New class-action lawsuit says you pay too much for iCloud

Posted:
in iOS

A class action complaint has been filed against Apple, claiming that users of iCloud are paying inflated prices for cloud storage by violating antitrust laws.

iCloud logo
iCloud logo



Filed on March 1, the class action complaint handed to the U.S. District Court for the Northern District of California accuses Apple of violations of the Sherman Act and Clayton Act. The violations, the filing states, are due to Apple's operations of iCloud.

The 37-page filing seen by AppleInsider is from the law firm Hagens Berman on behalf of main plaintiff Julianna Felix Gamboa. The complaint alleges that Apple has managed to establish "an illegal monopoly" due to its iOS cloud-based storage policies.

It is believed that Apple may have required Apple device owners to only use iCloud products to back up certain file types. This data can include things like app data and device settings, though other types of files can be stored via other cloud service providers without issue.

The law film says it is still operating an investigation into iCloud, but so far it seems there are "no technological or security justifications for this limitation on consumer choice." Instead, the firm states the "purpose and effect of this restraint on competition appears to be securing a monopoly for Apple's iCloud product."

By restricting certain files or data types to just iCloud, this is considered to be a problem for consumers since they don't necessarily wish to manage multiple storage interfaces, unlike a convenient single cloud storage service.

The suit says Apple also admits that cloud storage is "agnostic about what is being stored and handles all file content the same way, as a collection of bytes." It even points to Samsung, Apple's big smartphone rival, as it offers Samsung Drive to consumers but also gives them the option to perform full backups to Google Drive.

The notion of storing restricted files on iCloud for security reasons is also apparently undermined, due to Apple's use of infrastructure provided by other tech companies, including Google, Microsoft, and Amazon.

High margins and slight confusion



"Apple's restraints can be coherently explained only as an attempt to stifle competition," the suit states. After insulating iCloud from competitors, Apple then allegedly charges "supracompetitive fees" for iCloud plans.

"This is reflected in Apple's gross margins, which approach 80 percent for iCloud, substantially exceeding Apple's already high company-wide gross margins," the suit further points out.

In the document, it further claims the gross margins were an average of 78% for iCloud, and exceeds 80% for the most popular sub-50GB plans.

However, in trying to explain the margins Apple earns for each tier of storage it offers, the complaint mistakenly confuses the annual per-gigabyte cost to Apple for storage with the annual total cost for capacity at each tier.

For some reason, the document claims that Apple pays $1.86 per gigabyte per year for iCloud capacities from 5GB to 50GB, but then the per-gigabyte-per-year cost increases to $74.40 for between 200GB and 2TB.

Mislabeling issue aside, the suit still insists the gross margin per bundle far outweighs the company-wide gross margins. If Apple's competitors were able to handle things like app data and device settings, they would be "highly incentivized to compete aggressively on price," pressuring Apple to cut iCloud's costs.

The complaint's prayer for relief includes a class-action status from the court, relief and changes in practices from Apple, and the prevention of the supposedly unlawful actions in the future. It also demands a trial by jury.

As part of its publicity for the filing, Hagens Berman has set up a form asking for people who purchased an iCloud storage plan to potentially join the class, if it is granted the class action status.



Read on AppleInsider

Comments

  • Reply 1 of 16
    baconstangbaconstang Posts: 1,105member
    Every morning I wake up hoping to be able to shed the unbearable burden of the cost of keeping my data SAFE with Apple. 

    I'm going to start planning how splurge that 99¢ I will be saving every month!
    NYC362williamlondonBart YbloggerblogiOS_Guy80zeus423dewmestrongyStrangeDayswatto_cobra
  • Reply 2 of 16
    NYC362NYC362 Posts: 79member
    Someone doesn't like iCloud?  Then don't use it.  Plug your phone into a computer once a day or every couple of days and back everything up.

