Apple Accused Of Cloud Monopoly Faces £3 Billion Lawsuit

The case claimed that Apple had violated UK competition law by providing preferential treatment to its iCloud storage service

Apple is facing a lawsuit for around £3 billion due to allegations that it breached competition law by bringing millions of UK users into its cloud storage service at a rip-off price.

The legal claim is brought by Which? which claimed that about 40 million Apple users in the UK must be eligible for compensation of £70 each if the lawsuit is successful.

However, Apple declined Which? charges and stated that it would vigorously defend itself against any legal claim.

A similar lawsuit was filed relating to this issue against Apple in the US in March of this year and is still pending.

All UK customers who have paid for iCloud services from October 1, 2015, were involved in the class action, according to the instructions given to the international law firm by Which?.

The cloud storage service offered by the US tech giant iCloud enables users to save images, documents, and other data securely so they can backed up whenever needed.

Users get 5GB free storage, but to increase it, they have to pay extra with a range of plans costing from 99p to £54.99 per month. Plan prices increased to 29% last year, impacting millions of people.

The Which? lawsuit was filed in the competition appeal court, a specialized UK court that decides situations concerning competition or economic regulations.

The case claimed that Apple had violated UK competition law by providing preferential treatment to its iCloud storage service and enticing its customers with Apple devices to use iCloud.

It stated that Apple‘s iOS mobile operating system has a monopoly and should have avoided abusing its power to gain an unfair advantage in markets like cloud storage.

Which? said that Apple has been pressuring consumers to sign up for its iCloud by making it challenging for the users to use alternative providers, like preventing users from backing up or storing their phone data on a third-party provider.

The consumer group also claimed that Apple overcharged its customers due to a lack of competition.

In June 2023, monthly iCloud subscriptions for UK users increased by 20% to 29%.

Which? was seeking damages for all the affected Apple users. Depending on how long they have been using the services, each customer is entitled to an average of £70.

The consumer group follows the opt-out collective actions system established by the Consumer Rights Act 2015. When a significant number of consumers are allegedly affected, the act allows a consumer group to represent consumers. All affected consumers are automatically included under this act unless they choose to opt-out.

Which? has instructed the law firm Willkie Farr & Gallagher and with the claim funded by Litigation Capital Management, a top dispute financing provider. However, Which? urged Apple to resolve this dispute without going to court by giving customers their money back and opening up iOS by giving users a genuine choice for cloud services.

The chief executive of the consumer group, Anabel Hoult, stated that they believe customers are owed almost £3 billion.

However, Apple defended itself by stating that its users are not required to use iCloud, but many rely on a wide range of third-party alternatives or data storage.

Apple ensures that data transfer is simple and easy, whether it is through iCloud or any third-party provider. They also vigorously defended against any legal accusation that iCloud policies are anti-competitive.

Apple stated that almost half of its users do not need or pay for an iCloud+ subscription. It further affirmed that it had set competitive prices as other cloud storage companies. For example, its monthly 6T plan costs £26.99, whereas Proton’s costs £33.28.