Apple Inc. (NASDAQ:AAPL) is facing a proposed class-action lawsuit, which accuses the tech giant of monopolizing digital storage for its customers.
What Happened: Filed on Friday in the Northern District of California, the lawsuit claims that Apple is imposing “surgical” restrictions that prevent customers from effectively using any service except its iCloud storage system.
According to the lawsuit, iCloud is the only service that can host certain data from Apple’s phones, tablets, and computers, including application data and device settings. The plaintiffs argue that this practice has “unlawfully tied” the devices and iCloud together.
The lawsuit also alleges that Apple’s arbitrary prohibition on hosting Restricted Files distorts the competitive landscape, favoring iCloud over all rivals. This has made it impossible for potential cloud competitors to offer Apple’s device holders a full-service cloud storage solution.
With iCloud holding approximately 70% of the market share in cloud storage for Apple users, the plaintiffs also claim that this high market share has led to skyrocketing prices, which are “undisciplined by competition.”
“Apple has marked up its iCloud prices to the point where the service is generating almost pure profit. Apple's ability to sustain these prices is a testament to its monopoly power,” the lawsuit stated.
The plaintiffs are proposing a class-action suit with tens of millions of members, all of whom are iCloud platform users.
The news was first reported by The Hill. Apple did not immediately respond to Benzinga’s request for comments.
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