Apple gets blasted for its decision regarding AI in the EU
A little over a week ago we told you that Apple planned on keeping its new Apple Intelligence AI technologies out of iPhone units being sold in the European Union (EU). Apple is concerned that some of the AI features coming to certain iPhone models with the iOS 18 update could violate privacy regulations written into the EC's Digital Market Act (DMA). Considering that such a violation could lead to a fine of as much as 10% of Apple's $383 billion in global revenue for fiscal 2023, the tech giant would prefer to play it safe.
Apple's decision has angered Margrethe Vestager, the European Commissioner for Competition, who said in a response to a question poised in a Q&A session, "So Apple have (sic) said that they will not launch their new enabled features in the IRS environment, and they say that they will not do that because of the obligations that they have in Europe. And the obligations that they have in Europe, it is to be open for competition, that is sort of the short version of the DMA. And I find that very interesting, that they say we will now deploy AI where we're not obliged to enable competition. I think that is the most sort of stunning, open declaration that they know 100% that this is another way of disabling competition, where they have a stronghold already."
EC Competition Chief Vestager blasts Apple for holding AI off of iPhone units in the EU|Image credit-EC
In other words, Vestager is accusing Apple of holding back its AI features in the EU because the company knows that Apple Intelligence wouldn't be considered competitive by the EC. What Apple realizes is that if it never brings Apple Intelligence to the EU, its AI features cannot be accused of violating the DMA. Right now, Apple faces a huge fine after the EC announced last week that it made a preliminary ruling against Apple that says the company has violated the DMA due to the App Store.
The European Commission has informed Apple of its preliminary view that its App Store rules are in breach of the Digital Markets Act (DMA), as they prevent app developers from freely steering consumers to alternative channels for offers and content. In addition, the Commission opened a new non-compliance procedure against Apple over concerns that its new contractual requirements for third-party app developers and app stores, including Apple's new Core Technology Fee (CTF), fall short of ensuring effective compliance with Apple's obligations under the DMA-European Commission
Holding Apple Intelligence off the iPhone 15 Pro, iPhone 15 Pro Max, and the iPhone 16 series in the EU is certain to hurt iPhone sales in the region although non-AI changes to iOS 18, such as the ability to customize home screen app icons, will still be available to iPhone users in the EU. The hope is that Apple will eventually be able to add its new AI features to iPhone units in the market although that might require some compromise on the part of the EC and Apple.
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