Apple faces class action lawsuit over iCloud pricing, backup restrictions
What's the story
Apple is currently facing a class action lawsuit accusing the tech giant of creating an illegal monopoly by inflating iCloud prices and limiting iPhone backups to its own service.
Initially reported by Bloomberg Law, the plaintiffs argue that Apple has unfairly monopolized the market by only allowing iCloud to handle device backups and other storage needs. They asserted the company generates significant profit from the service.
About the case
Insufficient free storage and limited backup options
The lawsuit pointed out that Apple offers a mere 5GB of free iCloud storage, which is not enough for most users, forcing them to buy additional storage plans.
Since its launch in 2011, iCloud's free tier has remained capped at 5GB.
The plaintiffs also claimed that iPhone users have no choice but to use Apple's iCloud service for full device backups, as it is the only option for backing up certain file types like device settings, apps, and app data.
Scenario
Restricting competition in cloud storage market
The lawsuit alleged that Apple blocks competing cloud platforms from providing a comprehensive cloud solution that could effectively rival iCloud.
This enables Apple to restrict free iCloud storage to 5GB, knowing that most users will subscribe and pay for extra storage to back up their devices.
"There is no technological or security justification for Apple mandating the use of iCloud for Restricted Files," stated the lawsuit, adding Apple made this distinction solely to limit competition and promote iCloud over others.
Insights
Alleged antitrust violations also under scrutiny
Filed on Friday at the US District Court for the Northern District of California, the lawsuit asserted Apple's iCloud storage restrictions resulted in gross margins nearing 80%, significantly surpassing the company's already high overall gross margins.
It accuses Apple of violating the Sherman Act and Clayton Act through iCloud.
The lead plaintiff, Julianna Felix Gamboa, is represented by the Hagens Berman law firm, which has previously managed several class action lawsuits against Apple, including the $560M Apple Books price-fixing suit.
Facts
Plaintiffs are seeking trial
Hagens Berman has created a form on its official website for individuals who have purchased iCloud storage and are interested in joining the lawsuit.
The complaint seeks class-action status from the court, relief and changes in Apple's practices, and prevention of the alleged unlawful actions in the future.
The plaintiffs are also requesting a trial by jury.