    These lawsuits are insane.  Nothing more than lawyers looking for the deepest pockets in the land- Apple - to try and make some money.    Judges need to start tossing these cases out from the start. 
    baconstangcitpeksBart YbloggerblogiOS_Guy80zeus423danoxstrongyStrangeDayswatto_cobra
  • Reply 3 of 16
    rezwitsrezwits Posts: 879member
    I freakin' have 3 security cameras using UNLIMITED iCloud video storage, FFS!
    ForumPostBart YbloggerblogiOS_Guy80byronlstrongywatto_cobraMacPro
  • Reply 4 of 16
    XedXed Posts: 2,539member
    LOL What a waste of everyone's time.

    That doesn't mean I don't think Apple is stingy with their 5 GB of free storage in 2024, a value that hasn't changed in 16(?) years, and think their cost per storage tier is pathetic compared to many, but it's their choice and not illegal to do any of this. I vote by actively spending a short amount of time each month cleaning my account up so that I can stay on the 99¢ option without needing the $2.99 plan.
    baconstangForumPostBart YiOS_Guy80zeus423williamlondonmuthuk_vanalingamStrangeDayswatto_cobra
  • Reply 5 of 16
    chasmchasm Posts: 3,291member
    1. This is Hagens-Berman, a plague on the legal profession and the routine filer of frivolous or nonsense cases against Apple and others. They are below "ambulance chasers" on the pecking order of attorneys, and they almost never win but they always settle to make the case go away. That's their whole schtick.

    2. FTA: "In the document, it further claims the gross margins were an average of 78% for iCloud, and exceeds 80% for the most popular sub-50GB plans."
    Um ... the sub-50GB plan(s) are/is popular because it's free. There is no sub-50GB paid tier.

    So ... there's no way there's a greater profit margin on a free plan than there is on a paid plan, geniuses.

    Greedy morons are the worst kind of morons.
    baconstangForumPostBart Ybloggerblogwilliamlondonstrongywatto_cobraMacPro
  • Reply 6 of 16
    lam92103lam92103 Posts: 124member
    Absolutely. I would rather use my NAS
    williamlondon
  • Reply 7 of 16
    The notion of storing restricted files on iCloud for security reasons is also apparently undermined, due to Apple's use of infrastructure provided by other tech companies, including Google, Microsoft, and Amazon.

    Tell me you don’t know anything about how Apple utilizes third parties for data storage without saying so.

    Google, Amazon & Microsoft have absolutely NO ABILITY to access your data. They don’t have the encryption keys nor do they have anything that ties data to certain users/devices. Hell, they don’t even know what the files contain (photos, video, documents). No metadata. They know NOTHING.

    These lawyers are idiots for making such a ridiculous statement which can be easily disproven.
    Bart Ywilliamlondonstrongybaconstangappleinsideruserchasmwatto_cobraMacPro
  • Reply 8 of 16
    JinTechJinTech Posts: 1,022member
    This is an embarrassment to our legal system. Don't let this person become an app developer because then they will try to sue Apple over the App Store fees! :| 
    williamlondonzeus423watto_cobraMacPro
  • Reply 9 of 16
    bloggerblogbloggerblog Posts: 2,462member
    I wonder what Hagens-Berman‘a profit margins are. I also wonder if other companies like Google and Microsoft get sued as often as Apple or if these are some sort of attacks on Apple. 
    Having said that, I find Apple’s $3 for 200GB to be a great deal. It manages storage capacity extremely well, never felt like I was tight on storage, and it backs up my laptop, iPhone, iPad, security footage, and I’ve been storing stuff since Mac.com days. 
    williamlondonbaconstangwatto_cobra
  • Reply 10 of 16
    avon b7avon b7 Posts: 7,661member
    This firm and specific details apart, there are some serious shortcomings to how cloud services are used as another 'bolt' on the lock in concept.

    It applies to many of the platform leaders and does require an investigation to pinpoint the current shortcomings, why they exist and whether they should be changed. 

    We now live in a cloud world (well those of us who have access to stable broadband) and need stronger regulations to accommodate that reality.

    The security/privacy side (at least within the EU) has been looked at but there are still aspects of cloud competition that need looking at. 

