April 22, 2024

Apple Settles for $490 Million in Lawsuit Over China Statements

Tech giant Apple has agreed to a settlement outside of court, agreeing to pay $490 million to shareholders who accused the company of issuing misleading statements regarding its business in China back in 2018.

The shareholders had criticized Apple executives, particularly CEO Tim Cook, for their statements in November 2018 indicating that the company’s business in China was thriving, despite signs of decline.

The settlement, which was filed on Friday, nearly five years after the initiation of the case, remains subject to approval by a federal judge in Oakland.

During this period, Apple was grappling with a slowdown in the Chinese economy, exacerbated by escalating tensions between China and the United States.

In response to queries during an earnings conference call, Cook specifically mentioned Turkey, India, Brazil, and Russia as regions facing sales pressure, excluding China from this list. Cook was quoted saying, “I wouldn’t put China in that category.”

However, in the subsequent quarter, Apple reported earnings that fell below expectations for the first time under Cook’s leadership since 2011.

The lawsuit was not only aimed at Apple but also targeted top executives, including CEO Tim Cook and CFO Luca Maestri. The legal action was brought forth by shareholders, led by Norfolk County Council based in eastern England.

Overall, the settlement underlines the importance of transparent and accurate communications from companies, especially in the context of global market dynamics and geopolitical tensions.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it