Apple to pay iPhone buyers $250 million after lawsuit claims it hyped non-existent AI in ‘bait and switch’ – The Mercury News

https://www.mercurynews.com/2026/05/06/apple-pay-iphone-buyers-250-million-lawsuit-ai/

Publish Date: 2026-05-06 18:15:00

Source Domain: www.mercurynews.com

Apple has agreed to pay $250 million to people who bought certain newer-model iPhones, to settle a class-action lawsuit claiming it hyped artificial intelligence features that didn’t exist.

At issue in the case were Apple’s statements and ads heavily promoting “Apple Intelligence,” a set of purportedly advanced generative AI features centered around its chatbot Siri. Starting in mid-2024, Apple claimed the enhanced Siri “would intelligently interact with users’ personal data across device applications and apply that data to solve everyday problems,” and act as a “fully fledged AI assistant,” the lawsuit in San Jose U.S. District Court said.

However, the lawsuit alleged, it wasn’t until March 2025 after millions of customers bought iPhones, “expecting the heralded features,” that Apple admitted enhanced Siri didn’t exist at the time the Cupertino tech giant began widely hyping it, and would not be available until sometime in 2026.

Apple “misled” customers into paying a premium price of $599 to more than $1,200 for the iPhone 16, iPhone 15 Pro, and 15 Pro Max, the settlement agreement filed Tuesday alleged.

The company’s “bait and switch” broke “multiple false advertising, unfair competition, and consumer protection laws,” the lawsuit, filed in March 2025, claimed.

In agreeing to settle the case, Apple denied wrongdoing, said Burlingame law firm Cotchett, Pitre & McCarthy, which represented iPhone buyers in the lawsuit.

In a statement Tuesday, Apple said it “resolved this matter to stay focused on doing what we do best, delivering the most innovative products and services to our users.”

U.S. residents who bought particular iPhones in the U.S. from June 10, 2024 to March 29, 2025 may be eligible to receive $25 to $95 per device, the dollar amount depending largely on how many claims are made.

About 37 million iPhones are subject the settlement.

Here are the models: