Apple agrees to $95M settlement in AppleCare class action
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.
Read on AppleInsider
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.
AppleCare Class Action Proposed Settlement by Mikey Campbell on Scribd
Read on AppleInsider
Comments
Refurbished devices should be labelled as such, discounted and sold through the relevant channels.
It's been years since I had an AppleCare policy but at the time there was a lot of 'may and might' in there and on key issues like on site repair.
I also have issues with repairs involving known potentially faulty parts (due to design or manufacturing issues). An age old practice.
I wonder if the butterfly keyboard will ever pop up in court and force Apple to reveal its internal communication on the design and functionality.
Why did you not return it to Apple? Or, at least ask them about it.
That is exactly how I went from an Apple Watch Series 0 to a Series 1. But even then it was probably refurbished. But, that it didn't matter because it looked and worked fine. In fact, it still works fine (but no longer looks new).
For one thing, there is no promise that the replacement will be equivalent to new in "appearance." A reasonable person would read the AppleCare contract to say that they might get a replacement with minor scratches or blemishes.
If you went to a car dealer and asked about a car and they said "it's equivalent to new in performance and reliability" you would be 100% certain that it's not a brand-new car.
The first is the notion of needing to be 'replaced' as opposed to 'repaired'.
If a defect appears under warranty (of any kind) then that defect is assumed to be present at the date of manufacture but simply manifesting itself later on.
If you were sold a device under warranty that needs a replacement, then the time to failure is irrevelant. You deserved a fully functioning device that would stand up to the passing of time under its guaranteed use from the get go (independently of how that warranty was obtained).
If products are well designed and reliable there is no issue for the manufacturer. Remember, the costs are rolled into the original price and the price of the additional warranty coverage.
The manufacturer will not lose out and the customer will have no doubts about what they will get in return.
Of course, the device could also fail four months into the warranty just as easily. It's going to swing both ways.
Another point is that it could lead to devices that are more repairable by design and can therefore be repaired, negating the need for replacement in the first place.
The EU is already working on legislation to improve the situation surrounding repairability in the design process.
As long as Apple tries to leave the door open to some users receiving a new product and others getting a refurbished device, then it will probably run into these kinds of legal issues.
A broken screen, a faulty or depleted battery do not necessitate a replacement. They are repairable items.
You cannot know if the failure on your crown was not down to a latent defect. In the EU at least, for the first six months, such defects are automatically attributed to manufacturing defects.
Apple has been forced to change how it advertises AppleCare in many EU countries because it made it seem as if it was offering something 'extra' when some of it was already covered by the user's statutory rights.
Some parts will be affected by wear and tear but under no circumstances should normal wear and tear lead to a device being replaced. The reason for that would be something covered by my original post. Wear and tear is logical depending on how much use the device has had but replacement would be due to something else.
The solution for Apple is clear. Make devices repairable by design or provide the same treatment to everyone. Refurbished products have their (discounted) channels for good reason.
Your product is guaranteed because of law (statutory rights) and a paid contract in the case of AppleCare, but trying to treat users with the same 'rights' differently will often lead to problems.
It must not be forgotten that AppleCare is a multi billion dollar profitable business that won't be affected by providing new replacement devices.