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Apple Faces Class Action Allegations of Unfairly Dominating Cloud Services Market

By  |  March 3, 2024

Apple Inc. finds itself at the center of a proposed class action lawsuit alleging anti-competitive behavior in the realm of cloud services. Plaintiffs filed the complaint on Friday in the US District Court for the Northern District of California, accusing the tech giant of monopolizing cloud storage through its iCloud platform.

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    The heart of the matter lies in Apple’s alleged practice of restricting certain iPhone and iPad files exclusively to its iCloud platform, effectively creating a scenario where users are tethered to Apple’s ecosystem. These files include crucial application data and device settings, essential for users when they replace their devices. Plaintiffs argue that this maneuver unlawfully ties Apple’s mobile devices to iCloud, depriving consumers of choice and artificially inflating iCloud’s dominance, reported Reuters.

    According to the complaint, Apple’s iCloud currently commands an estimated 70% share of the cloud storage market, a figure that plaintiffs attribute to Apple’s unfair tactics. The suit contends that Apple has exploited its monopoly power by marking up iCloud prices to generate significant profits, far beyond what competition would allow. This, plaintiffs argue, has resulted in iCloud becoming one of Apple’s most profitable ventures, with profit margins exceeding those of its other products.

    Related: Apple Top Cloud Executive, To Leave Company In April

    The proposed class action seeks to represent tens of millions of users who have potentially been affected by Apple’s alleged monopolistic practices, with a nationwide class and a specific California subclass. These users, the suit claims, have been overcharged for iCloud plans due to Apple’s anti-competitive behavior.

    Cloud storage, a vital component of modern digital life, enables users to store and access data remotely. While Apple does face competition in the cloud services arena from tech giants like Google and Microsoft, as well as specialized providers like Dropbox, plaintiffs argue that the necessity of managing multiple cloud accounts with varying interfaces is an unattractive prospect for users. This, they assert, further strengthens Apple’s stranglehold on the market.

    As of reporting, Apple has yet to publicly respond to the allegations. However, the lawsuit marks a significant challenge to one of the tech industry’s biggest players, raising questions about the boundaries of competition in the rapidly evolving landscape of digital services.

    Source: News Bloomberg Law