Apple sued for $3.8 billion over iCloud monopoly

British consumer rights group Which? has accused Apple of breaching competition law by locking millions of people into its iCloud service at “rip-off” prices.

The group said it had filed a “landmark” £3 billion ($3.8 billion) legal claim against Apple with the Competition Appeal Tribunal, alleging that the tech giant breached UK competition law by giving preferential treatment to its iCloud storage service.

Which? said approximately 40 million Apple customers in the UK who have used iCloud services over the past nine years could be entitled to a payout if the claim is successful. Individual users could receive an average of £70, depending on how long they paid for the services.

“We believe Apple customers are owed nearly £3 billion as a result of the tech giant forcing its iCloud services on customers and cutting off competition from rival services,” said Anabel Hoult, chief executive at Which?

“By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions,” Hould said.

She added, “Taking this legal action means we can help consumers get the redress that they are owed, deter similar behavior in the future, and create a better, more competitive market.”

Which? said that Apple used its iOS monopoly to “trap” customers with Apple devices into using iCloud and gained an unfair market advantage as a result.

A “key tactic” to achieve this was encouraging users to sign up to iCloud for storage of photos, videos, and other data while simultaneously making it difficult to use alternative providers, the group said.

iOS users have to pay for the service once their data goes over the free 5GB limit, with plans ranging from 99p a month to £54.99 a month. Which? claims Apple is overcharging users for these subscriptions, with price hikes up to 29% across its storage tiers in 2023.

Which? said Apple should pay back consumers and allow users “real choice” for cloud services to resolve the claim without litigation.

Apple rejects claims

Apple said that it “rejects” the claim that its iCloud practices are anti-competitive and will “vigorously defend” itself against any legal action.

"Apple believes in providing our customers with choices. Our users are not required to use iCloud, and many rely on a wide range of third-party alternatives for data storage,” the company said in a statement shared with Cybernews.

“In addition, we work hard to make data transfer as easy as possible – whether it is to iCloud or another service. We reject any suggestion that our iCloud practices are anti-competitive and will vigorously defend against any legal claim otherwise,” it said.

Apple also said that almost half of its customers do not use iCloud and that its pricing is in line with that of other cloud storage providers.

The company faces a similar lawsuit in the US, where a class action was launched in March. The lawsuit accuses Apple of unlawfully monopolizing the cloud storage market on its mobile devices and inflating prices.