Are UK Apple Customers Being Overcharged For iCloud? £3 Billion Lawsuit Says 'Yes'

Consumer advocacy group Which? has launched a £3 billion lawsuit against Apple, alleging that the tech giant violated UK competition law by "forcing its iCloud services on customers." According to Which?, Apple has made it difficult for iPhone and iPad users to choose alternative data storage options, effectively pushing them towards iCloud while suppressing competition. The group claims that Apple's tactics have led to customers being overcharged for iCloud storage, limiting user choice and restricting the market for rival services.

Which? Claims Apple Has Breached Competition Law

Which?, known for its role in championing consumer rights, accuses Apple of leveraging its position in the market to "lock" customers into using iCloud. The consumer group argues that iOS users have no easy way to store all their data with third-party providers and are often pushed to pay for additional iCloud storage once they surpass the free 5GB limit. According to Which?, Apple's behaviour has limited competition by favouring its own products over viable alternatives.

The lawsuit seeks compensation for all affected Apple customers who have used iCloud services since October 1, 2015. It is estimated that around 40 million individuals may be eligible for damages, with Which? estimating an average payout of £70 per person based on their subscription history. Which? has also urged Apple to settle the claim out of court, advocating for refunds for consumers and more freedom for users to select alternative cloud storage providers.

Apple Defends Its iCloud Practices

Apple has denied allegations of anti-competitive practices, maintaining that iCloud is an optional service. According to Apple, approximately half of its customers do not use or pay for an iCloud+ subscription, which the company argues supports its claim that users have a choice. In a statement, Apple said, "We believe 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."

Apple also defended its pricing, describing it as competitive with other cloud storage providers. The company emphasised that it works to make data transfers simple, whether to iCloud or an alternative service. "We reject any suggestion that our iCloud practices are anti-competitive and will vigorously defend against any legal claim otherwise," Apple stated, responding to the allegations.

Legal Action Could Prompt Changes to iOS Ecosystem

According to Professor Pinar Akman, a competition law expert at the University of Leeds, Which?'s legal action could compel Apple to reconsider its data storage policies if the court rules in the consumer group's favour. Akman explained that, should Apple be found to have breached competition law, the court could require changes to iOS to support alternative data storage options. "Collective actions, where a class representative seeks damages on behalf of very large numbers of consumers, have become commonplace in the UK over the last few years," said Akman, highlighting the legal trend towards holding large corporations accountable for anti-competitive practices.

Akman also noted that the case centres on Apple's possible abuse of a dominant position. If Which? can demonstrate that Apple's practices led to excessive charges for UK consumers, then the Competition Appeal Tribunal could award compensation. Akman added, "The remedies can be wide-ranging and would normally require the company in question to terminate any violation which the court has found."

The potential success of Which?'s lawsuit could open the door for more flexibility in Apple's iOS system, allowing customers the freedom to choose from a wider range of cloud storage providers. Which? believes that Apple's dominance in the mobile device market has allowed it to restrict customer options, leading to higher prices and reduced competition. Anabel Hoult, CEO of Which?, explained, "By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions."