Which? launches £3 billion action against Apple over competition law breaches

Around 40 million Apple customers in the UK who have obtained iCloud services over the last nine years could be entitled to a payout if the claim is successful.

Which? believes taking this action is essential to changing the behaviour of huge companies like Apple that use their market dominance to engage in anti-competitive practices that reduce choice and drive up prices for consumers.

The consumer champion’s action, filed with the Competition Appeal Tribunal, claims Apple has breached UK competition law by giving its iCloud storage service preferential treatment, “trapping” customers with Apple devices into using iCloud. 

iOS has a monopoly and is in control of Apple’s operating systems and it is incumbent on Apple not to use that dominance to gain an unfair advantage in related markets, like the cloud storage market. But that is exactly what has happened. 

A key tactic to achieve this has been encouraging users to sign up to iCloud for storage of photos, videos and other data while simultaneously making it difficult to use alternative providers, including because Apple does not allow customers to store or back-up all of their phone’s data with a third-party provider. iOS users then have to pay for the service once photos, notes, messages and other data go over the free 5GB limit.

Which? claims Apple has also overcharged users for these subscriptions.

Being “locked-in” to this service over time could come at a significant cost in terms of price, quality and choice. With Apple being such a dominant player in the phone and tablet market, this behaviour also creates a barrier for any new cloud service providers looking to enter the market and prevents healthy competition. 

Which? claims the resulting lack of competition has led to consumers being overcharged each year, increasing up to £13.36 this year, through their monthly iCloud subscription fees.  Apple raised the price of iCloud for UK consumers by between 20% and 29% across its storage tiers in 2023.

Which? is seeking damages for all affected Apple customers that have obtained iCloud services since 1st October 2015. It estimates that individual consumers could be owed an average of £70, depending on how long they have been paying for the services during that period.

Which? is urging Apple to resolve this claim without the need for litigation by offering consumers their money back and opening up iOS to allow users a real choice for cloud services.

Which?’s legal action could help millions of consumers get redress for Apple’s anticompetitive abuse and create a more competitive and dynamic cloud storage market. This is possible because of the opt-out collective action regime that was introduced by the Consumer Rights Act 2015. 

It has been almost impossible for individual consumers to take on big companies like Apple in the past, but the collective proceedings regime allows Which? to represent consumers where large numbers of people have been harmed by anticompetitive conduct.

This action is vital to obtain redress for consumers and to send a clear message to powerful companies like Apple, that if they engage in harmful, manipulative practices, Which? will hold them to account.

Anabel Hoult, Which? Chief Executive, said:

“We believe Apple customers are owed nearly £3 billion as a result of the tech giant forcing its iCloud services on customers and cutting off competition from rival services.  

“By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions. Taking this legal action means we can help consumers to get the redress that they are owed, deter similar behaviour in the future and create a better, more competitive market.”

-ENDS-

Visit www.cloudclaim.co.uk to find out more about the claim and register for email updates.

Notes to editors:

Which? has instructed leading international law firm Willkie Farr & Gallagher (UK) LLP on this landmark case. Litigation Capital Management (LCM), one of the world’s largest litigation funders, will fund the claim, partnering with Which? and Willkie to see this action through to the end. Everything is in place to get the best possible result for UK consumers and ensure that Apple is made to pay for its unlawful and harmful conduct.

Background on the legal case

Which? has launched legal action against US tech giant Apple on behalf of UK consumers that have paid for iCloud services since 1 October 2015 - to win them back around £3 billion in damages and to stop Apple’s anti-competitive behaviour.

Which? believes Apple has been:

1. Favouring its own cloud storage services on its iOS devices, compared to other cloud storage providers, by having technical restrictions and practices that prevent users of iOS from storing key file types (i.e. restricted files), as well as unfair choice architecture; and

2. Tying iCloud services to iOS devices, which are purchased by consumers.

Together, this unlawful conduct locks users into Apple’s iCloud storage services, prevents them from switching to alternative cloud providers and enables Apple to charge higher fees for iCloud services than would be the case if Apple behaved lawfully.  

Collective proceedings are legal proceedings brought on behalf of people who have been affected by a common event or series of events. In this scenario Which? is representing UK iCloud users, working to get compensation for what we believe consumers are owed and require Apple to open up iOS to allow users a real choice for cloud services.

Collective proceedings can be brought on an ‘opt-out’ basis, where members of the class are automatically included in the claim unless they decide not to be. They can also be brought on an ‘opt-in’ basis, where members of the class must choose to join and be part of the claim.  

A similar case has already been commenced against Apple on this issue in the US but has not yet concluded.

The claim by Which? is being brought on an ‘opt-out’ and ‘opt-in’ basis. This means that, if consumers are eligible and live in the UK, they will automatically be included in the claim unless they tell Which? that they do not want to be. If consumers live abroad but are otherwise eligible, they need to tell Which? that they want to be included.

There is no guarantee that compensation will be made available in the future – the case must first be won in the Competition Appeal Tribunal, unless an earlier settlement is agreed.

Now the case has been filed, the next step will be for Which? to obtain permission from the Competition Appeal Tribunal to act as class representative and for the claim to proceed on a collective basis.

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. 

As an organisation we’re not for profit and all for making consumers more powerful. The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk