Apple Accused of Trapping 40 Million Customers into iCloud Service

Apple is facing an almost £3 billion ($3.78 billion) lawsuit after British consumer group Which? on Thursday alleged that the company breached competition law by locking millions of its customers out of its iCloud service and charging them “rip-off prices.”

Apple users receive 5GB of free storage to back up photos, messages, and other content, and are then encouraged to pay for the service once they exceed the limit. Prices for extra storage in the UK range from £0.99 a month for 50GB of space to £54.99 a month for 12TB.

Which? alleges that the company makes it difficult for customers to use alternative cloud storage providers “by giving its ‌iCloud‌ storage service preferential treatment,” and “‘trapping’ customers with Apple devices into using ‌iCloud‌.”

The consumer group filed the legal action with the Competition Appeal Tribunal, and said it was seeking damages for 40 million Apple users in the UK. If successful, the lawsuit could result in a £70 payout per customer. According to the Consumer Rights Act 2015, all those eligible are automatically included in the claim unless they choose to opt out.

Which? said it was urging Apple “to resolve this 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.” Which? CEO Anabel Hoult commented: “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 in a statement said it rejected the suggestion that its ‌iCloud‌ practices are anticompetitive, vowing to “vigorously defend against any legal claim otherwise.” Apple said it works hard to make data transfer as easy as possible, and that nearly 50% of its customers do not need nor pay for an ‌iCloud‌+ subscription. It added that its pricing was in line with that of other cloud storage providers.

(Via Reuters.)