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Apple Agrees to Pay $18 Million to Settle California Class-Action FaceTime Lawsuit

Apple Agrees to Pay $18 Million to Settle California Class-Action FaceTime Lawsuit

Apple will pay $18 million to settle a California class-action lawsuit that alleged that it intentionally broke FaceTime on iOS 6 to force users to upgrade to iOS 7, so it could save money on payment on a data deal with Akamai.

The 2017 lawsuit alleged that Apple intentionally broke FaceTime in a bid to force users of iOS devices to upgrade to iOS 7. The suit claims Apple made the move in order to save money on a data services contract it had with Akamai, rendering older hardware, such as the iPhone 4 and 4S, useless.

When Apple launched FaceTime in 2010, the video chat app used two methods of connecting iPhone users. One method used peer-to-peer technology, creating a direct connection to transmit audio and video. The second method used a “relay method” which made use of third-party servers owned and operated by Akamai to make the connection.

At first, the FaceTime connections routed through Akamai’s accounted for only a small amount of the app’s traffic. However, traffic through Akamai greatly increased following a November 2012 jury verdict that the direct peer-to-peer method used in the lion’s share of FaceTime conversation infringed on patents owned by VirnetX. Apple was ordered to pay a $368 million judgment.

Within a year, Apple was paying $50 million in fees to Akamai, according to testimony from the VirnetX trial.

Apple began routing all of the FaceTime traffic via Akamai’s server, thus greatly increasing the amount the Cupertino firm was paying to the third-party relay team. (Testimony from a 2016 VirnetX retrial set those fees at around $50 million between April 2013 and September 2013.) Those payments became a source of concern for Apple, which then began to explore other methods to connect FaceTime users.

With the release of iOS 7, Apple offered a method of creating a peer-to-peer connection for FaceTime that did not infringe on the VirnetX patents. Unfortunately, according to the lawsuit, some users did not upgrade from iOS 6 and continued to run up charges for Apple at Akamai.

The lawsuit cited emails and sworn testimony from the VirnetX trial in alleging Apple came up with a plan to “break” FaceTime on iOS 6 and earlier versions of the mobile operating system by forcing a vital digital certificate to expire prematurely. Apple allegedly pushed the “FaceTime Break” on April 16, 2014, publicly blaming the resulting issues with FaceTime on a bug.

Law360.com reports Apple will settle the case with an $18 million payout. As is usual in class-action lawsuits, the lion’s share of the payout will go to attorney fees and expenses, and only a small amount of the money going to the class action’s representatives and claimants.