Bloomberg is reporting that Apple will pay US$53 million to settle a class-action lawsuit that alleges the company unfairly denied warranty coverage to iPhone and iPod owners because of faulty water damage indicator tapes in the devices.
Like many companies, Apple uses water damage indicator tape inside its devices so it can tell if the device has been submerged in water. The tape, made by 3M, changes color when it comes into contact with liquid. However, the plaintiffs in the case successfully argued that the tape Apple used could change color while exposed to humidity or moisture in the air.
Though Apple has denied any wrongdoing and the court has yet to approve the settlement offer, users of affected units can expect up to a US$300 compensation per device. It's unknown if that compensation will come in the form of a check or a credit for a new device. Affected units are any iPod touches with warranties that were denied due to water coverage before June 2010, and any iPhones with denied warranties due to water damage before Dec. 31, 2009.