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Explained | Why Apple is being sued over Apple Intelligence

Explained | Why Apple is being sued over Apple Intelligence

  • 21.03.2025 11:07
  • cnbctv18.com
  • Keywords: AI

Apple is facing a federal lawsuit in the US for allegedly misleading consumers by promoting unready Apple Intelligence features, such as an enhanced Siri, leading to consumer disappointment and financial claims. The company's AI delays have also prompted internal leadership changes, with executives critical of its slow progress in the rapidly evolving AI landscape.

Apple NewsAAPLsentiment_dissatisfiedMSFTsentiment_satisfied

Estimated market influence

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

Facing a lawsuit for false advertising of AI features.

Google

Positivesentiment_satisfied
Analyst rating: N/A

Leading in AI space as mentioned

Microsoft

Microsoft

Positivesentiment_satisfied
Analyst rating: Strong buy

Leading in AI space as mentioned

OpenAI

Positivesentiment_satisfied
Analyst rating: N/A

Leading in AI space as mentioned

Context

Analysis of Apple's Lawsuit Over Apple Intelligence

Overview

  • Lawsuit Filed: A federal lawsuit was filed in the US District Court in San Jose, seeking class-action status and financial compensation for consumers misled by Apple's marketing of Apple Intelligence.

Allegations

  • False Advertising: Plaintiffs claim Apple engaged in false advertising by promoting unready AI features, including an enhanced Siri.
  • Consumer Expectations: The lawsuit alleges that Apple created a "clear and reasonable consumer expectation" that these features would be available at launch.
  • Marketing Materials: An ad featuring Bella Ramsey showcasing Siri's new capabilities was removed from YouTube but other materials remain allegedly misleading.

Impact on Consumers

  • Premise of Lawsuit: Plaintiffs argue that Apple used excitement around AI to encourage expensive upgrades under false pretenses.
  • Delayed Features: Key features, such as enhanced Siri capabilities, are delayed until 2026, with no clear reason provided.

Apple's AI Struggles

  • Announcement Timing: Apple announced its AI initiative in June 2024, already trailing competitors like Google, Microsoft, and OpenAI.
  • Delivered Features: While some AI features (e.g., custom emojis, ChatGPT integration) were shipped, the most anticipated ones remain unavailable.

Leadership Shakeup

  • Executive Changes:
    • Mike Rockwell, VP of Vision Products Group, will now report to Craig Federighi, removing Siri from John Giannandrea’s control.
    • Paul Meade, a hardware engineering leader for the Vision Pro, will take over the Vision Products Group.
  • Internal Concerns: Executives reportedly described Apple's AI situation as "ugly" and "embarrassing."

Competitive Dynamics

  • Market Position: Apple's delay in AI development risks losing ground to competitors like Google and Microsoft.
  • Consumer Trust: The lawsuit could harm consumer trust and impact market share.

Legal Implications

  • Precedent: This case follows similar lawsuits against Google and OpenAI but focuses on false advertising rather than AI technology itself.
  • Potential Outcomes: If successful, the lawsuit could set a legal precedent for future AI-related marketing practices.

Long-Term Effects

  • Brand Reputation: The delay and lawsuit may damage Apple's reputation as a leader in innovation.
  • Market Share Risk: Competitors' faster AI advancements could attract consumers away from Apple.

Regulatory Considerations

  • Regulatory Scrutiny: The case highlights the need for clear guidelines on AI marketing practices, potentially leading to increased regulatory scrutiny across the tech industry.