Federal Judge Rules Apple Must Face Class Action Lawsuit Over iCloud Storage Monopoly Claims

A landmark decision in federal court has opened the door for millions of iPhone and iPad users to sue Apple Inc.

On June 16, 2025, U.S. District Judge Eumi K. Lee denied Apple's motion to dismiss a proposed class action lawsuit that accuses the tech giant of illegally monopolizing the market for digital storage on its devices.

The ruling means tens of millions of consumers who purchased iCloud storage plans may finally have their day in court.

What Are the Claims in the Apple iCloud Storage Lawsuit?

Class plaintiffs say Apple deliberately blocks third-party cloud storage providers from offering alternative backup solutions for iPhones and iPads.

While you can use services like Google Drive or Dropbox for some files, Apple exclusively blocks what the lawsuit calls "Restricted Files" – including app data and device settings – from any service other than iCloud.

The plaintiffs argue that this restriction creates an illegal monopoly over cloud storage on Apple mobile devices – with only 5GB of free storage per account, most users are forced to purchase one of Apple's iCloud storage plans "just to maintain basic device backups."

This proposed class action mainly relies on violations of the Sherman Act, the cornerstone of American antitrust law. 

Understanding "Restricted Files" vs "Accessible Files"

The distinction between the two file categories in controversy forms the foundation of the antitrust claims against Apple.

Restricted Files include:

• Device settings and preferences
• App data needed for phone restoration
• System configurations
• Authentication data

Accessible Files include:

• Photos and videos
• Documents and PDFs
• Music files
• General user-created content

This division means that while you can store your vacation photos on Google Drive, you cannot use the tech to create a complete backup of your iPhone. If your device breaks or gets lost, only iCloud can restore it to its previous state with all apps and settings intact.

Historic data

The importance of data storage for all iPhone files becomes clear when you consider how integrated our digital lives have become. 

Your phone has years of customized settings, app configurations, and personal data, making it uniquely yours.

Apple's restriction means you have no choice but to use iCloud if you want to preserve your complete digital fingerprint.

Sherman Act Violations Explained

The Sherman Act, enacted in 1890, remains America's primary legal weapon for combating anticompetitive business practices. 

The lawsuit against Apple invokes two key theories under this landmark antitrust law.

Tying allegations 

The plaintiffs in this case allege an “illegal tying arrangement” exists in the iCloud user agreement. In antitrust language, tying occurs when a company uses its power in one market (smartphones and tablets) to force customers to buy a second product (cloud storage).

District Judge Eumi Lee found that plaintiffs adequately presumed this "technological tie," where Apple's software design artificially links device ownership to iCloud usage.

Monopolization claims 

The case also presents monopolization claims under Section 2 of the Sherman Act.

To prove monopolization, plaintiffs must show:

• Apple possesses monopoly power in a relevant market.
• Apple willfully acquired or maintained that power through anticompetitive means.
• These actions harmed competition and consumers.

Judge Lee found all these elements plausibly exist, particularly given Apple's 96.1% market share and the artificial restrictions that prevent meaningful competition.

Why Will the Case Move Forward?

Judge Lee's comprehensive order denying Apple's motion to dismiss addressed each of Apple's defenses and found them inadequate.

The court's key findings include:

• Plaintiffs adequately defined relevant markets for both "full-service" cloud storage and all cloud storage on Apple devices.
• Apple's high market share and barriers to entry and expansion demonstrate monopoly power.
• The alleged tying arrangement satisfies all antitrust liability elements.
• Claims fall within the statute of limitations due to Apple's ongoing enforcement of restrictions.

Apple’s response 

Apple attorneys argued that its restrictions serve legitimate security purposes. 

However, the court noted two glaring contradictions in their defense.

• Apple allows third-party services to store highly sensitive photos and videos while blocking mundane settings files. 
• Apple's own use of Google's infrastructure to run iCloud undermines any security-based justification.

The court also rejected Apple's narrow market definition, which would have excluded competing cloud services.

Judge Lee recognized that even if some substitutes exist, Apple's restrictions prevent competitors from offering equivalent services.

