Following her feedback, the parties amended the settlement to exclude the “relate to” language regarding released claims. This revised proposal was submitted in June, and Judge Gonzalez Rogers indicated on Tuesday that she would approve it.
Apple Slowed iPhone Derivative Deal : Background of the Lawsuit
The lawsuit, initiated in August 2019, accused Apple’s officers and directors of breaching fiduciary duties, wasting corporate assets, and unjust enrichment by concealing the company’s strategy to make older iPhones appear less functional, thereby pressuring users to upgrade prematurely.
After independent investigations revealed the truth, Apple admitted to “planned obsolescence” in December 2017. This acknowledgment sparked significant consumer backlash and a wave of investor litigation, including the current derivative suit, which was consolidated under Judge Gonzalez Rogers in 2020.
Corporate Governance Changes and Future Oversight
As part of the settlement, Apple has agreed to several corporate governance changes. These include requiring its general counsel to report any significant compliance issues to the board’s audit and finance committee, adding the chief compliance officer to the board’s “risk oversight” committee, and ensuring that any risks discussed are communicated to the audit and finance committee.
