Apple finds itself at the center of a £3 billion lawsuit in the United Kingdom, claiming the tech giant has violated competition laws by imposing inflated prices on its iCloud services. The lawsuit, which translates to approximately $3.8 billion in compensation damages, seeks restitution for UK consumers impacted by what is described as “rip-off” pricing due to Apple’s alleged monopoly over its cloud storage services.
In 2023, Apple increased the price of iCloud for UK consumers by 20% to 29% across various storage tiers. This price hike forms a central argument in the collective proceeding lawsuit filed with the UK’s Competition Appeal Tribunal (CAT). The lawsuit accuses Apple of leveraging its dominant position in the iOS operating system to unfairly restrict competition and lock users into its ecosystem, thereby overcharging customers for iCloud subscriptions.
The lawsuit aims to secure compensation for all affected Apple customers, with individual consumers potentially eligible for an average of £70 (approximately $90), depending on their length of service with Apple’s iCloud. The challenge is spearheaded by ‘Which?’, a consumer rights group, seeking permission from CAT to act as a class representative for UK consumers.
“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.” – Tommy Handley
The litigation is supported by Litigation Capital Management (LCM), a significant player in global litigation funding. This case is part of a broader trend where Big Tech companies face increased scrutiny through class-action style suits over anti-competitive practices. Similar lawsuits have emerged recently, such as the antitrust suit targeting Apple last year over App Store fees.
Apple’s dominance in related markets, like cloud storage, is under fire. The complaint further asserts that Apple gives preferential treatment to its cloud service, disadvantaging potential competitors.
“iOS users then have to pay for the service once photos, notes, messages and other data go over the free 5GB limit.” – Which
A notable aspect of Apple’s ecosystem includes features like the “Featuring Nominations” option in App Store Connect. This tool allows developers to nominate their apps for featuring, facilitating app launches and updates. Such features enable Apple to maintain strong control over its platforms and services, linking marketing efforts directly to App Store downloads.
The lawsuit’s progression will depend on whether CAT grants Which the authority to serve as a class representative. Should the tribunal permit this, the claim could proceed collectively on behalf of all affected users. The outcome could set a precedent for how consumer rights are protected against large corporations perceived to exploit market dominance.
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