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SC has a bit part in settling iPhone litigation with Apple

Apple unveils latest gadgets (copy)

Apple CEO Tim Cook discusses the iPhone 6s and iPhone 6s Plus in 2015. Both are among the numerous iPhone models that are tied to two legal settlements totaling $613 million. File/AP

South Carolina will be getting a bite of the Apple from the iPhone maker’s decision to offload some legal baggage.

The latest nibble was served up last week, when it was announced that the technology juggernaut will pay $113 million to settle a multistate investigation stemming from an old business practice that infuriated a large swath of consumers. The Palmetto State's slice will come to about $1.8 million. 

The source of consternation was Apple's onetime practice of slowing down or "throttling" older iPhones in an effort to preserve the batteries and prevent unexpected shutdowns.

The move quickly backfired and mushroomed into a full-blown public-relations crisis for the image-conscious company, namely because it failed to inform users about what it was doing.

Nor did it tell them that they could easily resolve the issue by installing a new $79 battery.

The company came clean by late 2017, after complaints and comments piled up on blogs, social media sites and tech publications. Apple also cut the price for replacement batteries by $50 and offered affected owners a way to disable the throttling feature. CEO Tim Cook even issued an apology.

It didn't suffice. Users of the ubiquitous smartphones sued the company in droves after learning about the surreptitious software update that triggered the slowdown.

South Carolina jumped into the "batterygate" fray, too. It joined a bipartisan Arizona-led coalition of law enforcement officials from nearly three dozen states who launched their own probe. Last week, they secured the nine-figure settlement as well as a legal commitment from Apple to be more transparent about battery health, performance and power management. 

"Apple is a huge and respected company, but its conduct in this case was unacceptable,” S.C. Attorney General Alan Wilson said in a statement Wednesday.

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Without naming names, Arizona AG Mark Brnovich said the dust-up should serve as warning for all of "Big Tech."

"I'm committed to holding these goliath technology companies to account if they conceal the truth from their users," he said in prepared remarks.

Apple has issued no comment about the settlement, its second in the U.S. tied to the throttling controversy. 

In March, the Cupertino, Calif.-based company agreed to pay up to $500 million — a fraction of its $275 billion in annual sales — to end a national class-action lawsuit that involves at least a handful of South Carolina iPhone buyers. Two of them sued Apple in U.S. District Court in Charleston in late 2017.

One of the key allegations in that case and the dozens of others that cropped up across the country was that Apple’s technical tweak was a sneaky ploy to prompt iPhone owners to upgrade to pricier newer models. The two Lowcountry plaintiffs described it in court filings as a “bad faith business practice” that could have potentially hoodwinked millions of consumers.

“These software updates that slow down the older phones coincide with the release of newer iPhone models, causing users to believe their phone is failing and they need to purchase a new device,” according to the lawsuit.

The Charleston litigation was ultimately transferred to and consolidated with the rest of the cases in Silicon Valley, with a court close to Apple's headquarters. 

The company admitted no fault in agreeing to the March settlement, which will include refunds of up to $25 to eligible iPhone users, who had until last month to take the money or opt out.

The minimum total payout is $310 million, and the lawyers are asking for more than $94 million in fees and expenses, according to Reuters news service. 

A fairness hearing is scheduled for Dec. 4 on Zoom, which can be watched on an iPhone or other smart device.

Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott

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