Apple's $95 Million Siri Settlement: What Investors Need to Know
Friday, Jan 3, 2025 1:53 pm ET
Apple Inc. (NASDAQ: AAPL) has agreed to pay $95 million to settle a class-action lawsuit alleging that the company's virtual assistant, Siri, eavesdropped on users without their knowledge. The proposed settlement, filed in an Oakland, California, federal court, still needs to be approved by U.S. District Judge Jeffrey White. Here's what investors need to know about the settlement and its potential implications for Apple.

What was the lawsuit about?
The Wood Law Firm filed the complaint against Apple in August 2019, following an article published by The Guardian that claimed Siri's microphone had been surreptitiously turned on to record conversations without users' consent. The lawsuit alleged that Apple shared some of the recorded conversations with advertisers to target consumers more likely to buy their products and services. The allegations contradicted Apple's long-standing commitment to protecting user privacy.
How many people are covered by the settlement?
Tens of millions of U.S. consumers who owned or purchased iPhones and other devices equipped with Siri from September 17, 2014, through the end of last year will be eligible to file claims. Each consumer could receive up to $20 per Siri-enabled device covered by the settlement, with a maximum payout of $300 per person.
How much money will each eligible consumer receive?
The final amount each eligible consumer receives will depend on the number of claims filed and the legal fees and costs deducted from the settlement fund. A claims administrator estimates that only 3% to 5% of eligible consumers will file claims. The lawyers in the case are seeking nearly $30 million in fees and expenses, which could be lowered by Judge White.
Did Apple break any laws?
If the allegations were true, Apple may have violated federal wiretapping laws and other statutes designed to protect people's privacy. However, Apple adamantly denied any wrongdoing and maintained that it would have been cleared of any misconduct had the case gone to trial. Lawyers representing the consumers asserted that Apple's misbehavior was so egregious that the company could have been liable for $1.5 billion in damages if it lost the case.
Why did Apple settle the case?
Apple likely settled the case to avoid the risk of a larger payout if found guilty, as well as to minimize legal costs and potential damage to its reputation. The settlement allows Apple to maintain its commitment to privacy and customer trust, as the company has not acknowledged any wrongdoing.
What does this mean for Apple investors?
The $95 million settlement is a relatively small fraction of Apple's total profits since September 2014, which have exceeded $700 billion. However, the settlement serves as a reminder that Apple must prioritize user privacy and adhere to relevant laws and regulations. Investors should monitor Apple's privacy practices and ensure that the company continues to prioritize user privacy and data protection.
In conclusion, Apple's $95 million settlement of the Siri eavesdropping case highlights the importance of user privacy and the potential consequences of violating privacy laws. Investors should monitor Apple's privacy practices and ensure that the company continues to prioritize user privacy and data protection. While the settlement is a relatively small fraction of Apple's total profits, it serves as a reminder that the company must adhere to relevant laws and regulations to maintain consumer trust and avoid potential legal issues in the future.
Rating: Hold. The settlement is unlikely to have a significant impact on Apple's financial performance, but investors should monitor the company's privacy practices and ensure that it continues to prioritize user privacy and data protection.