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Apple Technology

EU Competition Commissioner Says Apple's Decision To Pull AI From EU Shows Anticompetitive Behavior (euractiv.com) 149

Posted by msmash from the tussle-continues dept.
Apple's decision not to launch its own AI features in the EU is a "stunning declaration" of its anticompetitive behavior, European Commission Vice-President Margrethe Vestager said. From a report: About two weeks ago, Apple announced it will not launch its homegrown AI features in the EU, saying that interoperability required by the EU's Digital Markets Act (DMA) could hurt user privacy and security. A few days later, the Commission accused Apple's App Store of DMA breaches. Apple's move to roll back its AI plans in Europe is the most "stunning, open declaration that they know 100% that this is another way of disabling competition where they have a stronghold already," Vestager, the Commission's vice president for a Europe fit for the digital age and Commissioner for Competition, told a Forum Europa event.

The "short version of the DMA [Digital Markets Act]" is that to operate in Europe, companies have to be open for competition, said Vestager. The DMA foresees fines of up to 10% of annual revenue, which in Apple's case could be over $32.2 billion, based on its previous financial performance. For repeated infringements, that percentage could double.
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EU Competition Commissioner Says Apple's Decision To Pull AI From EU Shows Anticompetitive Behavior More

EU Competition Commissioner Says Apple's Decision To Pull AI From EU Shows Anticompetitive Behavior

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  • Stunning (Score:5, Insightful)

    by Mass Overkiller ( 1999306 ) on Monday July 01, 2024 @09:11AM (#64592033)
    Apple may not have been thinking of pulling out of the EU, because they generate a decent amount of revenue there. But if this is true, and they face a $32 billion dollar fine (which I believe would be the largest ever) then suddenly pulling out of the EU makes economic sense.

    • They will only face a fine of that magnitude, or any fine at all, if they break the law.

      • Re:Stunning (Score:4, Insightful)

        by Tailhook ( 98486 ) on Monday July 01, 2024 @09:39AM (#64592125)

        They will only face a fine of that magnitude, or any fine at all, if they break the law.

        The EU enjoys treating US big tech (for whom I have zero sympathy,) as a big piñata full of money. Apple understands that they will be found guilty regardless of what they do or don't do. Case in point: they're intent is to not "compete" at all by forgoing the EU market: yet that is somehow "anti-competitive."

        If it were left the the EU, the Internet wouldn't exist. The place is fundamentally incompatible with an open network.

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          The EU expects platforms to be open to competing AI systems, just like on Android you have a choice of which assistant app you want to use.

          Apple has decided to simply not enable the APIs for it on European devices, because they don't want to open them up. The EU isn't dumb, it can see that Apple is doing it to prevent other companies that are well ahead of them getting a foothold on the market.

      • Re: (Score:2, Insightful)

        by Ol Olsoc ( 1175323 )

        They will only face a fine of that magnitude, or any fine at all, if they break the law.

        Or leave. This is a big win for the EU. Let others see what Apple did, and remove their offending products from the EU.

        Next up, since the EU has declared Microsoft's bundling of Teams with the OS as somehow anticompetitive and wants money, Microsoft could follow Apple's lead and make Teams use in the EU unallowable.

        I catch a lot of crap for my disdain for the extortion model the EU has been using, demanding billions of dollars for inconsequential things like what comes bundled with the OS. Just because

        • Re: (Score:2, Troll)

          by r1348 ( 2567295 )

          There's the door, don't let it hit your ass on the way out.

          • Yeah, let's let all those alternative phone operating systems designed in the creative depths of the European Union have a better chance. Oh... wait...

            • Yeah, let's let all those alternative phone operating systems designed in the creative depths of the European Union have a better chance. Oh... wait...

              As well, the fact that the software produced in teh EU is the best that has ever..... oh hell, I can't even finish that. ;^)

        • Re: (Score:2)

          by ls671 ( 1122017 )

          Or leave. This is a big win for the EU. Let others see what Apple did, and remove their offending products from the EU.

          Exactly why are EU and others complaining still? They should simply say "good riddance". Some always complain whatever you do.

          • Or leave. This is a big win for the EU. Let others see what Apple did, and remove their offending products from the EU.

            Exactly why are EU and others complaining still? They should simply say "good riddance". Some always complain whatever you do.

            Mostly because they want the money. They found the limits - at least for Apple. The business of extortion - and that is exactly what this is - does tend to find a line in the sand where the person or group decides "no more".

