Apple Faces Charge Over Allegation Of Trapping 40 Million UK Customers Into iCloud Service

Apple is facing a legal claim accusing it of effectively trapping 40 million UK customers into its iCloud service while charging them "exorbitant prices."

Consumer group Which? has launched the legal action, which could lead to a £3 billion payout if successful, with the average customer set to receive around £70, reported BBC.

Apple has rejected the claim, insisting that its practices are not anti-competitive. The company argues that users are not obligated to use iCloud and that many rely on third-party alternatives, adding that it "works hard to make data transfer as easy as possible."

Toby Starr, from legal firm Humphries Kerstetter, commented that this case is another example of "the growing tide of large class actions against big tech," which has "operated without sufficient constraint."

Other tech giants, including Facebook, Google, gaming company Steam, and leading UK mobile providers, are also facing legal claims in the same court, the Competition Appeal Tribunal.

"Although most of these claims are in their infancy and take a long time to resolve, there will be more decisions coming out over the next couple of years, and there will be settlements. These will start to affect the tech giants' businesses," Mr Starr added.

A Price to Pay

Apple offers a small amount of free digital storage, but customers are encouraged to pay for its iCloud service to back up data such as photos, videos, messages, and contacts. The costs for this storage range from £0.99 per month for 50GB to £54.99 per month for 12TB.

Apple does not provide full access to rival storage services on its products, citing security reasons. However, this practice also contributes to the company's substantial profits.

Which? claims that over the past nine years, since 2015, Apple has effectively locked users into its services and overcharged them.

"By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing consequences," said Anabel Hoult, chief executive of Which?. "Taking this legal action means we can help consumers get the redress they are owed, deter similar behaviour in the future, and create a better, more competitive market."

Apple has strongly denied Which?'s allegations, stating, "We reject any suggestion that our iCloud practices are anti-competitive and will vigorously defend against any legal claim otherwise."

'Very High Value Damages'

Which?'s legal action will be funded by Litigation Capital Management, and the group has instructed international law firm Willkie Farr & Gallagher. The law firm will receive fees as the case progresses, with additional payments if the case is successful, but it will not receive a percentage of any damages.

Alan Davis, from law firm Pinsent Masons, suggested that more similar cases are likely in the future. "It is inevitable that further claims of this nature will continue to be brought given the very high value of the aggregate damages and the role of and incentive for litigation funders to support these claims, which might not otherwise be brought without that financial support," he explained.

He also noted that, as there have been no infringement decisions under EU or UK competition law, it will be up to the claimant to prove the market abuse they are alleging.

However, Davis pointed out that the regulator had announced a broader investigation into cloud services in the UK.

Legal actions against big tech firms often take years to resolve. Which? has urged Apple to settle the matter "without the need for litigation" and wants the tech giant to refund consumers and increase competition.