Apple Faces Legal Battle Over Alleged iCloud Overcharging in the UK

Apple is under fire in the UK as consumer group Which? has filed a legal claim accusing Apple of overcharging 40 million British customers for its iCloud storage services. The case could lead to a £3 billion payout if successful, with each affected customer potentially receiving an average compensation of around £70.

Which? alleges that Apple has been “locking” users into its iCloud service by restricting full access to rival storage options and charging what it describes as “rip-off prices” for additional storage. While Apple offers a small amount of free storage, users are encouraged to purchase more space to back up essential data such as photos, videos, and messages. The subscription costs range from £0.99 per month for 50GB to a hefty £54.99 per month for 12TB.

Apple Faces Legal Battle Over Alleged iCloud Overcharging in the UK

According to Which?, these practices have been in place since 2015, allowing Apple to profit significantly at the expense of consumers. Anabel Hoult, the chief executive of Which?, stated:

“By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions. This legal action aims to secure redress for customers and promote a fairer, more competitive market.”

Apple has strongly denied the allegations, asserting that its iCloud practices are not anti-competitive. In a statement, the company argued that customers are not obligated to use iCloud and have access to third-party storage alternatives. Additionally, Apple claims it prioritizes security and works to make data transfer as seamless as possible.

“We reject any suggestion that our iCloud practices are anti-competitive and will vigorously defend against any legal claim otherwise,” Apple said.

This case is part of a broader wave of legal actions targeting major tech companies. Toby Starr from the legal firm Humphries Kerstetter noted the growing trend of class actions against Big Tech, saying:
“Although most of these claims are in their infancy and take years to resolve, the outcomes will start to impact the business practices of tech giants.”

Other companies, including Facebook, Google, Steam, and UK mobile providers, are facing similar claims at the Competition Appeal Tribunal.

See also: Apple to Use Samsung’s Foldable Display Tech for Affordable Vision Pro Headset

The international law firm Willkie Farr & Gallagher is handling the legal action against Apple, funded by Litigation Capital Management, which specializes in supporting high-stakes cases. If successful, the litigation funder will receive additional payments, but not a share of the damages.

Alan Davis, from Pinsent Masons, predicts more such cases in the future due to the high potential value of damages and the role of litigation funders. However, Davis highlighted that proving Apple’s alleged market abuse will be a challenge without prior regulatory findings.

The UK regulator has already launched a broader investigation into cloud services, which may add weight to the case against Apple.

What’s Next?

Which? has urged Apple to resolve the issue outside of court by reimbursing customers and enabling more competition in cloud services. However, Apple’s firm denial suggests the case is likely to proceed, potentially taking years to conclude.

This lawsuit marks a significant moment in the ongoing battle between Big Tech and consumer advocacy groups, setting the stage for a closer examination of the business practices of tech giants in the UK.