Apple Settles Family Sharing Subscription Lawsuit — and You May Be Eligible for a Payout

Apple has agreed to pay out $25 million to settle a class-action lawsuit that alleged it misled customers into believing that in-app subscriptions could be shared among family members.

The lawsuit, which was filed in 2019, accused Apple of false advertising when it came to Family Sharing for third-party apps since nearly every app on the App Store included a badge that read: “Supports Family Sharing. With Family Sharing set up, up to six family members can use this app.”

However, from 2015 to 2019 — the time period stipulated in the lawsuit — it was impossible to share in-app subscriptions through Family Sharing. That’s a feature Apple didn’t add until 2020 with iOS 14 and macOS Big Sur.

The earlier “Supports Family Sharing” badge was intended to promote the ability for a purchased app to be shared with up to six family members. However, the complaint claims this “small advertisement” led many customers to incorrectly believe that subscriptions made in third-party apps could be shared with an entire Family Group.

As a result of Apple’s deceptive and misleading practices, Plaintiffs and the Class Members were induced to purchase subscription-based Apps for which Apple receives hefty fees, believing that those Apps could be shared with up to six family members—when in fact they were available only to the single user who set up the subscription. Apple has made millions of dollars in fraudulent sales to individuals who Apple told were receiving up to six copies of an App when they were receiving only one. Apple’s customers did not receive the benefit of their bargain. They were misled.

Of course, it’s a problem that’s been exacerbated as more third-party developers have moved away from a one-time purchase model into an in-app purchase or subscription model. In 2015, most apps on the App Store were purchased up-front; by 2019, it was much more common to get a free download that you later had to unlock, either with a one-time purchase or via a recurring subscription.

As I mentioned in early 2020, just before Apple added this feature, “one other sore point that remains about Family Sharing is that in-app purchases and subscriptions are still not shared between family members. While this is sort of understandable in the case of things like in-game currency, it’s particularly annoying with the number of apps that have moved away from traditional up-front purchases to in-app subscription models, since this prevents them from being shared with others in their family.”

Since in-app purchases and subscriptions were not eligible for Family Sharing before late 2020, this effectively negated Apple’s claims that the whole family could use an app. Some developers provided their own sharing arrangements, but for most folks, these “family” apps were indeed limited to just the one person who made the in-app purchase.

Apple included this advertisement on all or virtually all of the available Apps’ landing pages from the time at which Family Sharing was first initiated through January 30, 2019. However, not all Apps supported Family Sharing during that time period. Specifically, the vast majority of subscription-based Apps, which is a growing percentage of Apple Apps, cannot be shared with designated family members. They are available only to the individual user who downloads the App and sets up a subscription. All or virtually all of these Apps, however, included the statement that they support Family Sharing on their landing pages through January 30, 2019.

This shift in the App Store ecosystem is likely what prompted Apple to later add the ability to share in-app purchases and subscriptions with a Family Sharing group. For its part, Apple has always encouraged family sharing for its own subscription services. Apple Arcade, Apple TV+, Apple News+, Apple Fitness+, and iCloud+ can all be shared with an entire Family Sharing group at no extra charge; only Apple Music requires a higher-tier “Family” plan, and that’s likely more about the music labels requiring a larger slice of the piece.

However, it wasn’t even possible for third-party developers to share subscriptions and purchases through Apple Family Sharing before iOS 14, at least not without resorting to cumbersome workarounds.

The settlement FAQ notes that “plaintiffs contend that Apple misrepresented to users their ability to use Family Sharing to share subscriptions to certain apps with other members of their Family Sharing groups.” However, it also adds that in agreeing to the settlement, “Apple maintains that it did nothing wrong and denies that it made any misleading misrepresentations” and that the settlement is “not an admission of guilt or any wrongdoing” on Apple’s part, nor “of the truth of any of the allegations in the Lawsuit.”

That’s standard boilerplate for most out-of-court settlements such as this, and the $25 million that Apple has agreed to pay out is couch change for a three-trillion-dollar company — and likely quite a bit less than it would pay in court costs if it had to go through the process.

However, the good news is that you may be eligible for a payout, although don’t expect it to cover much more than a modest lunch date. Each class member will receive “up to $30.00” with the actual payment depending on the number of class members who make a claim.

As usual, the lawyers are the real winners here, as they’re expected to walk away with $8.3 million in attorneys’ fees plus another $2 million to cover their litigation expenses. The Settlement Administrator will also get another $2 million for “services administering the settlement.” The plaintiffs who filed the lawsuit will also receive up to $15,000 each “as an incentive award for filing the lawsuit, working with Class Counsel and representing the Class.”

Nevertheless, anyone who purchased an in-app subscription through the App Store between June 21, 2015, and January 30, 2019, and was enrolled in a Family Sharing group and a resident of the United States at that time is considered a class member. So, if you fit that criteria and want to claim a free 30 bucks, you can head over to the settlement page for more information.

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