Apple is currently addressing a new class-action lawsuit which accuses the company of monopolizing cloud storage and overcharging its iPhone customers.
The lawsuit, lodged in a San Jose, California federal court, claims that Apple coerces its users to adopt its iCloud service for backing up essential data and device settings, thus breaching antitrust laws.
The tech giant swiftly responded by requesting the court to dismiss the lawsuit, arguing that iPhone users are not mandated to use iCloud as their sole cloud storage option.
Apple’s legal stance highlights the presence of ample competition in the cloud storage market, countering claims of monopoly.
According to the suit, Apple engages in unfair practices by linking the sale of iPhones with iCloud storage services. iCloud offers a certain amount of free storage, after which it transitions into a paid subscription model.
This strategy, the plaintiffs argue, unfairly binds two distinct products together, potentially stifling competition and consumer choice.
Steve Berman, representing the plaintiff, commented on Apple’s dismissal request, stating, “nothing we hadn’t expected and are ready to handle.”
This indicates the legal team’s preparedness to address Apple’s defenses.
Further details from Apple’s dismissal filing reveal that the company’s policy allows third-party storage options for photos and videos but restricts this for certain data files crucial for restoring Apple devices.
Apple defends this policy by asserting it ensures heightened security levels for its users.
Moreover, Apple refuted the claim of imposing inflated prices on consumers, describing it as “implausible.”
The company pointed to public data showing competitive pricing structures for iCloud, arguing that allegations of excessive pricing based on speculative margins are unfounded.
The lawsuit was initially filed by a Los Angeles resident who pays $2.99 monthly for her iCloud storage plan.
She seeks to represent a national class of millions potentially affected by Apple’s pricing strategies.
Her legal team claims that cloud storage, a billion-dollar market, is dominated by Apple, allegedly to suppress competitive forces.
In addition to this lawsuit, Apple faces various other legal challenges in California and beyond, including issues related to its App Store and Apple Pay services.
These cases continue to scrutinize Apple’s business practices across multiple fronts.
The case, officially titled Julianna Felix Gamboa v. Apple Inc., is currently before the U.S. District Court, Northern District of California, under case number 5:24-cv-01270.
Legal representation for the plaintiffs includes Steve Berman and Ben Harrington of Hagens Berman Sobol Shapiro, while Apple’s defense is led by Belinda Lee and Sarah Ray of Latham & Watkins.