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A class action lawsuit was filed in San Jose, California. A federal court argued Friday that Apple’s iCloud storage service can create an environment that stifles competition and drives up prices for consumers because it stores important files exclusively in iCloud.
The proposed class consists of tens of millions of customers across the country.
Apple offers free iCloud storage for up to 5 GB of data to buyers of iPhones, iPads, and other hardware. Once users reach that limit, they must subscribe to iCloud+ on their Apple devices for a monthly fee to continue storing their photos, files, backups, and other features. In the US, 50 GB of iCloud+ storage costs $0.99 per month and up to 12 TB of storage costs $59.99 per month.
According to the complaint, competing cloud providers such as Microsoft and Dropbox can host photos and videos taken on Apple devices, but they also cannot host apps or settings data, which is critical if users need to restore it. Apple is blocking access to some restricted files, including: When the device is replaced. Therefore, customers who use Google’s cloud platform to store videos must continue to use iCloud to store restricted files.
“As Apple knows, this is not an attractive option,” the lawsuit claims.
Related: Apple is reportedly working on at least two foldable iPhone prototypes
The lawsuit blocks Apple’s attempts to explain that it’s restricting certain files for security reasons by pointing out that Apple uses other companies’ infrastructure to host iCloud data. Trying to. For context, iCloud appears to implement similar security measures as Google Drive, and Apple’s iCloud storage tier is priced similarly to its competitors. Meanwhile, 2 TB of iCloud storage costs $9.99, the same price as Dropbox and Google.
The lawsuit points out that Apple’s iCloud profit margin is 80%, which is 36% higher than the company’s overall profit margin, and argues that “Apple’s restraint can only be coherently explained as an attempt to stifle competition.” did. According to the complaint, Apple’s iCloud provided the company with “nearly pure profit” and was “not subject to competitive discipline.”
Related: Apple reportedly told dozens of employees to be reassigned or fired.
Apple’s services business, which includes subscriptions such as iCloud, hit a record high last year and continues to grow. Apple announced in February that its revenue for the previous quarter was $119.6 billion, up 2% from a year earlier.
“Apple reported higher revenue in the December quarter driven by iPhone sales and record revenue for its services segment,” Apple CEO Tim Cook said at the time.
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