The United Kingdom-based consumer advocacy organization, Which?, has initiated a substantial £3 billion lawsuit against tech giant Apple, alleging violations of the UK’s consumer protection laws. According to Which?, Apple is accused of engaging in anti-competitive behavior by providing its iCloud storage service with preferential treatment and effectively “trapping customers with Apple devices into using iCloud versus alternative cloud services.”
Which? highlights that Apple encourages its users to sign up for iCloud for the storage of essential data such as photos, videos, and documents, while simultaneously creating obstacles for those wishing to utilize alternative providers. One significant barrier noted is Apple’s restriction on users, preventing the storage or backup of all their phone data with third-party storage solutions, making it exceedingly challenging to switch providers.
How is Apple overcharging customers for iCloud?
According to Which?, once users exceed the complimentary 5GB of data offered by iCloud, they are subjected to excessive charges for additional storage. The organization explains that being “locked-in” to iCloud can incur considerable costs over time regarding price increases, diminished quality, and limited service options. In fact, Apple implemented a price hike on iCloud services in the UK in 2023, raising costs between 20% and 29% across various storage tiers.
The consumer group points out that Apple’s dominance in the smartphone and tablet market further exacerbates this issue, as its strategy locks customers into its own cloud services, creating significant barriers for potential new cloud service providers attempting to enter the competitive market. Which? seeks damages for alleged anti-competitive conduct dating back to October 1, 2015, estimating that the average UK customer may be owed around £70, depending on their duration of payment for iCloud services. Moreover, Which? is urging Apple to proactively resolve these claims outside of the courtroom by offering refunds to affected consumers and reconsidering its policies to provide genuine choice in cloud service providers for iOS users.
Other ongoing competition inquiries into Apple:
This lawsuit from Which? arrives amidst a backdrop where Apple is facing potential fines for not adhering to the European Union’s Digital Markets Act (DMA). The European Commission concluded in March of this year that Apple was non-compliant with the DMA, primarily regarding its alleged anti-steering policies that restrict developers from directing their customers toward alternative channels for accessing their services.
Simultaneously, the United States government initiated a lawsuit against Apple in June, accusing the corporation of maintaining a monopoly within the smartphone market. The legal action claims that Apple intentionally limits key functionalities of third-party messaging applications, such as enabling background operations and facilitating camera access for video calls. Such restrictions discourage users from migrating to Android devices, the lawsuit asserts. Moreover, it alleges that Apple also limits significant features on non-Apple smartwatches, further disincentivizing potential buyers from choosing smartwatches from competing brands.
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How does the increased cost of iCloud storage affect consumers financially according to Rebecca Smith?
**Interview with Rebecca Smith, Consumer Rights Advocate at Which?**
**Interviewer:** Thank you for joining us today, Rebecca. Can you explain the basis of the lawsuit Which? has filed against Apple?
**Rebecca Smith:** Absolutely, thank you for having me. Our lawsuit against Apple stems from allegations that the company is violating UK consumer protection laws through anti-competitive practices. We believe Apple is effectively trapping consumers into using its iCloud storage service by making it difficult to switch to alternative providers. This creates a monopoly that unfairly affects users’ choices and wallets.
**Interviewer:** You mention that Apple is creating barriers for users. Can you elaborate on what these barriers look like?
**Rebecca Smith:** Certainly. Apple encourages users to migrate their essential data—such as photos, videos, and documents—to iCloud, but once users are in the ecosystem, they encounter significant obstacles if they wish to switch to another cloud service. For instance, Apple restricts the ability to back up all phone data to third-party storage solutions, making it almost impossible to transition away from iCloud without losing data.
**Interviewer:** How is this impacting consumers financially?
**Rebecca Smith:** When users exceed the complimentary 5GB of iCloud storage, they face steep charges for additional data. Apple has recently raised prices for these services by 20% to 29% in the UK, putting a financial strain on consumers who feel compelled to stick with iCloud due to the lock-in strategy. Over time, these incremental costs can add up significantly, leading to an unsustainable expense for the average user.
**Interviewer:** With Apple’s market dominance, how does that play into your claims of anti-competitive behavior?
**Rebecca Smith:** Apple’s extensive market presence with its smartphones and tablets gives it enormous leverage. By locking consumers into its ecosystem, Apple is effectively hindering competition and choice. This makes it incredibly challenging for alternative cloud service providers to compete, which not only affects the market but also limits innovation and leads to higher prices for consumers.
**Interviewer:** What outcome is Which? hoping to achieve with this lawsuit?
**Rebecca Smith:** We’re seeking to hold Apple accountable for its practices and push for fairer competition in the cloud storage market. Ideally, we want to create a more equitable scenario where consumers have the freedom to choose their storage solutions without feeling trapped and to ensure that prices are kept competitive.
**Interviewer:** Thank you for your insights, Rebecca. It will be interesting to see how this lawsuit unfolds.
**Rebecca Smith:** Thank you for having me. We’re committed to fighting for consumer rights and ensuring that every user has a fair choice in this digital age.
