Apple hit hard by EU rules: AI suite on pause, App Store violations

It’s been a tough few days for Apple in the EU. On Friday, the company announced it would delay the roll-out of its much anticipated AI suite due to regulatory issues. Today, the European Commission warned the tech giant that its App Store is in violation of the bloc’s sweeping online competition rules. 

The Cupertino-based company is among the tech giants (designated as “gatekeepers”) that have to comply with the EU’s landmark law, known as the Digital Markets Act (DMA).

One of the act’s fundamental provisions is the ban of anti-steering for app platforms. This means that consumers have the right not only to uninstall pre-installed apps, but also replace them with third-party alternatives.

At the same time, business users have the right to direct consumers elsewhere, outside of the gatekeeper’s ecosystem.

Today, the EU Commission announced that Apple is violating the rule. The regulator’s preliminary findings determine that the App Store still prevents app developers from “freely steering consumers” to alternative options.

The Commission is also opening another non-compliance investigation into Apple’s new contractual terms for third-party app developers. This includes the tech company’s latest “Core Technology Fee,” which charges €0.50 per installed app.

“Steering is key to ensure that app developers are less dependent on gatekeepers’ app stores and for consumers to be aware of better offers,” EU competition chief Margrethe Vestager said in a statement.

Apple delays launch of AI features in Europe

Meanwhile, Apple is delaying the EU launch of multiple anticipated product features, citing worries over the DMA’s interoperability demands.

This concerns the release of SharePlay Screen Sharing, iPhone Mirroring, and Apple Intelligence — the company’s AI suite. Powered by OpenAI’s technology, the services will include image generation, text summarisation, and a revamped version of Siri.

In an email statement to a number of media outlets, Apple said that the DMA’s interoperability rules “could force us to compromise the integrity of our products in ways that risk user privacy and data security.”

Nevertheless, the company expressed its commitment to work on a common solution with the EU.

Beyond dealing with a potential blow to its sales in the bloc, Apple is also facing a €1.8bn fine for unfair competition practices in music streaming — under the scope of the DMA.

For any rule violation, the law can impose fines of up to 10% of a company’s total worldwide turnover. The amount can increase up to 20% in case of repeated breaches.