Apple is facing a £3 billion ($3.75 billion) lawsuit filed by a UK consumer group that accuses the tech giant of violating competition law by allegedly forcing customers to use its iCloud service.
Which?, a UK-based consumer watchdog, claims that Apple has given its iCloud storage service preferential treatment while making it difficult for users to access alternative cloud storage providers. The group alleges that Apple effectively “locked in” users to its iCloud service, leaving them with limited choices and forcing them to store their photos, videos, and other data on Apple’s platform.
“We believe Apple customers are owed nearly £3 billion because the company has forced users to rely on iCloud and stifled competition from rival services,” Which? said in its press release. The lawsuit represents a legal effort to seek compensation for around 40 million Apple users in the UK who have been “locked in” to using iCloud since October 2015. The group contends that Apple’s dominant position in the cloud storage market has allowed the company to overcharge users for iCloud subscriptions.
Since its inception in 2011, Apple’s iCloud service offers users 5GB of free storage. However, this free storage amount has remained unchanged over the years, despite growing data needs. For additional space, users must pay monthly fees starting at 99p ($0.99 in the U.S.). While iPhone users can manually back up their devices by transferring data to a computer, the lack of options to use third-party storage services has raised concerns.
Which? argues that Apple has used its monopoly over iOS to unfairly promote its own cloud storage service and limit competition. “iOS has a monopoly and controls Apple’s operating systems, and it is the company’s responsibility not to leverage that dominance in a way that provides it with an unfair advantage in the cloud storage market. Yet, that is precisely what Apple has done,” the group said in its statement. The lawsuit aims to help consumers obtain compensation for what they believe is unjust treatment, while also seeking to deter similar practices in the future and promote a more competitive marketplace.
In the U.S., Apple faces a similar lawsuit from the Department of Justice (DOJ), which accuses the company of unlawfully dominating the cloud storage market. In response to these accusations, Apple attempted to have the U.S. case dismissed in August, defending the iPhone as “one of the most innovative and consumer-friendly products ever made.”
Apple has rejected the claims brought by Which? and argues that its iCloud service is not mandatory for users. “Our users are not required to use iCloud, and many rely on a wide range of third-party alternatives for data storage,” Apple stated in a response to Forbes regarding the UK lawsuit. The company further stressed that it does not consider its iCloud practices to be anti-competitive, and it plans to vigorously defend itself against any legal challenges.
This lawsuit adds to a growing list of legal issues surrounding Apple’s business practices in both the U.K. and the U.S. While the tech giant has been lauded for its innovations in hardware and software, it now faces increasing scrutiny over its influence in the cloud storage market. The outcome of the legal battle could have significant implications not only for Apple but also for the broader tech industry, as regulators around the world continue to examine the power of dominant tech companies and their effect on competition.
The case represents a broader trend of antitrust and competition concerns in the tech industry, with Apple, along with other major companies, facing increasing legal challenges over market dominance. The outcome of this legal dispute could have wide-reaching implications for how cloud services are offered and regulated, with potential changes to how companies like Apple operate in competitive markets. If successful, the lawsuit could force Apple to modify its business practices, potentially opening up the cloud storage market to more competition and offering consumers more choice in how they store their data.