Appeal Tribunal which could mean a near $1 billion (£853 million) damages payout to affected Apple customers.
What Is ‘Batterygate’?
Batterygate refers to a 2017 software update to iPhones by Apple that customers reported had slowed older iPhones down. It was alleged by some at the time that this had been an intentional move designed to motivate customers to buy a new battery or a new iPhone.
The older models of iPhone (released between 2014 and 2016) affected by slowing following the update were the iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus, iPhone 7, and iPhone SE.
Claims Gained Momentum
Claims by customers that their iPhones have been slowed by the update were supported by comparative performance tests of different models of the iPhone 6S on Reddit and Technology website Geekbench.
As customers’ concerns mounted and received more press, Apple publicly admitted that its software update was responsible for the slowing, Apple apologised to customers in January 2018, and in 2020 agreed to pay $113m (£85m) in the hope of putting an end to the ‘Batterygate’ scandal.
Also, in France in early 2020, Apple was fined $27 million by the country’s consumer watchdog for throttling the battery on older iPhones and it’s been reported that Apple had many (66) smaller batterygate lawsuits against it in the US, settling for $500 million in 2020, and agreeing (in a separate case) to pay out $113 million to 34 US States for the throttling of iPhone 6 and 7 devices.
Power Management Tool
Apple’s explanation of the iPhone update was that it was a power management tool to help combat performance issues and to help prolong the life of customer devices by managing their ageing lithium-ion batteries and preventing the inconvenience of a sudden and unexpected shutdown. Apple said (in 2018) that it would never intentionally “degrade the user experience to drive customer upgrades.”
Justin Gutmann’s Lawsuit
However, in 2022, consumer champion Justin Gutmann filed a lawsuit against Apple over the matter. In the lawsuit Mr Gutman claimed that hardware used by Apple in seven affected iPhone models couldn’t cope with the demands of the device’s processor and operating system. Mr Gutmann argued that Apple introduced the software tool in a concealed way to hide the fact that iPhone batteries may not have been able to run the latest iOS software at the time.
Mr Gutmann also alleged that the “power management tool” pushed as part of the iPOS update had slowed the performance of their phones leading to many owners having to pay for replacement batteries or buy new phones. Mr Gutmann alleged that using the update to force people to pay for replacement batteries or entirely new phones amounted to Apple exploiting its market dominance in the UK. It was alleged that Apple’s apology and offer of a payout were essentially a plan to save Apple the cost of having to recall products and provide replacement batteries, by making users seek to buy their own new batteries or new iPhones after noticing a slowdown (following the update).
Mr Gutmann, therefore, decided to launch his own lawsuit, seeking around £768m (now £850m) in damages for up to 25 million UK iPhone users.
Case To Go Ahead
Now, for the latest development in ‘Batterygate’ Mr Gutmann’s near $1 billion lawsuit on behalf of the affected owners has been cleared to proceed to court by UK’s Competition Appeal Tribunal.
With around 25 million customers affected, if the case doesn’t go Apple’s way, all the affected owners will be entitled to a compensation payout from Apple for each model of iPhone that they owned that was subject to slowing caused by the update.
In its summary, The Competition Appeal tribunal highlights how the collective proceedings order (CPO): “seeks to combine, on an opt-out basis, the claims of consumers and business entities who have purchased, or were gifted, certain Apple iPhone models in particular iPhone 6, 6 Plus, 6s, 6s Plus, SE, 7, 7 Plus (“Affected iPhones”)”. It also highlights how “Apple’s application to strike out the claim was dismissed” (Apple tried to have the case thrown out), and that the Tribunal has now “decided that the requirements of a CPO are met in this case.”
The Tribunal did, however, also note that “aspects of the claim lack clarity” which it says, “impacts both the questions of the existence of abuse and the manner in which loss to the class is to be assessed.” In other words, there’s likely to be some room for Apple’s lawyers (backed by the huge resources of the company) to mount a persuasive argument against the allegations made in the lawsuit.
Following the news that the lawsuit has been given permission in the UK, Mr Guttmann has been quoted as saying: “I’m heartened that the Competition Appeal Tribunal has given the nod for our groundbreaking claim to proceed to a full trial. This paves the way for millions of consumers, who were left paying for battery replacements or new phone models, to receive the compensation they deserve.”
What Does This Mean For Your Business?
Batterygate has been a blot on Apple’s reputation that has been hanging around for years now, resulting in it having to settle many claims in the US already and pay a £27 million fine in France. Although Apple is a multi-trillion-dollar company with considerable financial and legal resources, it has been (and could still be) quite an expensive episode for the company, plus the fact that it’s paid out (settled) with many in the US could point to the fact that it may lose or may agree a sizeable settlement in the UK.
The UK lawsuit which has just been given the go-ahead, and which rests on whether Apple essentially exploited its market dominance in the UK could, therefore, potentially see 25 million UK iPhone users get compensation without having to take any individual action (it’s an opt-out claim on their behalf) and see Apple possibly pay as much as $1.6 billion ($1 billion / £853 is just the midpoint figure).
With Apple (a company that makes 80 per cent of its revenue from new devices) just launching its new iPhone 15 (which had an overheating issue that required an update), it may be very keen for batterygate to disappear as soon as possible which the settling of this lawsuit may be another major step in achieving. What with the iPhone 15 overheating issue, iPhone 12 sales recently being banned in France over radiation fears, and the newly launched iOS 17 needing quick fix for three critical vulnerabilities, Apple may feel that it needs a break from very public bad news stories.
All that said, however, at the heart of this case are millions of owners whose expensive vital communication devices were suddenly slowed, causing them considerable inconvenience, perhaps causing stress and costing them money to find replacement batteries or even going to expense of buying a new phone. It wouldn’t be the first time that a giant, dominant tech company has been accused of exploiting its market dominance at the expense of customers, and it now remains to be seen whether affected UK customers in this case are finally entitled to compensation and whether Apple will receive another blow to its reputation in the final rounds of batterygate.