Apple to Settle $95M Lawsuit Over Privacy Violation Claims

HIGHLIGHTS:

• Apple agreed to settle a $95 million class action lawsuit that accused the company of eavesdropping on conversations and sharing them with advertisers
• Once approved, affected individuals with Apple devices from September 17, 2014, to December 31, 2024
• The proposed amount only represents a fraction of what Apple earned in the latest fiscal year

Technology giant Apple Inc. is set to pay $95 million in cash to settle a proposed class action lawsuit that accused the company of eavesdropping on conversations and sharing the information to advertisers.

The proposed settlement was filed in Oakland, California on Tuesday night. It seeks to end a five-year lawsuit revolving around claims that Apple has been secretly activating its voice assistant Siri to record private conversations through iPhones and other Siri-equipped devices for more than a decade now.

Two plaintiffs cited for instance seeing advertisements on their Apple devices upon mention of Air Jordan sneakers and Olive Garden restaurants without intentionally activating Siri.

Another person said he got ads for a brand-name surgical treatment after discussing it privately with a doctor.

$20 per device

Apple denied any wrongdoing but agreed to settle to free itself from the uncertainties of legal proceedings. The total amount, however, will still require the approval of US District Judge Jeffrey White before any settlement can push through.

Once approved, affected individuals with Apple devices from September 17, 2014, to December 31, 2024—a timeframe when the “Hey Siri” feature was incorporated—would be able to receive $20 per device with a maximum of five devices.

It is expected that only 3 to 5 percent of eligible consumers will file claims.

Lawyers in the case have proposed to schedule the hearing on February 14 in Oakland to review the terms. 

Meanwhile, lawyers for the plaintiffs may seek up to $28.5 million in fees on top of some $1.1 million in expenses from the settlement fund.

Apple and the plaintiffs both declined to comment to Reuters’ request.

Only a fraction of Apple’s profits

According to reports, the $95 million proposed settlement only represents a fraction of Apple’s profits, whose net income in its latest fiscal year was at $93.74 billion, and just a sliver of the $705 billion in profits that it earned has pocketed since September 2014.

It is also just a portion of the roughly $1.5 billion that the plaintiffs’ lawyers had estimated Apple could have paid if the company had been found of violating wiretapping and other privacy laws had the case gone to a trial.

The allegations about a snoopy Siri contradicted Apple’s long-running commitment to protect the privacy of its customers—a promise that Apple Chief Executive Officer Tim Cook has often framed as a fight to preserve a fundamental human right.

Separately, the company is facing another lawsuit filed by six law companies over allegations that it violated the United States antitrust law.