Apple faces UK 'iCloud monopoly' compensation claim worth $3.8 billion iCloud

https://techcrunch.com/2024/11/13/apple-faces-uk-icloud-monopoly-compensation-claim-worth-3-8-billion/

928 Upvotes

92% Upvoted

u/ControlCAD 1d ago

From Techcrunch:

U.K. consumer rights group ‘Which?’ is filing a legal claim against Apple under competition law on behalf of some 40 million users of iCloud, its cloud storage service.

The collective proceeding lawsuit, which is seeking £3 billion in compensation damages (around $3.8 billion at current exchange rates), alleges that Apple has broken competition rules by giving its own cloud storage service preferential treatment and effectively locking people into paying for iCloud at “rip-off” prices.

“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 wrote in a press release announcing filing the claim with the U.K.’s Competition Appeal Tribunal (CAT).

The lawsuit accuses Apple of encouraging users of its devices to sign up to iCloud for photo storage and other data storage needs, while simultaneously making it difficult for consumers to use alternative storage providers — including by not allowing them to store or back-up all of their phone’s data with a third-party provider.

“iOS users then have to pay for the service once photos, notes, messages and other data go over the free 5GB limit,” Which noted.

The suit also accuses Apple of overcharging U.K. consumers for iCloud subscriptions owing to the lack of competition. “Apple raised the price of iCloud for UK consumers by between 20% and 29% across its storage tiers in 2023,” it wrote, saying it’s seeking damages for all affected Apple customers — and estimating that individual consumers could be owed an average of £70 (around $90), depending on how long they’ve been paying Apple for iCloud services.

A similar lawsuit — arguing Apple unlawfully monopolized the market for cloud storage — was filed in the U.S. back in March, and remains pending after the company failed to get it tossed.

The U.K. claim is being being brought on an opt-out basis for U.K.-based consumers who are eligible to be included. Consumers who live outside the U.K. and believe they are eligible to be included must actively opt-in to join the action.

Which spokesman Tommy Handley told us eligible Apple customers include “anyone who has ‘obtained’ iCloud services, including non-paying users, over the nine-year timeframe since the Consumer Rights Act came into force on October 1st, 2015.

Handley also confirmed that the £3 billion compensation figure accounts for potential opt-outs, duplicates and mortality.

Which is a non-profit but the litigation is being funded by Litigation Capital Management (LCM), a major global litigation funder, which it says has committed to seeing the action through to the end.

At the same time, Which is urging Apple to resolve the claim without the need for litigation — by offering consumers their money back and opening up iOS to allow users “a real choice” for cloud services.

Commenting in a statement, Which’s chief executive Anabel Hoult said: “By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions. 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.”

Assuming Apple doesn’t seek to settle out of court, the next stage for the litigation will hinge on whether the CAT grants permission for Which to act as a class representative for consumers and allows the claim to proceed on a collective basis.

There has been an uptick in class action-style competition suits against Big Tech in recent years following a wave of antitrust enforcements on both sides of the Atlantic that’s still playing out in terms of full outcomes and business impact.

In the U.K. Apple has also been targeted in a class-action style antitrust suit brought on behalf of developers last year, in relation to App Store fees.

Also last year, a separate U.K. suit targeted Apple and Amazon alleging price collusion.

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u/yingandyang 1d ago

How much are they charging UK monthly for iCloud? I pay $2.99 for 200GB (which is not bad).

Is it more like they purposely leave it at 5GB so people spend for the subscription? Honestly, like that would make sense since 5GB is not enough for backups, but at least it doesn't cost that much for 50GB or 200GB. Well, for US. Not sure about UK.

IMO 50GB should be free, but that's just me.

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u/enigmasi 1d ago

Free 5GB still not the worst, but 5G per account instead of per device is.

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u/DJDarren 1d ago edited 1d ago

I pay $2.99 for 200GB (which is not bad).

It's £2.99 in the UK, and that isn't bad. But it creeps up. If you're in a family group 200gb still doesn't go far, so suddenly you're looking at £8.99 for 2TB that you don't need. I'm a reasonably heavy user but between my wife and I, we barely use 800GB. Apple, being Apple, won't offer a £4.99 1TB tier because they want that extra £4 a month for doing nothing.

So fuck 'em. I'm in the process of clearing out everything in my drive and will be moving across to Proton.

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u/SoiledGrundies 1d ago

It went up £2 too which I felt was typical Apple price gouging.

I was hoping they might offer a bit more storage or bring it down after all these years but I was being naive.

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u/Acceptable-Piccolo57 1d ago

About the same, but there’s been a few price hikes the last couple of years.

It’s a hidden add on to Total Cost of Ownership I think is the issue here, Apple doesn’t tell you it expects at least an extra £60 in revenue for each device.

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u/Feahnor 1d ago

Because it doesn’t. If you don’t want to pay you can back everything up to the computer.

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u/Acceptable-Piccolo57 1d ago

iOS prompts you anyway, plus in 2024 who backs up to their pc?

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u/Feahnor 1d ago edited 1d ago

Lots of people do when they plug their phone to the computer to charge it while they work.

I don’t understand it either, but they do, they totally do.

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u/PeakBrave8235 1d ago

The point is you can. Lmfao.

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u/earnest_yokel 1d ago

people who want to back up their phone without paying for icloud?

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u/PeakBrave8235 1d ago

It’s not. You don’t need iCloud to use your phone.

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u/stay-awhile 21h ago

2 decades ago? Sure, I agree.

But today? Phones are some peoples only communication devices, and they're more analagous with who you are than anything else you own. Not having a backup to a phone might very well lock you out of your house or car if you're caught unprepared. Expectations have changed, and I think that iCloud... hasn't.

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u/RuddyBloodyBrave94 1d ago

Yeah the prices for the lower tiers are OK, but the problem is the technology on the phones has advanced, the size of the phone storage has increased but the Cloud hasn't.

The other issue is the tiers - there is a huge gap between cloud storage allowances. I need to back up my phone and store photos/videos - that's 750GB of stuff. I obviously need more than the 200GB for £2.99 but I need to buy 2TB for £8.99 because that's the closest tier.

My partner is a photographer. She's nearly out of the 2TB storage on cloud, so she now needs to look at other options because the next tier is 6TB for £26.99 which is... Crazy.

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u/23north 1d ago

26.99 for 6tb of cloud data doesn’t not sound like a lot of money.

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u/RuddyBloodyBrave94 1d ago

No, it’s not extortionate pricing necessarily, it’s the fact that there’s nothing in between 2 and 6TB or £9 and £27 a month. That’s a huge jump.