Apple is facing a lawsuit of almost 3 billion. GBP in UK over cloud storage ‘monopoly’ | Apple

Apple faces nearly £3bn lawsuit over allegations that it breached competition law by effectively locking millions of UK consumers into its cloud storage service at “rip-off” prices.

The legal claim is raised by Which?. The consumer group claimed that around 40 million Apple customers in the UK could be entitled to a payout of an average of £70 each if the action is successful.

However, Apple said it rejected the Which? charges and would “vigorously defend” against any legal claims.

A similar lawsuit regarding this issue was launched against Apple in the US March this year, but has not yet been completed.

Which? has instructed an international law firm and said the class action involved all UK consumers who had paid for iCloud services since October 1, 2015.

Built into all Apple devices, iCloud is the American technology company’s cloud storage service that lets people keep photos, files and other data securely online so they’re backed up and accessible when needed.

Users get 5GB of storage for free, but to get more they have to pay, with a range of plans costing from 99p a month to £54.99 a month. Plan prices were increased by up to 29% last year – an increase described by some media as a “shock price increase” affects millions of people.

Which? Legal claims were brought to the Competition Appeal Tribunal – a specialist UK judicial body that decides cases involving competition or economic regulatory issues.

The lawsuit alleged that Apple had breached UK competition law “by giving preferential treatment to its iCloud storage service, and ‘trapping’ customers with Apple devices into using iCloud.”

It said Apple’s iOS mobile operating system “has a monopoly … and it is Apple’s duty not to use that dominance to gain an unfair advantage in related markets, such as the cloud storage market”.

Which? said that Apple had encouraged users to sign up for iCloud “while making it difficult to use alternative providers, including because Apple does not allow customers to store or back up all of their phone’s data with a third-party provider”.

The consumer group also argued that the resulting lack of competition had “led to consumers being overcharged”.

Monthly iCloud subscription fees for UK consumers were increased by between 20% and 29% in June 2023.

Which? said it was seeking compensation for all Apple users affected, and estimated individual consumers “could be owed an average of £70, depending on how long they have been paying for the services over that period”.

The consumer group makes use of the so-called “opt out of collective actions” regime introduced by the Consumer Rights Act 2015, under which an organization can represent consumers where a large number of people have allegedly been harmed. All those entitled are automatically included in the claim, unless they choose to opt out.

Which? has instructed law firm Willkie Farr & Gallagher with the claim funded by Litigation Capital Management, a leading provider of “litigation finance”. But which one? said it called on Apple “to resolve this claim without the need for litigation by offering consumers their money back and opening up iOS to give users a real choice for cloud services”.

Anabel Hoult, chief executive of the consumer group, said: “We believe Apple customers are owed almost £3bn.”

In a statement, Apple said: “Our users are not required to use iCloud, and many rely on a wide variety of third-party alternatives for data storage.

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

The company said nearly 50% of its customers neither need nor pay for an iCloud+ subscription. It added that its pricing was in line with other cloud storage providers, saying its monthly 6TB plan costs £26.99, while Proton’s costs £33.28.