Which? Challenges Apple's iCloud Monopoly with £3 Billion Lawsuit in UK Competition Tribunal
2min read In recent legal proceedings, the UK consumer organization Which? has filed a significant lawsuit against Apple, claiming the tech giant violated competition laws by allegedly locking consumers into its iCloud storage service. The lawsuit, valued at £3 billion, involves approximately 40 million UK Apple users who have utilized iCloud over the past nine years. If successful, these consumers might be eligible for compensation. Apple, however, has refuted these allegations, insisting that users have multiple choices for data storage and highlighting the simplicity of data transfer.
Which? has presented the case to the UK's Competition Appeal Tribunal, accusing Apple of giving preferential treatment to its iCloud service and coercing Apple device customers to employ iCloud, thus breaching UK competition law. The organization claims that Apple encourages iOS users to sign up for iCloud storage while complicating the process of choosing competing cloud storage services. Once a user surpasses the 5GB free storage limit, they must then pay for iCloud services, with Which? estimating an average cost of £70 per consumer, depending on the subscription length.
Annabel Holt, CEO of Which?, emphasized, "By initiating this lawsuit, Which? is sending a clear message to large corporations like Apple that deceiving UK consumers does not go unpunished." The legal action is intended to win rightful compensation for consumers and deter future infractions, ultimately fostering a more competitive marketplace.
Further, Which? argues that Apple's pricing for iCloud subscriptions is excessive, warning that prolonged involvement with the service could incur substantial costs concerning price, quality, and choice. They assert that Apple's substantial market presence in smartphones and tablets creates barriers for new cloud service entrants, stifling healthy competition. The lack of competition, they argue, results in consumers overpaying annually.
This legal pursuit requests damages for all affected Apple users who have engaged with iCloud services since October 1, 2015. This date marks the enactment of the UK's Consumer Rights Act, which includes provisions for opt-out collective actions. Collective action allows a group of individuals impacted by similar events to seek legal recourse collectively. Which? clarified that this collective action mechanism enables them to represent a vast number of individuals impaired by anti-competitive conduct.
The organization encourages Apple to address the claim by reimbursing consumers and allowing iOS users genuine cloud service choice without necessitating court action. Which? plans to seek permission from the Competition Appeal Tribunal to proceed with the claim collectively.
An Apple spokesperson responded, "Apple is committed to offering our customers more choice. Our users are not obligated to use iCloud; many rely on a range of third-party alternatives for data storage. We also strive to make data transfers straightforward, whether to iCloud or other services. We firmly deny any claims that our iCloud practices violate competition law and will staunchly defend ourselves against any unlawful claims."
This lawsuit is part of a broader scrutiny against Apple regarding competitive practices. Reportedly, a U.S. class-action lawsuit last year accused Apple of monopolizing cloud storage and overcharging its device users. At the same time, the European Commission's findings in June indicated that Apple's App Store regulations infringed upon the Digital Markets Act by limiting app developers' abilities to direct consumers to alternative offers or content paths.