A recent class-action lawsuit accuses Apple of “price-fixing iCloud services at a level that the service is essentially pure profit.” According to Bloomberg, the plaintiffs allege that Apple “cheated in competition” by only allowing iCloud to manage device backups and other storage needs.
“Apple device users are provided with 5GB of free iCloud storage, but according to Apple’s iCloud revenue, most users find this capacity inadequate for their storage needs and have to purchase additional iCloud storage packages,” the lawsuit states.
Notably, the free iCloud plan has remained limited to 5GB of storage since Steve Jobs introduced the cloud service at WWDC 2011.
Free iCloud storage capacity remains at 5GB after more than a decade
The crux of the lawsuit emphasizes the fact that iPhone users only have one option when backing up their entire device, and that option is Apple’s own iCloud service. And as we know, iCloud only offers 5GB of free storage.
The plaintiffs argue that by doing so, Apple “forecloses competition with a viable cloud solution to iCloud.” Thus, Apple can choose to limit free iCloud storage to 5GB and know that most people will need to subscribe and pay for additional storage just to back up their devices.
“These restrictions by Apple eliminate that choice and, by doing so, effectively coerce Apple device users to use iCloud for cloud storage. Technically, Apple imposes what economists call a ‘tying’ constraint. That is, if an iPhone or iPad user wants to use cloud storage, iCloud is their only choice to satisfy that requirement. And for anyone requiring more than 5GB of storage capacity, which is most of Apple’s customers, they will have to pay for it.”
iPhone users frequently encounter full iCloud storage
“There is no legitimate technological or security reason for Apple to require the use of iCloud,” the lawsuit states. “Apple’s only reason for this differentiation is to limit competition and gain an advantage for its iCloud product over competing cloud platforms.”
The lead plaintiff is represented by the law firm Hagens Berman, which is also behind several other class-action lawsuits against Apple. Most notably, the firm handled a $560 million class-action lawsuit accusing Apple of price-fixing in the Apple Books reading service.
