U.S. Court Denies Apple’s Motion to Dismiss iCloud Antitrust Lawsuit

A federal judge in California has rejected Apple’s attempt to dismiss a class-action lawsuit accusing the tech giant of illegally monopolizing the cloud storage market through its iCloud service, allowing the case to proceed. The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that Apple violates antitrust laws by requiring iPhone users to back up critical device settings and restricted data exclusively on iCloud, stifling competition and inflating prices for consumers.

U.S. District Judge Eumi Lee, in her ruling on Monday, found that the plaintiffs’ amended complaint provided sufficient evidence to support claims of anticompetitive behavior. The lawsuit, led by plaintiff Julianna Felix Gamboa, asserts that Apple’s policies prevent third-party cloud services, such as Google Drive or Dropbox, from offering full-service storage solutions for iPhone users, particularly for essential files needed to restore devices. This restriction, the plaintiffs argue, locks consumers into Apple’s ecosystem, forcing them to pay higher prices for iCloud subscriptions, which start at $2.99 monthly for 50GB after a free 5GB tier.

The case, originally filed in 2024, was initially dismissed by Judge Lee for insufficient claims but was revived after plaintiffs submitted a second amended complaint earlier this year. Apple argued that its iCloud policies ensure high security and that robust competition exists in the cloud storage market, citing alternatives for storing photos and videos. However, Judge Lee determined that the plaintiffs’ new allegations about the critical role of restricted data files were compelling enough to move forward. She also noted that Apple’s claim that the lawsuit was untimely—due to a four-year statute of limitations under U.S. antitrust law—was premature and could be revisited later.

“Apple’s alleged restraints can be coherently explained only as an attempt to stifle competition,” the lawsuit states, estimating that the company dominates a billion-dollar market for iOS cloud storage. The plaintiffs, represented by Hagens Berman Sobol Shapiro, seek to represent tens of millions of iCloud subscribers nationwide who may have overpaid due to Apple’s practices. Damages could potentially be tripled under federal antitrust law.

Apple, which reported $383 billion in revenue in 2023, denied any wrongdoing and did not immediately respond to requests for comment. The company faces multiple antitrust challenges, including a high-profile Department of Justice lawsuit in New Jersey accusing it of monopolizing the smartphone market, as well as scrutiny over its App Store and Apple Pay practices.

The case, Julianna Felix Gamboa v. Apple Inc., is set to continue in the Northern District of California (No. 5:24-cv-01270). Legal experts anticipate a lengthy battle, with discovery and potential class certification on the horizon.