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Apple has agreed to pay $490 million to settle a class-action lawsuit alleging CEO Tim Cook misled investors about a steep downturn in iPhone’s sales in China that culminated in a jarring revision to the company’s revenue forecast.
The preliminary settlement filed Friday in Oakland, California, federal court stems from a shareholder lawsuit focused on the way Apple relayed information about how iPhone models released in September 2018 were performing in China, one of the company’s biggest markets.
Cook signaled that the new iPhones were off to a good start during an investor conference call in early November 2018, according to the complaint.
That reassurance dissolved into a huge letdown on Jan. 2, 2019 when the Cook issued a warning that Apple’s revenue for the just-completed quarter would fall $9 billion below management’s forecast for the period. What’s more, virtually all of the sales drop was traced to weak demand in China.
It marked the first time Apple had cut its revenue guidance since the iPhone’s release in 2007 and triggered its stock price to plunge 10% in the next day of frenetic trading, wiping out more than $70 billion in shareholder wealth.
Apple vehemently denied Cook deceived investors about the iPhone’s sales in China between early November and early January. The Cupertino, California, company maintained that stance in the settlement documents, but said it decided to make the payment after more than four years of legal wrangling to avoid an “overly burdensome, expensive, and distracting” hassle.
The settlement was reached through a mediator after U.S. District Judge Yvonne Gonzalez Rogers rejected Apple’s request to dismiss the case and set a Sept. 9 trial date.
Gonzalez Rogers is now being asked to approve the settlement in a hearing scheduled for April 30.
Thousands of shareholders who bought Apple stock in late 2018 could be eligible for a piece of the settlement, which will be distributed from of a pool that will be less than $490 million after lawyers involved in the case are paid. The attorneys plan to seek up to one-fourth, or about $122 million, of the settlement.
The $490 million payment represents less than 1% of the $97 billion profit that Apple pocketed during its last fiscal year ended in September. Apple shareholders who have held on to their shares have become wealthier too. Apple’s stock price has more than quadrupled from where it stood after Cook’s China warning, creating an additional $2 trillion in shareholder wealth.
FAQs
Apple has agreed to pay $490m to settle a class-action lawsuit led by the UK's Norfolk county council. The class action alleged chief executive Tim Cook misled investors about a steep downturn in iPhone sales in China that culminated in a jarring revision to the company's revenue forecast.
How much will I get from the Apple settlement? ›
Users who paid Apple out of pocket for repairs or replacements for audio issues for their iPhone 7 or 7 Plus could receive a payment of at least $50 and up to $349. Customers who reported audio issues to the company, but did not pay Apple for out of pocket repairs or replacements, will receive payments of up to $125.
Is paying $490 million to settle claims that Tim Cook misled investors about iPhone sales in China? ›
Apple has agreed to pay $490 million to settle a class-action lawsuit alleging CEO Tim Cook misled investors about a steep downturn in iPhone's sales in China that culminated in a jarring revision to the company's revenue forecast.
Did Apple reach $490 million settlement over CEO Cook's China sales comments? ›
CUPERTINO: Apple agreed to pay $490 million to settle a class-action lawsuit that alleged Chief Executive Tim Cook defrauded shareholders by concealing falling demand for iPhones in China.
What is the Apple 490 million settlement? ›
The proposed agreement requires that Apple pay the class $490 million, along with up to 25% of that sum in attorneys' fees and no more than $3 million in expenses. Individuals authorized to collect from the settlement fund could get at least $10 each.
How do I know if I am part of the Apple settlement? ›
6. How do I know if I am part of the settlement? You are a member of the Settlement Class if you are or were (1) a United States owner of an iPhone 6, 6 Plus, 6s, 6s Plus, 7, 7 Plus, and/or SE device (2) that ran iOS 10.2.
Who qualifies for the Apple settlement? ›
In order to qualify as part of the settlement class, you need to have owned an iPhone 7 or 7 plus between September 2016 and January 2023 and reported audio chip issues to Apple. They'll be noted in Apple's records if you contacted the company for support.
How much did Apple lose in lawsuit? ›
Apple lawsuits' impact on company's shares? Shares of the company slid 4.1%, erasing about $113 billion in market value and taking their year-to-date loss back to 11%. The company- which was once the world's most valuable firm at more than $3 trillion-has underperformed both the Nasdaq 100 and the S&P 500 in 2024.
Why is everyone suing Apple? ›
The DOJ complaint, which was joined by attorneys general and district attorneys from 16 other states, alleges that “Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers.”
Who owns most of Apple now? ›
According to the latest TipRanks data, approximately 51.62% of Apple (AAPL) stock is held by retail investors. Who owns the most shares of Apple (AAPL)? Vanguard owns the most shares of Apple (AAPL).
Apple Inc. is a lawsuit brought against multinational technology corporation Apple Inc. in 2024. The United States Department of Justice (DOJ) alleges that Apple violated antitrust statutes. The lawsuit contrasts the practices of Apple with those of Microsoft in United States v.
How do I get money from my iPhone lawsuit? ›
The Settlement has been approved by the court on March 4, 2024. As the Settlement has been approved, Apple will provide a cash payment to each Class Member who submits an Approved Claim. To receive a cash payment, Class Members must submit a valid Claim Form for each iPhone device by no later than September 2, 2024.
Is there a class action suit against Apple? ›
July 18, 2024 at 2:00 PM PDT
A Settlement has been reached with Apple Inc. (“Apple”) in a class action lawsuit alleging that the iPhone 7 and iPhone 7 Plus experienced certain audio issues allegedly related to the “audio IC” chip.
What is the Apple $92 check? ›
Some people are getting $92 checks from Apple over the iPhone 'batterygate' scandal. People impacted by Apple's 2017 "batterygate" scandal are finally getting a settlement payment. The class action lawsuit alleged Apple intentionally slowed down older iPhones via software updates.
How much is the iPhone 7 lawsuit payout? ›
Apple denies any allegations of wrongdoing, the website said. If you owned an iPhone 7 or iPhone 7 Plus over the last several years, you may be entitled to a portion of a $35 million settlement as part of a class action lawsuit against Apple.
How do I check the status of my Apple claim? ›
Go to reportaproblem.apple.com and sign in with your Apple ID. Choose Check Status of Claims. If you don't see Check Status of Claims, you don't have any pending refund requests.
How do I get Apple compensation? ›
To obtain compensation, users must file a claim.
Members of the class action who did not pay Apple for repairs but complained about the problem will receive an equal payment of up to $125. No proof or repair receipt is required to file a claim, but Apple's repair records will be used to validate claims.
