In 2019, Apple was hit with a class action lawsuit, alleging that the company had breached its contract with its users by storing some iCloud data on third-party servers. California (UCL) and False Advertising Act (FAL), will Apple really pay Apple the settlement? And why? And who has the right to it? How much does each person have?
As with most class action lawsuits, this lawsuit took some time to work its way through the courts. In October of the same year, Apple filed an objection, and the court agreed in part in March 2020; The court ruled that the breach of contract lawsuit could continue, and rejected the Unfair Competition Law and the False Advertising Law.
Prosecutors amended those claims in April of the following year, and after Apple moved again to dismiss those claims, the court dismissed them in November.
However, the case for breach of contract remained in place, and it appears that Apple has finally agreed to an out-of-court settlement of $14.8 million for "breach of contract in connection with the iCloud service it provides to its users."
Apple denies the lawsuit, so why did you agree to the settlement?
Apple has denied any wrongdoing that leads it to accept the settlement, maintains that it has done nothing wrong and denies that it violated iCloud terms and conditions with any user. She emphasized several defenses against the allegations in this case.
She said that the proposed settlement of this lawsuit is not an admission of guilt or admission of any wrongdoing of any kind on her part, nor is it an acknowledgment of the truthfulness of any of the allegations in the lawsuit.
In the settlement agreement, Apple adds that it "continues to vigorously deny all material allegations in the lawsuit," but nonetheless concludes that it is in the company's best interest to settle it to avoid legal expenses, case complexities, and "distractions from continued litigation."
Who is included in the settlement?
Per the published settlement terms, users who "paid for iCloud at any time between September 16, 2015 and January 31, 2016" and have a US mail address associated with their iCloud account will automatically be eligible for a payout.
And if you're still subscribed to iCloud when that payout arrives, it should be automatically added to your Apple account.
Those who no longer subscribe to paid iCloud plans will receive a payment by check to the last mail address associated with their iCloud account. The same procedure applies to existing iCloud subscribers who no longer have a US mail address associated with their paid plan.
How many will be affected?
Payments will be prorated to the net settlement amount based on the total payments made by each member of your iCloud subscriber tier.
This means that the $14.8 million that Apple pays, minus all administrative and legal fees, will be distributed equally based on how much it spent during the four or five month period in question.
So the most that a user can get back is the full four or five months of iCloud service. This means that the maximum users can get back can be up to $45.
And since everyone in the US who paid for iCloud during this period will participate in the settlement, you will likely get a much smaller amount. Eddy Q revealed that Apple had 11 million subscribers at the time, that is, in early 2016.
Even if only 5% of all iCloud users were paying for the service, a number that seems low considering the 5GB of free storage isn't even enough to back up most iPhones, that would still work out to just over 39 Million paying customers. And $14.8 million doesn't seem like much when it's divided by 39 million people.
As with most class action lawsuits, lawyers have the lion's share. The attorney's fees will not be determined until after the final approval session on August 4th. However, the agreement has already set aside up to $2.4 million for settlors.