Apple to pay $18M to settle dispute over FaceTime fiasco
Apple this week agreed to settlement terms in a class action lawsuit alleging the company intentionally "broke" FaceTime on older iPhones, with class members due to receive a paltry $3 each for their woes.
Revealed in a court filing on Monday, Apple has agreed to dole out $18 million to claimants who argued the company effectively disabled FaceTime on their iPhone 4 and 4s devices as a cost saving measure in 2014.
The settlement creates an $18 million common fund that covers nearly 30% of the total average damages estimated by Dr. Justine S. Hastings, Ph.D., an expert plaintiffs called on to measure hardware valuation. Lawyers representing the class estimate members will receive a $3 for each claimed device, though that sum could increase if other claimants fail to cash their checks.
The suit's two class representatives, Christina Grace and Ken Potter, stand to gain up to $7,500 each as an incentive award for their participation in the case.
Class counsel is eligible to receive 30% of the common fund, or $5.4 million, in attorneys' fees and $1.1 million in reimbursement for expenses. Lawyers for plaintiffs estimate expenses at $8,398,910.
Apple's agreed settlement arrives more than three years after complainants filed suit against the company for allegedly implementing a cost-saving measure that "broke" FaceTime on older handsets like the iPhone 4 series.
FaceTime launched in 2010 as a first-party videoconferencing technology for iPhone. At the time, Apple used two transfer methods to shuttle audio and video data between participating handsets, the first being a peer-to-peer direct connection and a second "relay method" that relied on third-party servers. Relayed FaceTime calls were routed through third-party services run by Akamai and were therefore more costly than in-house peer-to-peer techniques.
Apple was content with the setup until 2012, when the company's peer-to-peer tech was found to infringe on patents owned by VirentX. The court ruling forced Apple to discontinue use of its direct connectivity protocols and route all FaceTime calls through third-party relay servers. With the service gaining popularity, these rich data connections began to cost the company millions of dollars.
To sidestep server costs, Apple developed a new peer-to-peer protocol that was introduced with iOS 7 in 2013. At the time, a portion of iPhone 4 and 4s owners were unwilling to upgrade from iOS 6 on reports that the newer operating system caused problems with legacy devices.
Plaintiffs in the case allege Apple implemented a "FaceTime Break" in a bid to force users to iOS 7. Apple blamed the compatibility issue on a bug, the suit claimed, citing correspondence between two software engineers.
"Hey, guys. I'm looking at the Akamai contract for next year. I understand we did something in April around iOS 6 to reduce relay utilization," an Apple engineering manager said in an email chain, according to the filing. Another engineer said, "It was a big user of relay bandwidth. We broke iOS 6, and the only way to get FaceTime working again is to upgrade to iOS 7."
Without iOS 7, iPhone 4 and 4s owners were unable to use FaceTime as intended.
Apple fought the case until January, when the company agreed to settle. Monday's filing details terms of the agreement.
Law360 reported on the settlement earlier today.
Though Apple decided to settle in California, the company found more success in a nearly identical case in Florida that was dismissed in April.
Revealed in a court filing on Monday, Apple has agreed to dole out $18 million to claimants who argued the company effectively disabled FaceTime on their iPhone 4 and 4s devices as a cost saving measure in 2014.
The settlement creates an $18 million common fund that covers nearly 30% of the total average damages estimated by Dr. Justine S. Hastings, Ph.D., an expert plaintiffs called on to measure hardware valuation. Lawyers representing the class estimate members will receive a $3 for each claimed device, though that sum could increase if other claimants fail to cash their checks.
The suit's two class representatives, Christina Grace and Ken Potter, stand to gain up to $7,500 each as an incentive award for their participation in the case.
Class counsel is eligible to receive 30% of the common fund, or $5.4 million, in attorneys' fees and $1.1 million in reimbursement for expenses. Lawyers for plaintiffs estimate expenses at $8,398,910.
Apple's agreed settlement arrives more than three years after complainants filed suit against the company for allegedly implementing a cost-saving measure that "broke" FaceTime on older handsets like the iPhone 4 series.
FaceTime launched in 2010 as a first-party videoconferencing technology for iPhone. At the time, Apple used two transfer methods to shuttle audio and video data between participating handsets, the first being a peer-to-peer direct connection and a second "relay method" that relied on third-party servers. Relayed FaceTime calls were routed through third-party services run by Akamai and were therefore more costly than in-house peer-to-peer techniques.
Apple was content with the setup until 2012, when the company's peer-to-peer tech was found to infringe on patents owned by VirentX. The court ruling forced Apple to discontinue use of its direct connectivity protocols and route all FaceTime calls through third-party relay servers. With the service gaining popularity, these rich data connections began to cost the company millions of dollars.
To sidestep server costs, Apple developed a new peer-to-peer protocol that was introduced with iOS 7 in 2013. At the time, a portion of iPhone 4 and 4s owners were unwilling to upgrade from iOS 6 on reports that the newer operating system caused problems with legacy devices.
Plaintiffs in the case allege Apple implemented a "FaceTime Break" in a bid to force users to iOS 7. Apple blamed the compatibility issue on a bug, the suit claimed, citing correspondence between two software engineers.
"Hey, guys. I'm looking at the Akamai contract for next year. I understand we did something in April around iOS 6 to reduce relay utilization," an Apple engineering manager said in an email chain, according to the filing. Another engineer said, "It was a big user of relay bandwidth. We broke iOS 6, and the only way to get FaceTime working again is to upgrade to iOS 7."
Without iOS 7, iPhone 4 and 4s owners were unable to use FaceTime as intended.
Apple fought the case until January, when the company agreed to settle. Monday's filing details terms of the agreement.
Law360 reported on the settlement earlier today.
Though Apple decided to settle in California, the company found more success in a nearly identical case in Florida that was dismissed in April.
FaceTime Lawsuit Settlement... by Mikey Campbell on Scribd
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Comments
We have become a society of claimants chasing easy money at the cost to everyone. What is lost in the noise of all this are the legitimate cases where claims should be made with legitimate reason to sue. Reversing this trend or undoing this litigious society will be very hard.
Remember when people got a free bumper for their iPhone 4 from Apple? Another eye-roller.
Totally not the same thing. The bumper was a solution to the antenna problem (that some people experienced), not compensation for any inconvenience. The antenna on the iPhone 4 was external, so direct skin contact (which is conductive!) affected its performance. The bumper helped to avoid that problem.
Sad that people feel compelled to spin this as "Apple did this on purpose!". They never intentionally broke something to force upgrades. That wasn't their motivation. They didn't sit around a table brainstorming "hey, how can we force our customers to upgrade to iOS 7?".... "hmm, what if we disabled FaceTime on iOS 6?".... "oh! Good idea!".
That's nonsense, yet that's exactly how these silly lawsuits are portrayed.
Well Apple has hundreds of billions in the bank and unfortunately, some think they deserve a piece of it at any cost. There's also those that think everyone is out to screw them over and that technology should last forever at any cost.
I don't know if they're still involved, but the law firm that was initially involved in this case seems to have made a nice business out of suing Apple.
They've already scored more than a billion dollars in verdicts against Apple.
Five years later, it’s safe to say Caldwell Cassady & Curry is giving the bank’s other big clients a run for their money. In the first few years of the Dallas firm’s existence, the lawyers have scored more than $1 billion in patent infringement verdicts against Apple alone.
https://caldwellcc.com/wp-content/uploads/2015/05/04-15-18_Texas_Lawbook_Profile.pdf
The outcome of $3 each and the lawyers being the real winners is a bit rubbish, but that’s a problem with the system, and doesn’t detract from the merits of the case.
I'm suing Nintendo for not allowing my NES cartridge to fit into the Switch slot.
Is anyone going to hunt down proof they owned an iPhone 4 to receive $3?
coolfactor said: Actually, Apple did do it on purpose; they changed how FaceTime worked on the backend so it could not be used anymore without updating to iOS 7. That wasn’t the issue here, though. The issue was that people felt upgrading to iOS 7 wasn’t acceptable.
So what's the f-ing point.
The primary circumstantial evidence was internal emails that implied the "FaceTime Break" was intentional. In other words, the implication was upgrading to iOS7 was means to accomplish the end result of reducing payments to Akamai. This situation is ironic since the iOS7 peer-to-peer solution to get around VirnetX only resulted in a secondary lawsuit loss to VirnetX at a later date.
Tim has to root around in the sofa for spare change again.