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Neighbors Growing Together | Feb 24, 2018

U.S. agencies probe Apple over slowing iPhones

Jan 31, 2018

(Reuters) - The U.S. Department of Justice and the Securities and Exchange Commission are investigating whether Apple Inc violated securities laws concerning its disclosures that it slowed older iPhones with flagging batteries, Bloomberg reported on Tuesday.

“We have received questions from some government agencies and we are responding to them,” an Apple spokeswoman told Reuters.

“We have never, and would never, do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades,” she added.

The government has requested information from the company, Bloomberg reported, citing people familiar with the matter.

The chairman of a U.S. Senate committee overseeing business issues asked Apple to answer questions about its disclosures, Reuters reported this month.

Representatives for the Justice Department and SEC declined to comment.

Apple admitted in December that iPhone software could slow down some phones with battery problems. Aging lithium batteries deliver power unevenly, which can cause iPhones to shut down unexpectedly to protect the delicate circuits inside, it said.

Apple posted a public apology over its handling of the issue and lowered the price of iPhone battery replacements from $79 to $29.

Consumers so far have filed some 50 proposed class action lawsuits over Apple’s latest iPhone software update, which they allege caused unexpected shutdowns and hampered the performance of iPhone models of the SE, 6 and 7 lines.

They claim the company tricked consumers into believing their phones were close to the end of their life cycle, forcing them to buy new phones or pay up to $80 for a replacement battery.

Most of the lawsuits have been filed in federal court in San Jose, California, but litigation over the software updates is also pending in other federal courts across the country. Lawyers for the consumers, who began filing their complaints in early January, have asked a federal judicial panel to consolidate the litigation in California.

Consumers are asking judges to issue orders that would prevent future modifications to the iPhone’s operating system which intentionally degrade performance and battery life. They also demand an undisclosed amount in compensation and damages.

Government agencies in countries ranging from Brazil to France and Italy to South Korea are also investigating Apple following complaints.

A French prosecutor and Italy’s antitrust body earlier this month separately launched preliminary investigations of the company over alleged deception and planned obsolescence of its products following a complaint by a consumer organization and use of software updates to slow their mobile phones and push clients into buying new handsets.

A South Korean consumer group has filed a criminal complaint against CEO Tim Cook over slower iPhone devices and accused Apple of destruction of property and fraud.

In Brazil, the state agency responsible for consumer issues notified Apple that it must explain how Brazilian owners of iPhones will be able to buy battery replacements at lower prices.

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