Apple Agrees to $250M Settlement Over AI iPhone Advertising Claims
Roughly 36 million customers could receive $25 to $95 each after alleging Apple marketed iPhone 16 with unavailable Apple Intelligence features.
Apple has agreed to pay $250 million to settle a false advertising lawsuit accusing the company of misleading customers about Apple Intelligence features on iPhone 16 and select iPhone 15 models.
The settlement, which received preliminary court approval in July 2026, covers approximately 36 million customers who purchased eligible devices between June 10, 2024, and March 29, 2025. Individual payouts are expected to range from $25 to $95 per device, with payments arriving in early 2028 at the earliest.
The Core Allegation
The lawsuit, Landsheft v. Apple, alleged that Apple saturated the market with deceptive advertising promoting AI capabilities that were not functional at the time of purchase. Apple heavily marketed the iPhone 16 lineup as optimized for Apple Intelligence, with particular emphasis on an enhanced Siri. However, the core AI features did not ship with the hardware when it launched.
Who Qualifies
Eligible devices include the iPhone 16, 16e, 16 Plus, 16 Pro, 16 Pro Max, iPhone 15 Pro, and iPhone 15 Pro Max purchased within the specified window. The 36 million estimated eligible customers represents a significant portion of Apple's iPhone sales during that period.
A final approval hearing is scheduled for September 29, 2027. Payments would be distributed 60 or more days after that hearing, pushing actual payouts into early 2028.
Apple's Response
"Apple has reached a settlement to resolve claims related to the availability of two additional features," an Apple spokesperson said. "We resolved this matter to stay focused on doing what we do best, delivering the most innovative products and services to our users."
The company did not admit wrongdoing as part of the settlement.
Broader Implications
This case highlights the growing legal risk for tech companies that market AI-powered hardware before the accompanying software is fully deployed. As artificial intelligence becomes a central selling point for consumer devices, the Landsheft settlement sets a precedent for consumer protection regarding the delayed rollout of software features that form a product's value proposition at the time of purchase.
The gap between hardware marketing and software delivery has become increasingly common in the tech industry, but this settlement suggests courts may view such practices as potentially deceptive when features are central to the purchase decision.
Customers seeking to file claims will need to wait until after the final approval hearing before submitting documentation. The settlement administrator will notify eligible customers directly once the claims process opens.