Apple to pay $18M to settle dispute over FaceTime fiasco

Posted:
in General Discussion edited April 2020
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.

FaceTime


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.

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Comments

  • Reply 1 of 30
    laytechlaytech Posts: 237member
    As with nearly all legal cases its the lawyers that win. A gravy train for them, so they are happy to chase any case. Whether the costs to Apple is an incentive not to follow the same path in future is questionable but in part, the whole legal process of suing for any minor complaint is getting out of control. Everyone pays in the end, the only winners are the lawyers.

    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.


    edited April 2020 jony0jbdragonllama
  • Reply 2 of 30
    WOW! $3 EACH?! Totally worth it. /s

    Remember when people got a free bumper for their iPhone 4 from Apple? Another eye-roller.
    jbdragon
  • Reply 3 of 30
    You sure dropped the ball on that one, Apple. Better make room for a lot more lawyers in your spaceship to fight cases like this in the future.  
    edited April 2020
  • Reply 4 of 30
    coolfactorcoolfactor Posts: 1,833member
    WOW! $3 EACH?! Totally worth it. /s

    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.
    revenantBeatspscooter63
  • Reply 5 of 30
    coolfactorcoolfactor Posts: 1,833member

    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.

    jbdragon
  • Reply 6 of 30
    macxpressmacxpress Posts: 5,175member

    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.
    edited April 2020 chiajbdragon
  • Reply 7 of 30
    apple ][apple ][ Posts: 9,233member
    We've heard of patent trolls before, but it seems as if there are certain law firms that do nothing else besides mostly suing large tech companies, including Apple.

    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
    chia
  • Reply 8 of 30
    crowleycrowley Posts: 8,771member

    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.

    Maybe not, but they still broke functionality and didn’t offer a solution that was palatable. Intentional or not, I think they dropped the ball in this instance.

    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.
    darkvader
  • Reply 9 of 30
    entropysentropys Posts: 3,120member
    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. 

    The point of the exercise.
    pscooter63seanismorrischiatoysandmehcrefugee
  • Reply 10 of 30
    sergiozsergioz Posts: 338member
    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."
    Upgrading your device is was so painful back then, you had to connect your iPhone to your computer ha ha,  I personally remember when it happened. I called my family and told them to update, it was that simple. The fact Apple has to pay for mistakes that much is silly, but I am sure people will disagree. 
  • Reply 11 of 30
    BeatsBeats Posts: 2,532member
    Fu**ing ridiculous.

    I'm suing Nintendo for not allowing my NES cartridge to fit into the Switch slot.
  • Reply 12 of 30
    seanismorrisseanismorris Posts: 1,624member
    Lawyer ambulance chasers win again.  For everyone else, this was a huge waste of time...

    Is anyone going to hunt down proof they owned an iPhone 4 to receive $3?
    toysandme
  • Reply 13 of 30
    crowleycrowley Posts: 8,771member
    Beats said:
    Fu**ing ridiculous.

    I'm suing Nintendo for not allowing my NES cartridge to fit into the Switch slot.
    That was never advertised as a feature of the Switch.
  • Reply 14 of 30
    Beats said:
    Fu**ing ridiculous.

    I'm suing Nintendo for not allowing my NES cartridge to fit into the Switch slot.
    Finding a psych first may save you a fortune
    CloudTalkin
  • Reply 15 of 30
    MplsPMplsP Posts: 3,278member
    crowley said:

    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.

    Maybe not, but they still broke functionality and didn’t offer a solution that was palatable. Intentional or not, I think they dropped the ball in this instance.

    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.
    Why was updating to iOS 7 not palatable?

     coolfactor said:

    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.

    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.
  • Reply 16 of 30
    DAalsethDAalseth Posts: 1,735member
    Over the years I've been eligible to take part in several class action suits for this or that. I have never joined. Oh sometimes I felt the case was justified, but no. The one overriding factor, as is the case with this suit, is the members of the class get nothing. It is all a scam for lawyers to line their pockets. You can't even say it punishes the company or that they had to pay for their behaviour. They just pass the cost along. In the end it's us, the public, that pay for it. Literally the members of the class action suit end up paying for their own award.

    So what's the f-ing point. 
  • Reply 17 of 30

    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, circumstantial evidence implies they did do it on purpose, but not for the reasons you're implying.  The real claim is their motivation was to avoid paying Akamai excessive fees for server based FaceTime.  To accomplish that, it is alleged they intentionally broke FT on iOS6 (server based) to get users to migrate to iOS7.  Remember, they could no longer do peer-to-peer FT without incurring the licensing fees from VirnetX - Apple had just lost a FT patent case to them.  FT use to be 90% peer-to-peer, 10% server based...  economical and safe back up with Akamai.  After the VirnetX judgment, Apple decided it had to go 100% server based FT... still safe, but no so economical.   

    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.
    edited April 2020 gatorguydarkvader
  • Reply 18 of 30
    DAalsethDAalseth Posts: 1,735member

    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, circumstantial evidence implies they did do it on purpose, but not for the reasons you're implying.  The real claim is their motivation was to avoid paying Akamai excessive fees for server based FaceTime.  To accomplish that, it is alleged they intentionally broke FT on iOS6 (server based) to get users to migrate to iOS7.  Remember, they could no longer do peer-to-peer FT without incurring the licensing fees from VirnetX - Apple had just lost a FT patent case to them.  FT use to be 90% peer-to-peer, 10% server based...  economical and safe back up with Akamai.  After the VirnetX judgment, Apple decided it had to go 100% server based FT... still safe, but no so economical.   

    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.
    That's probably the best summation of the case I've read. Yes Apple did it on purpose because the original system wasn't financially viable. The thing was that Apple had given their customers a viable solution, upgrade to iOS7 at no cost. But some weren't satisfied with that. They wanted their cake and eat it too. So they sued, and got essentially nothing. 
    gatorguy
  • Reply 19 of 30
    jbdragonjbdragon Posts: 2,246member
    I can't believe Apple lost this one. The COURT forced Apple to do what it did back then. Apple DID offer a Upgrade path, but people didn't want to upgrade their phones. Why is that Apple's fault? In the end, the only winners in this dumb Class Action is the Lawyers. That's really the only winners in any Class Action and I've been in a few myself over the years and from those, I haven't seen a Penny.
  • Reply 20 of 30
    OMG.
    Tim has to root around in the sofa for spare change again.
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