Apple faces £3 billion lawsuit over iCloud fees

Alleged to have overcharged millions of UK customers

Apple is facing a potential £3 billion lawsuit, brought by consumer group Which?, alleging that the tech giant abused its market dominance to overcharge millions of UK customers for iCloud storage.

The lawsuit, filed with the Competition Appeal Tribunal, claims Apple has "trapped" customers into using its cloud storage service by making it difficult to switch to alternatives.

Which? argues that Apple's iOS operating system, which powers iPhones and iPads, has a monopoly, allowing the company to dictate terms for cloud storage services.

By making it difficult for users to switch to third-party cloud solutions and limiting users to only 5GB of free storage, Which? contends that Apple effectively locked customers into iCloud subscriptions.

Users who require additional storage are charged monthly fees starting at 99p ($0.99 in the US).

Which? states that many users may not have fully considered the cost implications of iCloud storage when they first set up their devices. Once data is stored on iCloud, it can be difficult to transfer to another service.

The consumer group also highlights Apple's decision to increase iCloud subscription fees by up to 29% last year. It argues that these practices have led to limited consumer choice and higher prices.

It estimates that around 40 million UK consumers could be eligible for compensation, averaging £70 per person. The claim covers individuals who have used iCloud services since 1st October 2015.

Which? is calling for increased competition in the cloud storage market, arguing it would drive down prices and improve consumer options.

"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," Which? said.

"But that is exactly what has happened. 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."

Apple has denied the allegations, stating that its iCloud pricing is comparable to other cloud storage providers and that customers are not obligated to use its service.

The company says it allows data transfer to other services and that many users opt for free or low-tier storage plans.

"Our users are not required to use iCloud, and many rely on a wide range of third-party alternatives for data storage," Apple said.

The lawsuit in the UK follows similar case in the United States, in which the US Department of Justice accused Apple of unlawfully monopolising the market for cloud storage.

Apple responded in August by requesting the case's dismissal, describing the iPhone as "one of the most innovative and consumer-friendly products ever made."

Apple's legal team argues that iCloud remains optional, and users can manually back up their devices to a computer if they prefer not to use Apple's service.