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Apple has agreed to pay out $95 million to settle a class action lawsuit that accuses the company of replacing products covered by AppleCare and AppleCare+ with refurbished devices, an alleged breach of advertised policies.
Dating back to a complaint filed in 2016, the class action lawsuit takes aim at Apple's practice of replacing products covered by its first-party warranties with refurbished equipment. The strategy is claimed to run afoul of false advertising and unfair competition laws.
Apple's documentation notes AppleCare and AppleCare+ services promise to repair an iPhone or iPad that exhibits a hardware defect or accidental damage, or replace it with a device that is "equivalent to new in performance and reliability." Plaintiffs in the case argue that remanufactured or refurbished hardware does not meet Apple's stated criteria.
The tech giant attempted to have the case tossed by arguing, among other points, that plaintiffs were unable to prove that reported issues were caused by used parts and that AppleCare's "equivalent to new" statute does not mean "new." Those efforts failed and a class was certified in 2019.
Lawyers for the class further claimed that Apple illegally profits by charging customers premium prices for AppleCare and AppleCare+, but fails to deliver on that contract.
The parties failed to reach a settlement during three mediations, but came to a resolution after a fourth session held on June 30, 2021, under the guidance of retired Judge Rebecca Westerfield.
Should it be granted by presiding Judge William H. Orrick, the settlement provides for a common fund of $95 million, which is anticipated to be whittled down to between $63.4 million and $68.2 million after administrative costs, incentive awards and attorneys' fees are deducted. That final amount is expected to cover 13% to 25% of estimated damages as assigned by plaintiffs' expert witnesses.
The motion for settlement was filed last Friday and spotted by MacRumors on Monday.
Members of the class are designated as individuals who purchased AppleCare or AppleCare+, either directly or through the iPhone Upgrade Program, on or after July 20, 2012, and received a remanufactured replacement device. The class period cutoff date is set at Sept. 30, 2021.
Potential class members can find more information at www.replacementdevicelawsuit.com.