    Google pretty much had a stranglehold on Android WhatsApp backups until recently and after allowing users to become used to WhatsApp backups to Drive (but without impacting user's storage), it decided to remove that option, nudging users to paid tiers to remedy the sudden loss of storage capacity.

    Historically it has been impossible to migrate cloud content from one cloud account to another, requiring users to download and re-upload content. 

    Hopefully the interoperability side of things will also be looked at. 
    muthuk_vanalingam
  • Reply 11 of 16
    dewmedewme Posts: 5,356member
    Um, has anyone hired a lawyer recently? At the current $2.99 per month cost of the 200 GB plan you can easily pay for 10 years worth of iCloud storage for what you'll pay for ONE HOUR of a lawyers time. I'm not talking OJ murder trial level lawyers fees, I'm talking regular legal filings for things like probate, setting up trusts, etc. I can guarantee that no matter how ridiculously inflated you may think a lawyers retainer fee is going in for your tiny little legal transaction, with you maybe looking to get the vast majority of that money back, think again, they will find a way to spend every penny and come back asking for even more. They have a massively inflated sense of the value of their "thinking time" related to the smallest matter. If Albert Einstein was paid for his "thinking time" at lawyer rates we'd still be devoting our entire GNP to paying down that debt for a couple of more decades. 

    Every one of these attacks against successful business ventures that produce value that ends up with a payout, no matter how relatively small, puts the smell of blood in the water and the legal sharks and other non-contributors to our society will continue to circle until the victim is totally consumed. We're a consumer society and lawyers and politicians don't produce anything but they are very hungry and have an insatiable appetite to consume what others produce. 
    williamlondonstrongybaconstangStrangeDayswatto_cobraMacPro
  • Reply 12 of 16
    iCloud Photos is terrible if you have multiple devices with “optimized” photo storage on the devices. First, Time Machine backup of “optimized” photos is a disastrous process and you can’t backup original photos unless you dedicate one machine on which “original” photos are downloaded back on it.  Apple intentionally obsoleted the MacMini Server and macOS Server software years ago has taken away user’s option for LAN based multi-user-account, multi-device storage options. Class-Action should have included these two matters, haven’t they?
    edited March 3 williamlondon
  • Reply 13 of 16
    chasmchasm Posts: 3,291member
    iCloud Photos is terrible if you have multiple devices with “optimized” photo storage on the devices.
    I haven't found that to be the case, but ... Apple doesn't require you to use iCloud to back up anything. You are perfectly free to use an alternative syncing service (and many do), or set up your own personal cloud server to keep your devices' photos in sync. Many options there, and Apple does absolutely nothing to stop you from using them.
    baconstangStrangeDayswilliamlondonwatto_cobraMacPro
  • Reply 14 of 16
    XedXed Posts: 2,539member
    Apple intentionally obsoleted the MacMini Server and macOS Server software years ago has taken away user’s option for LAN based multi-user-account, multi-device storage options. Class-Action should have included these two matters, haven’t they?
    1) Of course decommissioning software is intentional. I can’t see how it would be accidental. 

    2) There are plenty of other server OS options and plenty of third-party SW that runs as a server on macOS if you need it. You could’ve also not installed a major macOS update that deprecated a feature that you still wanted to use. None of this is difficult to understand and non of it is reasonably class actionable.
    edited March 3 williamlondonwatto_cobra
  • Reply 15 of 16
    baconstangbaconstang Posts: 1,105member
    Xed said:
    2) There are plenty of other server OS options and plenty of third-party SW that runs as a server on macOS if you need it. You could’ve also not installed a major macOS update that deprecated a feature that you still wanted to use. None of this is difficult to understand and non of it is reasonably class actionable.
    The deprecation is why I still have a machine running Mojave to deal with my Aperture library.
    watto_cobra
  • Reply 16 of 16
    I can guarantee with 100% certainty that I do not pay too much for iCloud.
    watto_cobraMacPro
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