            In Europe, in addition to the extortion culture, they also largely believe that there should not be profits - that profit is obscene. You can see that in the apologists posting here.

      • Re: Stunning (Score:2, Insightful)

        by RazorSharp ( 1418697 )

        The law was crafted specifically to extract money out of big American tech companies. It might as well be a tariff.

        • As I have said before here, time for Congress to retaliate. Maybe 10x the annual global revenue of all EU-based companies making over $100 billion. (Hmm are there any?). In that case maybe 10x the annual revenue across EU companies in all parallel universes as well.

      • They break the law by existing. The EU is out to get any and every successful US company. And I say that despite my intense dislike of Apple.

    • Re: (Score:2, Insightful)

      by AmiMoJo ( 196126 )

      Not really, they would still have to pay the fine. If they tried to remove all their assets from Europe to avoid it, they would be prevented from doing so. Assets frozen and seized.

      • Re: (Score:2)

        by Rei ( 128717 )

        That's only applicable if you're actually fined. Apple has not been fined $32 billion dollars. That's the theoretical max fine (per year) if they were to violate the DMA. Hence, the desire to avoid risking violating the DMA.

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          So the suggestion is to pull out of Europe, responsible for 25% of global revenue, in case they decide to ignore legal advice and piss off the EU so much that they get the maximum fine possible?

          Seems like a better business plan would be to simply comply with the rules.

          Pulling out would probably cost them more anyway. As well as the lost revenue, they will have big employment liabilities, fixed term rental contracts, on-going warranty liabilities etc. Because Apple is both a manufacturer and a vendor, they a

          • They're (Apple) not pulling out of the EU. They are simply not going to offer AI services in the EU in their current proposed model. This is likely only a temporary stop gap measure until they can find a way that doesn't run afoul of the Digital Markets Act.

            • If they do pull their AI, would anything of value be really lost? I doubt it would be.

              • > If they do pull their AI, would anything of value be really lost? I doubt it would be.

                Considering it doesn't really even exist yet, the answer is an obvious "no".

                Of course, the EU could sue them for announcing a product and then not shipping it.

              • Re: (Score:2)

                by Hadlock ( 143607 )

                The current value of AI is business automation like processing emails and analyzing financial PDFs. There's some very minor value in being able to turn on and off your lights with voice but Apple isn't doing any of that as far as I know. Maybe the voice activated light stuff with siri. Siri helps sell iphones but "modern" AI is just as good at that as classic siri.

              • If Siri is anything to judge their capabilities by then my answer would be no. But it shouldn't be difficult to create a competitive system allowing for competition to decide which the consumer chooses. I wouldn't hold my breath though. I'd still like to be able to use a real browser on my iPad/iPhone instead an intentionally hobbled safari.

          • The EU only makes up 7% of Apple’s revenue, so not worth risking a 10% fine for.

            • I've got no love for apple, but that's the real issue isn't it. The EU made the fine so ludicrously high, and have shown themselves to be so hard to work with in a regulatory sense, in might actually be cheaper to just... leave.

              Setting those fines based on global revenue was obviously meant as a way to extract far more money than could be gained by only fining based on EU revenue alone, but it may very well be a bridge too far. If I were a leader at a big tech company I'd be seriously questioning if we shou

    • Re: (Score:2, Flamebait)

      by Ol Olsoc ( 1175323 )

      Apple may not have been thinking of pulling out of the EU, because they generate a decent amount of revenue there. But if this is true, and they face a $32 billion dollar fine (which I believe would be the largest ever) then suddenly pulling out of the EU makes economic sense.

      And will achieve the EU objective of protection of its citizens who have loudly complained about everything Apple. The EU should turn this day into a national holiday, having turned the Visigoths away at the gates.

  • I guess Apple is finally going to understand (Score:5, Insightful)

    by Schoenlepel ( 1751646 ) on Monday July 01, 2024 @09:19AM (#64592063)

    The EU is a train currently at full steam, and Apple is standing on its rails expecting it can stop it with malicious compliance tactics. They will soon understand this does not work with the EU.

    You see, Eurepean courts don't just use a literal interpretation of the law, contracts, etc. They also interpret how the actions were reasonable. In Apple's case, they were entirely unreasonable. Apple is going to get the EU train rammed through its anus in a very unpleasant way.

    And before people say "Oh, if Apple doesn't like the fine, it'll just leave the EU", I wonder what Apple's shareholders are going to think of that. Apple is not going to just dump one of the three markets where it does most of its business.

