Apple’s Rough Week in the EU: AI Launch Delayed, App Store Under Fire
Apple has had a challenging week in the EU. On Friday, the tech giant announced a delay in the highly anticipated roll-out of its AI suite due to regulatory issues. Today, the European Commission flagged Apple’s App Store for violating the bloc’s stringent online competition rules.
AI Suite on Pause The Cupertino-based company, designated as a “gatekeeper” under the EU’s Digital Markets Act (DMA), is grappling with the act’s key provisions. The DMA aims to foster fair competition by banning anti-steering practices, which prevent consumers from uninstalling pre-installed apps and replacing them with third-party alternatives. Additionally, it ensures business users can direct consumers outside the gatekeeper’s ecosystem.
App Store Violations The EU Commission announced today that Apple’s App Store still restricts app developers from freely guiding consumers to alternative options. This breach has prompted a preliminary investigation into Apple’s compliance with the DMA. Furthermore, a new probe is underway concerning Apple’s recent contractual terms for third-party app developers, including a controversial “Core Technology Fee” of €0.50 per installed app.
EU’s Strong Stance Margrethe Vestager, the EU’s competition chief, emphasized the importance of “steering” to reduce developers’ dependence on gatekeeper app stores and make consumers aware of better offers.
Delayed AI Features Meanwhile, Apple is postponing the EU launch of several eagerly awaited product features, citing concerns over the DMA’s interoperability requirements. This delay affects the release of SharePlay Screen Sharing, iPhone Mirroring, and Apple Intelligence — the company’s AI suite powered by OpenAI, offering services like image generation, text summarization, and an upgraded Siri.
Apple expressed in an email statement that the DMA’s interoperability rules could compromise product integrity, risking user privacy and data security. However, the company remains committed to working with the EU on a common solution.
Potential Penalties Beyond these hurdles, Apple faces a potential €1.8 billion fine for unfair competition practices in music streaming under the DMA. Violations of the DMA can lead to fines of up to 10% of a company’s global turnover, with the possibility of doubling for repeated breaches.
In Summary Apple’s recent struggles in the EU highlight the impact of the Digital Markets Act on major tech companies. The delay of AI features and the scrutiny of the App Store signal significant challenges ahead as Apple navigates these stringent regulations while striving to maintain its market position and product integrity