Plaintiffs Explain Why They Sued

To better understand the allegations in this complex lawsuit, we should listen to two California class plaintiffs whose experiences mirror those of millions of Apple users. 

Lead plaintiffs story

Los Angeles resident Julianna Felix Gamboa started hitting storage limits on her iPhone after receiving “Storage Almost Full” notifications that most iPhone users know too well. 

After deleting apps and photos without success, she reluctantly signed up for a 200GB iCloud plan at $2.99 monthly in September 2022. 

What frustrated Gamboa most was discovering she already paid for Google One storage through her Gmail account – offering more space for less money – but Apple wouldn’t let her use it for her iPhone’s essential backup files. 

Despite spending hours researching iPhone backup alternatives and visiting an Apple Store for help, she learned she could only back up crucial files like her app data, device settings, and message history to iCloud.

“I felt trapped,” her complaint states, paying Apple monthly fees for a service she could get cheaper elsewhere.

Co-plaintiff’s similar narrative 

Class plaintiff Thomas Dorobiala's experience reveals how Apple's storage restrictions become increasingly expensive. 

He first purchased a 200GB iCloud plan in June 2020 for $2.99 monthly, thinking it would be temporary until he could organize his files. What Dorobiala didn’t anticipate was how his work documents, family videos, and years of accumulated app data would eventually push him to upgrade to the 2TB plan at $9.99 monthly.

The breaking point came when he calculated he was paying nearly $120 annually for storage while his wife’s Android phone backed up everything to Google Drive’s free 15GB allocation.

His attempts to use Dropbox (where he had a business account) or Microsoft OneDrive for complete iPhone backups also proved futile.

Both plaintiffs say Apple's iCloud backup restrictions left them with no meaningful choice in the cloud storage market, forcing them to pay whatever Apple charged for storage they could have obtained more cheaply elsewhere.

Apple's Market Dominance in Cloud Storage

Court documents revealed that Apple commands an astounding 96.1% share of cloud storage revenue on Apple mobile devices, and its near-total market dominance translates into massive profits.

Class attorneys say that iCloud generates approximately $16 billion in annual revenue. However, Apple pays Google just $0.0031 per gigabyte per month for the infrastructure to run iCloud.

Unjust enrichment claims 

According to the lawsuit, these numbers translate into Apple's unjust enrichment on the consumer's dime:

• For a 50GB plan at $0.99/month, Apple's markup exceeds 600%
• The 200GB plan at $2.99/month represents an even higher margin
• Gross margins on iCloud storage plans reportedly exceed 70%, nearly double Apple's company-wide average

Gamboa argues that this pricing structure has allowed Apple to transform what should be a competitive market into a profit center that generates billions with minimal competition.

Monopolistic pricing dominance 

Apple's current iCloud storage plans include:

• 50GB: $0.99/month
• 200GB: $2.99/month
• 2TB: $9.99/month
• 6TB: $29.99/month
• 12TB: $59.99/month

The disparity becomes clear when compared to competitors' offerings, according to class plaintiffs in this case.

Google provides 15GB of free storage – three times Apple's offering – while Microsoft offers similar generous allowances. 

The lawsuit alleges that if actual competition existed in the market for digital storage on Apple devices, these prices would face significant downward pressure.

What Happens Next in the Apple iCloud Lawsuit

Litigation is now entering critical phases.

Apple must file its answer to the complaint within 21 days of the June 16, 2025, order. This document will provide Apple's detailed response to each allegation.

Following Apple's answer, the case moves into discovery, where both sides exchange evidence. 

This phase typically includes:

• Document production from Apple's internal files.
• Depositions of key Apple executives.
• Expert witness reports on market definition and competitive effects.
• Analysis of Apple's pricing and profit margins

Class certification proceedings will then determine whether the case can proceed as a class action representing all eligible consumers. 

Why This Legal Battle Is Significant 

The Apple iCloud lawsuit challenges technology companies’ ecosystem designs and asks whether artificial restrictions that limit consumer choice violate antitrust laws.

As our digital lives become increasingly intertwined with these platforms, questions about fair competition and consumer rights take on new urgency, and the outcome of this case may well shape how we think about consumer protection in the years to come.