    • Maybe I misunderstand what just happened here. But it seems that Apple did exactly that. They decided that the EU's marketplace rules are such that they don't want to launch their AI product there. Is the EU going to find Apple for *not* bringing products to market? Will there be a EU regulation that US tech companies have to offer all of the same features in Europe or they will get fined? That seems to be nonsense on the surface but who knows maybe we will see such a regulation.

      • Is the EU going to find Apple for *not* bringing products to market?

        That is what the OP and others have suggested. As if Apple is completely toothless and cannot choose to release government-crippled products in the EU. They can people, and they are already doing this. The question is how butthurt will the courts be that they simply bowed out of their game. The OP seems to think the answer is "very butthurt and vindictive". Big surprise as we are talking about EU courts. The funny thing about courts is that when the defendant has deep pockets, they can keep playing legal ga

      • Re: (Score:2)

        by dgatwood ( 11270 )

        Maybe I misunderstand what just happened here. But it seems that Apple did exactly that. They decided that the EU's marketplace rules are such that they don't want to launch their AI product there. Is the EU going to find Apple for *not* bringing products to market?

        AI is not a product. It's a product feature. They're arbitrarily turning off features, penalizing European purchasers, in retaliation for being forced to comply with local laws. There is no obvious connection between AI features on the device and third-party app stores, except perhaps if some of the work is not truly being done on-device, in which case using those APIs from third-party app store apps could cost Apple money. But if that is the case, then nothing prevents Apple from requiring apps to pay

        • Re: (Score:2)

          by vakuona ( 788200 )

          Or they could argue that they are removing features which do not comply with EU laws.

          Here is an example of something that is legal in one country and not in another. In the UK, it is completely legal for your GPS navigation to tell you where any speed cameras are, while it is certainly illegal in France. Thereofore, (I imagine) Google does not include cameras in French maps. I also doubt the French government could object to Google removing features for French users.

          • Re: (Score:3)

            by dgatwood ( 11270 )

            Or they could argue that they are removing features which do not comply with EU laws.

            Unless I'm missing something *huge*, the only way the AI features can realistically not comply with EU laws would be if they refused to allow other companies to use third-party AI tech, but that's clearly not the case, because other companies are already using third-party AI tech and have been for a long time.

            Now the screen sharing/mirroring feature arguably could be problematic, but only if Apple is refusing to provide APIs for arbitrary companies to support screen sharing/mirroring, which I'm assuming is

            • Re: (Score:2)

              by AmiMoJo ( 196126 )

              On the AI front, Apple doesn't allow other apps to replace certain features that iOS offers. They can't, for example, replace voice prompt detection (hey Siri) or control certain features of the phone. At least not without rooting.

  • ... roll back its AI plans ...

    If anything, this a punishment to Europeans buying Apple iPhones.

    How does a plan to not increase machine (and probably, human) stupidity ^H^H^H^H^H, sorry intelligence, sorry 'intelligence', stop other people increasing whatever, on their not-Apple phone?

  • Correction (Score:5, Interesting)

    by Ol Olsoc ( 1175323 ) on Monday July 01, 2024 @09:27AM (#64592083)
    Apple's decision not to launch its own AI features in the EU is a "stunning declaration" of the EU's pecuniary extraction model.

    Seems as if Apple not allowing something in the EU that the EU considers anticompetitive would make the EU equally happy that whatever it is they are afraid of won't be available there. Why would anyone in the EU care that Apple simply decides not to pay the extortion, and removes it - is this not the same thing? Their citizens have been protected, and they should pat themselves on the back for stopping Apple at the borders.

    Differential analysis - The EU is worried that this is the first shot in what a might be called alternative compliance to their extortionate model. Hopefully other companies will follow - we'll see how Microsoft responds to the EU claim that bundling teams with Windows is anticompetitive. Hopefully, Teams will be excluded to protect the good citizens of the EU, as the citizens of the EU demand.

  • Nice! (Score:3)

    by Rosco P. Coltrane ( 209368 ) on Monday July 01, 2024 @09:33AM (#64592103)

    Now, can the EU get tough with Google and Microsoft too please?

    • Now, can the EU get tough with Google and Microsoft too please?

      At some point, the victims of extortion decide that it isn't worth paying the extortion.

      You might be happy that Microsoft is under the gun now because they bundle Teams with the OS.

