Class-Action Suit Says You’re Overpaying for Apple iCloud Storage

Apple is at the center of a newly proposed class-action lawsuit that claims the company holds an illegal monopoly over cloud storage.

In a complaint filed in a federal court on Friday (March 1), a California law firm alleges that Apple is making it unreasonably difficult to use cloud storage systems other than its in-house iCloud service, charging what the firm calls “supracompetitive fees” and affecting tens of millions of iCloud users.

The complaint is still in its early stages, and it’s unclear whether it will move forward. However, the suit says it believes “the class will consist of tens of millions of members,” all iCloud users. If you purchased an iCloud storage plan in the last four years, you can fill out a form at the law firm’s site to learn more about its investigation into Apple’s iCloud policies.

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Apple did not immediately respond to requests for comment.

“Undisciplined by competition, Apple has marked up its iCloud prices to the point where the service is generating almost pure profit,” the suit says. “Apple’s ability to sustain these prices is a testament to its monopoly power.”

While several companies provide cloud storage solutions for photos, videos and documents, the suit charges that Apple blocks third-party cloud storage systems from hosting app data and device settings, which makes it difficult for users to access necessary information when they replace or update their phones. 

That, per the suit, forces users to either juggle two cloud storage systems — one for photos and videos, and another for app data and settings — or exclusively use iCloud.

“This is far less convenient than using a single cloud storage service capable of storing all file types in one location,” according to the suit. “Through the restraints challenged in this lawsuit, Apple has ensured that only iCloud can perform this basic function.”

iCloud, Google Cloud, Dropbox monthly fees similar

Though the suit says tens of millions of users have been overcharged by iCloud, it’s unclear to what extent users are paying more. Two terabytes of iCloud storage costs $9.99 a month, which is equivalent to a Google Cloud subscription or a Dropbox one. The suit alleges Apple marks up storage by as much as 61%, since it buys storage from Google.

For Apple, the storage app has quietly been part of a profit-making machine. Though the company reported weak quarterly earnings in December, Apple’s services (including iCloud and App Store sales) generated  more than $22 billion in revenue, a 16% jump from the previous year. It’s worth noting its App Store division is facing antitrust accusations from the U.S. and beyond. In addition, the European Union earlier today (March 4) slapped Apple with a $2 billion antitrust lawsuit for “abusing” the app store.

What happens next?

Separately, iPhone users began receiving settlement money from Apple earlier this year following a battery slowdown lawsuit in 2018. Claimants are expected to receive a cash settlement of $92.17 per device. 

In the iCloud case, once the complaint is filed, a class representative will file a motion to have the court determine whether it should approve the class and the complaint.

As Kiplinger previously reported, if you think you may be a class member in a suit but haven’t been contacted, there are several websites, such as www.consumer-action.org, offer information on current cases and settlements.

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