Apple ready to pay $US22.5 million for iPod nano scratches

Stephen Withers
Tuesday, 27 January 2009 01:29

IT Industry - Strategy

Apple has agreed to settle a US class action that alleged the original iPod nano was easily scratched. If approved by the court, the deal will see Apple shell out $US22.5 million in fees, expenses and compensation.

Remember the original iPod nano? Soon after it appeared in September 2005, users started complaining that the front surface - including the screen - scratched very easily and a class action ensued.

That action has now been settled, with Apple agreeing to pay a total of $US22.5 million "to avoid burdensome and costly litigation."

Of that, $US4.5 million is intended to go straight to the lawyers representing the class, along with expenses of up to $US200,000.

Regular members of the class - "All persons and entities who purchased in the United States a new uncoated iPod nano for their own use and not for resale" who experienced scratching of the iPod nano that impaired their use or enjoyment of it - can apply to receive a payment from the settlement.

The notional payment is $US25 for those who did not receive a free slipcase form Apple when they purchased the iPod nano, and $US15 for those that did.

If the fund is undersubscribed, the payments will be scaled up to maximums of $US37.50 and $US22.50, with any surplus going to charity.

On the other hand, if there are so many applications that the fund is oversubscribed, the payments will be correspondingly scaled back.

The eleven class representatives named in the action stand to receive $US2500 in recognition of their time, trouble and expense.

If you're a member of the class, what do you need to do? See page 2.