Apple has said that it will not be releasing three newly announced features in the European Union in 2024, including its flagship AI product, “Apple Intelligence,” because of “regulatory uncertainty” resulting from the bloc’s antitrust laws pertaining to the DMA.
TakeAway Points:
- Apple will not roll out its Apple Intelligence AI product and three other new features to the European Union when it releases them later in 2024, the company said, due to privacy concerns stemming from the Digital Markets Act.
- The DMA requires that services be interoperable across platforms, to promote competition and stymie the “gatekeeper” effect that some large companies, including Apple, have.
- Apple said it would work with the EU to come up with a solution to allow the rollout of the new products.
Apple not Launching in EU
On Friday, Apple said it won’t release three recently announced features, including its flagship “Apple Intelligence” AI product, in the European Union in 2024 due to “regulatory uncertainties” stemming from the bloc’s Digital Markets Act antitrust regulation.
Apple said in a statement that the features — Apple Intelligence, iPhone Mirroring, and enhancements to its SharePlay screen-sharing product — won’t be available to EU customers due to Apple’s belief “that the interoperability requirements of the DMA could force us to compromise the integrity of our products in ways that risk user privacy and data security.”
The EU passed the DMA in 2023, spurred by concerns that a handful of major technology companies such as Amazon, Apple, Alphabet, Meta, Microsoft and TikTok parent ByteDance were acting as “gatekeepers” in preventing smaller firms from competing. Among other things, DMA requires that basic functionalities work across competing devices and ecosystems.
The interoperability requirements apply to iPhones and iPads. But Macs are affected by the DMA because iPhone mirroring allows users to replicate the screen of an iPhone on the screen of a Mac.
The loss of the company’s AI product could be a disappointment to consumers. Apple Intelligence can proofread writing or even rewrite it in a friendly or professional tone. It can create a custom emoji called Genmoji, search through an iPhone for specific messages from someone, summarize and translate phone calls and show priority notifications. The company also announced a partnership with OpenAI and a roadmap for other models being added to the platform.
Apple Loses Shares in EU
The company’s shares were largely flat on the news. Apple saw 2023 net sales of $94.3 billion in Europe, just under a quarter of its worldwide net sales. Apple Intelligence also won’t be available in Greater China, which accounted for $72.6 billion of its 2023 sales.
The company said it will work with the European Union “in an attempt to find a solution that would enable us to deliver these features to our EU customers without compromising their safety.”
Earlier, Apple concluded a long-running EU antitrust investigation into its mobile payments system by making a series of concessions, avoiding a potential $40 billion fine. This settlement would help Apple avoid sanctions such as a fine of up to 10% of the company’s total worldwide annual turnover. With Apple’s revenues reaching $383 billion in 2023, this could have meant a fine of approximately $40 billion.