Apple will pay up to $95 to some US iPhone buyers to settle a lawsuit filed last year. Plaintiffs alleged that Apple’s advertising of Apple Intelligence misled consumers. This is another case of tech companies facing legal challenges over AI marketing claims.

Source: BBC Technology

The lawsuit claimed that Apple marketed the iPhone 16 with promises of advanced AI capabilities that were not available at the time of purchase. Apple Intelligence features were rolled out gradually after launch, leaving early buyers without the advertised functionality.

The settlement covers U.S. iPhone buyers who purchased devices between September 2024 and the full rollout of Apple Intelligence. While Apple has not admitted wrongdoing, the payout represents one of the largest tech settlements related to AI feature marketing.

Industry observers say the case sets a precedent for holding tech companies accountable for AI promises made in product launches.

The Case

The lawsuit centered on Apple’s marketing claims regarding its AI features, which plaintiffs argued overstated the actual capabilities delivered to users. The settlement reflects growing regulatory and legal scrutiny of “AI washing” — the practice of exaggerating AI capabilities in product marketing.

Industry Impact

This settlement establishes a precedent: companies that make inflated claims about their AI products may face significant legal and financial consequences. It comes at a time when regulators worldwide are increasingly focused on holding tech companies accountable for their AI-related marketing statements.

Notably, OpenAI CEO Sam Altman has publicly warned about “AI washing” in the industry, calling for more honest descriptions of what AI systems can and cannot do.

What’s Next

• The specific distribution of settlement funds has not been disclosed
• Whether Apple will need to revise its AI marketing language
• How this case might influence other tech companies’ AI promotion strategies

The $250 million figure signals that courts are taking AI misrepresentation claims seriously, potentially chilling overly optimistic AI marketing across the industry.

The U.S. Securities and Exchange Commission (SEC) has ended a lawsuit against Elon Musk that accused him of concealing information about his stock purchases in Twitter (now X). Musk agreed to pay $1.5 million to settle the case.

According to The New York Times, the core of the SEC’s case was whether Musk complied with disclosure obligations required by securities law during his 2022 Twitter share acquisition. Under federal securities law, when an investor’s stake in a publicly traded company exceeds 5%, they must file a Schedule 13D with the SEC within 10 days, disclosing their holdings and intentions.

The SEC had previously alleged that Musk failed to disclose relevant information within the required timeframe after crossing the 5% ownership threshold, preventing the market and other investors from timely understanding his large-scale acquisition. This delayed disclosure may have affected Twitter’s stock price, putting other investors at a disadvantage.

Notably, the SEC has recently shown a softer stance on lawsuits against large corporations, gradually reducing its enforcement actions against major companies. This settlement is seen as part of that trend.

Musk completed his acquisition of Twitter in 2022 for approximately $44 billion, one of the largest mergers in social media history. After the acquisition, he undertook massive restructuring of the platform, including layoffs, rebranding to X, and launching several controversial monetization policies.

The settlement does not mean Musk admitted wrongdoing, but the $1.5 million payment indicates both parties found an acceptable resolution. The SEC typically settles without admitting or denying the allegations.

Source: The New York Times