If the claim is successful, about 40 million Apple customers in the UK who have obtained iCloud services over the past nine years could be entitled to a payout.
Which? said the action is essential to changing the behaviour of huge companies like Apple that, it claims, “use their market dominance to engage in anti-competitive practices that reduce choice and drive up prices for consumers.”
The consumer champion’s action, filed with the Competition Appeal Tribunal, claims Apple has breached UK competition law by giving its iCloud storage service preferential treatment, “trapping” customers with Apple devices into using iCloud.
IOS has a monopoly and is in control of Apple’s operating systems and Which? said it is incumbent on Apple not to use that dominance to gain an unfair advantage in related markets, like the cloud storage market. But the consumer champion said that is exactly what has happened.
A key tactic to achieve this has been encouraging users to sign up to iCloud for storage of photos, videos and other data while simultaneously making it difficult to use alternative providers.
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Apple does not allow customers to store or back up all of their phone’s data with a third-party provider. This means iOS users then have to pay for iCloud once photos, notes, messages and other data go over the free 5GB limit.
Overcharging for subscriptions
Which? said that being “locked in” to this service over time could come at a significant cost in terms of price, quality and choice.
With Apple being such a dominant player in the phone and tablet market, this behaviour also creates a barrier for any new cloud service providers looking to enter the market and prevents healthy competition.
The consumer champion claims the resulting lack of competition has led to consumers being overcharged each year through their monthly iCloud subscription fees.
Apple raised the price of iCloud for UK consumers by between 20% and 29% across its storage tiers in 2023.
Claims for damages
Which? is seeking damages for all affected Apple customers that have obtained iCloud services since 1 October 2015. It estimates that individual consumers could be owed an average of £70, depending on how long they have been paying for the services during that period.
The firm is 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? said its legal action could help millions of consumers get redress for Apple’s anti-competitive abuse and create a more competitive and dynamic cloud storage market. This is possible because of the opt-out collective action regime that was introduced by the Consumer Rights Act 2015.
Anabel Hoult, Which?’s chief executive, said: “We believe Apple customers are owed nearly £3bn as a result of the tech giant forcing its iCloud services on customers and cutting off competition from rival services.
“By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions. 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.”
