Apple gets blasted for its decision regarding AI in the EU
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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.
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. Apple realizes 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. However, 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.
“However, 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.”
Questions & Answers
Q.Why is Apple not releasing its new AI technologies in the EU?
Why is Apple not releasing its new AI technologies in the EU?
Apple is concerned its new AI features could violate privacy regulations within the EC’s Digital Market Act. The company prefers to play it safe to avoid potential large fines related to non-compliance.
Q.What is the potential financial penalty for Apple if it violates the Digital Market Act?
What is the potential financial penalty for Apple if it violates the Digital Market Act?
A violation of the DMA could lead to a fine of as much as 10% of Apple’s global revenue for fiscal 2023. This figure was $383 billion for that period.
Q.What is Margrethe Vestager's opinion on Apple's decision regarding AI in the EU?
What is Margrethe Vestager's opinion on Apple's decision regarding AI in the EU?
Margrethe Vestager believes Apple's decision is a way of disabling competition where it already has a stronghold. She finds it 'stunning' that they avoid deploying AI where competition is obliged.
Q.What other issues is Apple currently facing regarding the Digital Market Act?
What other issues is Apple currently facing regarding the Digital Market Act?
The European Commission has made a preliminary ruling that Apple's App Store rules violate the DMA by preventing developers from steering consumers to alternative channels. A new non-compliance procedure has also opened.
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