U.S. Probes Apple Over Updates That Slow Older iPhones
U.S. Probes Apple Over Updates That Slow Older iPhones
Apple said in December a software update affected some
phones
Company cut price of replacement batteries after
complaints
By Tom Schoenberg, Matt Robinson,and Mark Gurman January
30, 2018, 10:02 AM PST
The U.S. Department of Justice and the Securities and
Exchange Commission are investigating whether Apple Inc. violated securities
laws concerning its disclosures about a software update that slowed older
iPhone models, according to people familiar with the matter.
The government has requested information from the
company, according to the people, who asked not to be named because the probe
is private. The inquiry is in early stages, they cautioned, and it’s too soon
to conclude any enforcement will follow. Investigators are looking into public
statements made by Apple on the situation, they added.
While the slowdown has frustrated consumers, U.S.
investigators are concerned that the company may have misled investors about
the performance of older phones.
A spokesman for the SEC declined to comment. An Apple
spokeswoman didn’t immediately respond to a request for comment. A Justice
Department spokeswoman declined to comment. Shares of the company fell about 1
percent to $166.36 at 2:07 p.m. in New York trading. Apple’s stock has been
under pressure amid reports of weaker-than-expected iPhone X sales ahead of its
earnings report Thursday.
Several weeks ago, Apple said a software update released
in early 2017 slowed down the performance of older iPhones models as a way to
avoid the phones shutting down at random. When it released the update, the
company hadn’t said the software would slow down the devices. In December,
Apple apologized for not clearly communicating this information and vowed to
release another update to mitigate the concern.
Earlier in January, Apple Chief Executive Officer Tim
Cook told ABC News that when the company put out the software update that
caused the performance issues for older iPhones “we did say what it was, but I
don’t think a lot of people were paying attention. And maybe we should have
been clearer.”
The slowdowns occur when an older iPhone’s battery
reaches a certain, unspecified point of low health and can be fixed if a user
replaces the battery. As part of its public apology, Apple cut the prices of
battery replacements in its stores to $29, a $50 discount.
Apple plans to release an iPhone software update, called
iOS 11.3, in the next few months with new features that let users monitor the
health of their batteries and protect against slowdowns. If consumers turn off
the throttling, older iPhones will be more prone to randomly rebooting, Apple
has said. The system affects iPhone 7 models and older, but not the iPhone 8
and iPhone X, according to the company.
After apologizing to customers in December, Apple was
sued by consumer advocacy groups and individual iPhone users in a global
backlash. Government officials, including U.S. Senator John Thune, a Republican
from South Dakota, have also questioned Apple about the slowdowns.
“Even if Apple’s actions were indeed only intended to
avoid unexpected shutdowns in older phones, the large volume of consumer
criticism leveled against the company in light of its admission suggests that
there should have been better transparency with respect to these practices,”
Thune wrote in a January letter to Cook.
The situation is a self-inflicted black eye on the
Cupertino, California-based company. Apple has been wrestling with some other
software-related issues, including processor vulnerabilities that have affected
other technology companies and a login flaw that allows intruders to access
files on Mac computers without a passcode.
Apple is delaying some key iPhone and Mac software
features planned for release this year to focus on quality improvements,
Bloomberg News reported earlier Tuesday.
This isn’t the first time the Justice Department has
investigated Apple. In 2012, the department filed an antitrust suit against
Apple and book publishers over the pricing of digital book downloads. In 2010
the department settled with the iPhone maker regarding anti-poaching agreements
between the company and other major technology firms such as Alphabet Inc.’s
Google.
In 2016, the Justice Department investigated, and then
dropped a lawsuit against Apple seeking data from an iPhone connected to a mass
shooting in San Bernardino, California.
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