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Apple effectively locked 40 million UK users into iCloud and overcharged them, claims £3bn legal action from consumer group Which?
Apple effectively locked 40 million UK consumers into using its iCloud service and then overcharged them, argues a £3 billion legal claim filed by consumer rights group Which?
The collective proceeding lawsuit, filed with the Competition Appeal Tribunal, says Apple violated competition law by giving its own cloud storage service greater access to the iPhone operating system, iOS.
The effective lock-in then allowed Apple to charge uncompetitive prices, Which? argues.
“iOS has a monopoly and is in control of Apple’s operating systems and it is incumbent on Apple not to use that dominance to gain an unfair advantage in related markets, like the cloud storage market. But that is exactly what has happened,” Which said in a statement.
Cloud competition
Apple allows users to use iCloud for free up to a certain storage limit, after which they are obliged to pay for iCloud+.
The company does not allow users to store or back up all of the handset’s data with third-party providers, something it says is for security purposes.
“iOS users then have to pay for the service once photos, notes, messages and other data go over the free 5GB limit,” Which? said.
The nonprofit said Apple raised the price of iCloud of UK consumers between 20 percent and 29 percent across its storage tiers last year, the group said.
It is seeking £3bn in compensation for users and estimated each user could be owed about £70, depending on how long they have been using iCloud.
Apple said users are not required to use iCloud and that many rely on a “wide range of third-party alternatives” for cloud storage.
It said it works “hard” to make data transfer easy and said iCloud is priced similarly to other cloud services.
“We reject any suggestion that our iCloud practices are anticompetitive and will vigorously defend against any legal claim otherwise,” the company stated.
‘Real choice’
The UK claim is being brought on an opt-out basis for customers who are eligible to be included, which covers anyone who has used iCloud, including non-paying users, in the nine years since the introduction of the Consumer Rights Act on 1 October, 2015.
The litigation is being funded by Litigation Capital Management on behalf of the nonprofit.
Which? has urged Apple to resolve the claim without litigation, by offering customers their money back and opening up iOS to allow users “a real choice” for cloud services.
“By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions,” said Which chief executive Anabel Hoult.
“Taking this legal action means we can help consumers to get the redress that they are owed, deter similar behaviour in the future and create a better, more competitive market.”
A similar case alleging unfair monopolisation of the cloud market with iCloud was brought in the US in March.
The cases are among a number of those targeting large tech companies in recent years, including enforcement actions by regulators as well as consumer class-actions.
Legal actions
Those include an investigation launched by the UK Competition and Markets Authority (CMA) in October of last year into the broader public cloud market.
Developers brought a case against Apple in the UK last year alleging unfair practices with regard to App Store fees.
A separate mass lawsuit brought by around 20 million UK iPhone and iPad users, and worth about £1.5bn, was approved to go ahead last year.
A third UK case over Apple’s 2017 move to slow down older iPhone models to prevent battery issues was launched in 2022.
In November Apple lost a bid to block that case, which seeks £1.6bn in compensation.
Apple began making payments in January under a 2020 settlement for a similar US class-action lawsuit over the slowdown issue, under which it agreed to pay up to $500m (£394m), without admitting wrongdoing.
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