Apple won’t roll out AI tech in EU market over regulatory concerns

By Samuel Stolton and Mark Gurman

Apple Inc. is withholding a raft of new technologies from hundreds of millions of consumers in the European Union, citing concerns posed by the bloc’s regulatory attempts to rein in Big Tech.

The company announced Friday that it would block the release of Apple Intelligence, iPhone Mirroring and SharePlay Screen Sharing from users in the EU this year, because the Digital Markets Act allegedly forces it to downgrade the security of its products and services.

“We are concerned 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,” Apple said in a statement.

The EU’s DMA forces dominant technology platforms to abide by a long list of do’s and don’ts. Tech services are prohibited from favoring their own offerings over those of rivals. They’re barred from combining personal data across their different services; blocked from using information they collect from third-party merchants to compete against them; and have to allow users to download apps from rival platforms.

As part of the rules, the EU has designated six of the biggest tech companies as “gatekeepers” — powerful platforms that require stricter scrutiny. In addition to Apple, that list includes Microsoft Corp., Google parent Alphabet Inc. and Facebook owner Meta Platforms Inc.

“Gatekeepers are welcome to offer their services in Europe, provided that they comply with our rules aimed at ensuring fair competition,” the European Commission said in response to Apple’s plans.

Apple Intelligence — the company’s suite of AI services — was the highlight of its recent Worldwide Developers Conference presentation, which also included updates to the iPhone maker’s operating systems. The technology will help summarize text, create original images and retrieve the most relevant data when users need it. The push also includes a revamped version of Siri, Apple’s once-pioneering digital assistant.

The new features helped spur a rally in Apple shares in recent weeks. The stock has climbed about 9% since the WWDC presentation on June 10, propelling the company’s valuation to more than $3.2 trillion. The shares were up 0.4 per cent to $210.48 as of 2:19 pm in New York on Friday.

Apple’s decision to halt the rollout in the EU will mean consumers in all 27 of the bloc’s nations, including the likes of France, Germany, Spain and Italy, won’t have access to the company’s ambitious new AI technologies for now. The software is due to launch elsewhere this fall, but will only work on a subset of Apple’s devices and just in American English.

It’s not clear how the features might violate the DMA, but withholding the technology threatens to irk consumers in the region — who might potentially put pressure on regulators.

As part of the move, iPhone mirroring and SharePlay Screen Sharing also will be held back. The mirroring feature lets you use your device virtually on your Mac display and have full control over it. The SharePlay capability, meanwhile, lets you screen-share from an iPad or iPhone to another device and control it remotely for technical support.

Apple executives have already locked horns with the EU over attempts to rein in the market power of Big Tech. The company is set to receive a formal warning from EU regulators under the DMA as early as Monday over how it allegedly blocks apps from steering users to cheaper subscription deals on the web — a practice for which it already received a €1.8 billion ($1.9 billion) fine from Brussels regulators earlier this year, under traditional antitrust law.

The Apple Intelligence rollout is facing complications in other parts of the world as well. The company will need a different chatbot provider in China, where partner OpenAI’s ChatGPT is banned. Apple has been considering an arrangement with companies such as Baidu Inc. and Alibaba Group Holding Ltd., Bloomberg has reported.