Apple Inc. (NASDAQ:AAPL) is facing a proposed class-action lawsuit, alleging that the tech giant has monopolized digital storage for its customers.
Filed in the Northern District of California on Friday, the lawsuit contends that Apple has implemented stringent restrictions that effectively compel customers to use only its iCloud storage system. It argues that iCloud is the exclusive service capable of hosting certain data from Apple devices like phones, tablets, and computers, including application data and device settings. According to the plaintiffs, this practice constitutes an “unlawful tie” between Apple’s devices and iCloud.
Moreover, the lawsuit claims that Apple’s prohibition on hosting Restricted Files creates a distorted competitive landscape, unfairly favoring iCloud over competing services. This alleged favoritism hinders potential cloud storage rivals from offering Apple device users a comprehensive cloud storage solution.
The plaintiffs assert that Apple’s constraints on cloud storage violate the Sherman Act, rendering them “unlawful” under California’s Unfair Competition Law (UCL). Additionally, they argue that these restrictions constitute an “unfair” practice under the UCL, as they represent at least a potential violation of antitrust laws, contravene the policy and spirit of antitrust laws, pose a threat to competition, and result in substantial harm to consumers.
The plaintiffs in the lawsuit against Apple also argue that iCloud’s dominance, capturing about 70% of the market share in cloud storage for Apple users, has resulted in excessively high prices that remain unchecked by competition.
According to the lawsuit, Apple has hiked iCloud prices to a level where the service generates significant profits almost exclusively. The plaintiffs contend that Apple’s ability to maintain these high prices is indicative of its monopoly power over the cloud storage market.
The proposed class-action suit aims to represent tens of millions of iCloud platform users who have been affected by these alleged monopolistic practices.
This legal challenge adds to the ongoing scrutiny Apple faces regarding its perceived monopolistic behavior. In January, the tech giant confronted a $1 billion lawsuit in the UK concerning its App Store fees, filed by over 1,500 app developers who accused Apple of imposing unfair charges. Apple sought to have the lawsuit dismissed by the London tribunal.
In February, Epic Games secured a $700 million victory in an antitrust lawsuit against Google. Following this win, Epic Games CEO Tim Sweeney expressed his intention to challenge Apple’s decision to ban web apps. Sweeney has been a vocal critic of both Apple and Google’s control over mobile app stores, spearheading efforts against their alleged monopolistic practices.