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

Apple accepted the settlement terms this week in a class action lawsuit alleging that the company had intentionally “broken” FaceTime on older iPhones, with class members expected to receive a paltry $ 3 each for their woes.


Revealed in a court case on Monday, Apple agreed to pay $ 18 million to plaintiffs who claimed that the company had effectively disabled FaceTime on their iPhone 4 and 4 devices as a cost-saving measure in 2014.

The settlement creates an $ 18 million pooled fund that covers almost 30% of the total average damage estimated by Dr. Justine S. Hastings, Ph.D., an expert complainant called upon to measure the valuation of the equipment. Lawyers representing class members will receive $ 3 for each device claimed, although this amount may increase if other claimants fail to cash their checks.

The two costume class representatives, Christina Grace and Ken Potter, will earn up to $ 7,500 each for their participation in the affair.

Group lawyers are eligible to receive 30% of the common fund, or $ 5.4 million, in legal fees and $ 1.1 million in reimbursement of expenses. Counsel for the complainants estimate the expenses at $ 8,398,910.

Apple’s agreed settlement comes more than three years after the plaintiffs sued the company for allegedly implementing a cost-saving measure that “broke” FaceTime on older handsets like the iPhone 4 series.

FaceTime was launched in 2010 as a first-party video conferencing technology for the iPhone. At the time, Apple used two transfer methods to transfer audio and video between participating handsets, the first being a direct peer-to-peer connection and a second “relay method” based on third-party servers. Relayed FaceTime calls were routed through third-party services managed by Akamai and were therefore more expensive than internal peer-to-peer techniques.

Apple was content with the configuration until 2012, when the company’s peer-to-peer technology was found to be contrary to the patents owned by VirentX. The court ruling forced Apple to stop using its direct connectivity protocols and route all FaceTime calls through third-party relay servers. With the growing popularity of the service, these rich data connections began to cost the business millions of dollars.

To get around server costs, Apple developed a new peer-to-peer protocol that was introduced with iOS 7 in 2013. At the time, part of the owners of iPhone 4 and 4s were unwilling to put upgraded from iOS 6 on reports that the new operating system caused problems with legacy devices.

Complainants in the case allege that Apple implemented a “FaceTime Break” in order to force users to iOS 7. Apple has attributed the compatibility issue to a bug, the lawsuit said, citing correspondence between two software engineers.

“Hey guys, I’m looking at the Akamai contract for next year. I understand that we did something in April around iOS 6 to reduce the use of relays,” said an Apple engineering manager. in a message chain, depending on the file. Another engineer said, “He was a big relay bandwidth user. We broke iOS 6, and the only way to get FaceTime to work again is to upgrade to iOS 7.”

Without iOS 7, iPhone 4 and 4s owners couldn’t use FaceTime as planned.

Apple fought the case until January, when the company agreed to settle. Monday’s filing details the terms of the agreement.

Law360 reported on the settlement earlier today.

Although Apple decided to locate in California, the company was more successful in an almost identical Florida case that was closed in April.

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