      Pull out, and perhaps the EU can make Yandex their official partner - then try fining Vladimir.

    • Now, can the EU get tough with Google and Microsoft too please?

      They literally are. This may shock you but there's more than one person in the EU and they do more than one thing at a time. Also Google has already been found guilty and had the largest fine ever levied against it.

  • Is it anti-competitive? (Score:3)

    by B0mb1tll ( 8539805 ) on Monday July 01, 2024 @09:57AM (#64592183)

    Or is Apple just exercising it's right to do business where it pleases and according to the rules it wishes to abide by?
    BTW, I'm not an Apple fan.

    • It is both. Just because you decide to not launch something in a market doesn't make it less anti-competitive - especially when you cite the competition requirements as a reason for not launching.

  • Apple Intelligence represents perhaps the best example of what their vertical integration allows. If they deploy it in the EU, they can fully expect that the DMA will require that any AI provider will use the law to allow access the same personal contexts that they’re using, and have none of the privacy commitment or design that Apple has obviously engineered in. Frankly if I were Apple I would turn off iCloud, their App Store, and anything else which could be considered vertical integration, then app

    • if I were Apple I would turn off iCloud, their App Store, and anything else which could be considered vertical integration, then append the EU warranty terms that any leaks, loss, or damage caused by 3rd party software is entirely OOW damage.

      One of the many reasons you aren't Apple is that you don't seem to understand that there are laws about what warranty terms you may offer, how you amend contracts, or indeed whether your devices must be fit for advertised purpose in the EU.

  • Serious question:

    What interoperability is the EU talking about? Interoperability with Apple AI or other AI products interoperability with Apple ecosystem?

    • Re: (Score:2)

      by EvilSS ( 557649 )
      I would assume it would mean opening up the 3rd party AI integrations to any AI provider that wants it, similar to what they are requiring access to 3rd party app stores over there. So the same integration OpenAI is getting, and from rumors Anthropic will get in the future and Meta was denied due to privacy concerns.
  • And this is not the first instance of this. A lot of large companies have at least threatened to withdraw products and features if they don't get the laws they like. This is bad. At the same time countries are dreaming up impossible laws like breaking all encryption. This is also bad.

  • So wait.. (Score:3, Insightful)

    by kaatochacha ( 651922 ) on Monday July 01, 2024 @12:17PM (#64592607)
    Am I correct in that Apple is NOT releasing something in the EU because of EU laws, and in turn the EU is using that decision to proclaim that apple is breaking EU laws?
    If so, that's some 1984 level doubleplusgood speak there.

    • Re:So wait.. (Score:4, Interesting)

      by Gibgezr ( 2025238 ) on Monday July 01, 2024 @01:01PM (#64592725)

      No. The EU asked for interoperability, and Apple decided their new AI features violate that interoperability rule, so they aren't releasing their AI features at this time in Europe. The fine would be if they DID release the features and were found to be not interoperable.
      Despite what half the folks here seem to be claiming, the EU is not "mad" that Apple is not releasing these features. They are, with a grin, pointing out that Apple's actions are malicious compliance that clearly tells everyone that their new AI stuff is anti-competitive by design. The EU long ago decided that the biggest tech companies are very anti-competitive and have an unfair advantage in the marketplace, and have chosen interoperability as something they will use to fight this ongoing stagnation of business practices via vendor lock-in.
      And hey, look, it's started working.

    • No, the EU is saying that Apple's decision not to release in the EU is an admission by Apple that their product is anticompetitive

  • By apple not having there “ai” built in it leaves competitors able to fill the gap instead of just relying on the defaults as apple users tend to do.

  • EU: You're implementing features in ways that we don't like! If you don't do it our way, we'll fine you for being anti-competitive!

    Apple: Got it. In that case, we won't be implementing our latest whiz-bang features in the EU. Other companies can just fill the void by competing against each other in that market, and we won't interfere.

    EU: Your decision to not implement your version of those features in the EU is proof that you're anti-competitive! We're going to fine you!

    Apple: (eyes bulging in exasperation.

  • Or are they ok with flagrant illegal scraping of data by AI engines?

  • WTF? (Score:2)

    by sconeu ( 64226 )

    Apple: "We have chosen not to offer product X in the EU"
    EU: That's anticompetive!

    WTF? How is not competing anticompetitive behavior. I guess they're going by the literal definition "anticompetitive = not competing"?

  • What am I missing here? How can a company be guilty of anticompetitive behavior for not offering a product?!?

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