Apple seeks dismissal of class action claiming co. limits third-party storage services

Update: 

• Apple asked a California federal judge to dismiss a class action claiming the tech giant unfairly prevents competitors from entering the market for cloud storage on its devices by placing limitations on iCloud competitors.
• Apple Inc. attorneys filed the motion to dismiss the lawsuit Aug. 16. 
• Apple argues there are legal flaws in the plaintiffs’ monopolization claims and the iPhone user’s Sherman Act and California unfair competition claims are too old.
• The lawsuit also alleges Apple prevents other cloud storage providers from saving restricted files needed to restore a device. 
• It claims this disadvantages programs from Google and Microsoft, along with cloud storage specialists, such as Dropbox, Sync.com and IDrive, preventing these services from competing on an even playing field with iCloud.

Apple storage class action lawsuit overview: 

• Who: Apple is facing a class action lawsuit over its iCloud program. 
• Why: The lawsuit accuses Apple of placing limitations on cloud storage competitors that effectively make iCloud a monopoly.
• Where: The class action was filed in federal court in California.

(March 12, 2024)

A new Apple class action claims the tech giant unfairly prevents competitors from entering the market for cloud storage on its devices by placing limitations on iCloud competitors.

The restrictions include preventing other cloud storage providers from saving restricted files that are needed to restore a device when it is replaced, the class action claims. This disadvantages programs from Google and Microsoft, along with cloud storage specialists such as Dropbox, Sync.com and IDrive, preventing these services from competing on an even playing field with iCloud, the lawsuit argues.

ICloud holds more than 70% of the marketplace on storage for Apple mobile devices but that is not a reflection of the quality of the service or its security, the lawsuit says.

More than 100 million Americans have an iPhone or iPad and Apple’s gross margins on iCloud are nearly 80%, substantially higher than Apple’s already high gross margins, which are estimated at 40%, according to the lawsuit.

“From a security and functionality standpoint, iCloud is no better (and often inferior) to other cloud storage platforms,” the class action says. “Instead, Apple has achieved market dominance by rigging the competitive playing field so that only iCloud can win.” 

No plausible technological justification for restricted files, class action claims

Apple users who select a competing cloud storage service still need iCloud to back up the restricted files needed to restore a device, forcing the users to split cloud services, according to the plaintiff.

“There is no plausible technological or security justification for Apple granting iCloud exclusive access to restricted files,” the lawsuit says.

Apple is able to charge above-market prices for the iPhone due to agreements it put in place to block web-based apps outside the App Store, according to a class action lawsuit filed earlier this year.

Do you use Apple’s iCloud storage? Let us know in the comments.

The plaintiff is represented by Ben M. Harrington, Benjamin J. Siegel and Gayne A. Kalustian-Carrier of Hagens Berman Sobol Shapiro LLP.

The Apple storage class action lawsuit is Gamboa v. Apple Inc., Case No. 5:24-cv-01270, in the U.S. District Court for the Northern District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

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