Spyglass - The Entrapment of Apple

The Entrapment of Apple

The EU would like Apple to roll out their products, just not their version of their products

By M.G. Siegler • 28 Jun 2024

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With all the talk about how the EU believes Apple is anticompetitive, it never occurred to me to read it more literally. By announcing the would not be shipping their 'Apple Intelligence' tools in the EU, Apple is choosing to not compete in AI in the region. That is anticompetitive. I guess?

Margrethe Vestager was asked about Apple's maneuver at an event:

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.

I know she's nearing the end of her tenure, but it's perhaps worth asking now if Vestager knows what competition is. Or how it works? Apple's move is a risky one simply because their customer base in Europe could choose to switch to a competing product that offers AI functionality. But Vestager seems to believe that the customer base will stick with Apple, no matter what, and AI will suffer as a result. I mean, maybe? But I'm not sure how it's a regulator's job to force a company to roll out features to ensure they compete with rivals. Feels weird.

But that seems to be just what the EU thinks it can do with the DMA. And the reality is that they might be able to do anything they want with the DMA because they wrote it. And they wrote it vaguely, perhaps for things like this.

But if Apple rolls out 'Apple Intelligence' in the EU they will almost certainly get at least the threat of a fine under the DMA. So this is sort of entrapment?

The reality, of course, is that the EU wants the cake and to eat it too. They want Apple to roll out all of their features to their region, but only in the way the EU sees fit. Undoubtedly that would mean an 'Apple Intelligence' that was open to all. Both in terms of integrations beyond ChatGPT – like, say, a nice French AI startup – but also perhaps an 'Apple Intelligence' that would also work on other devices not made by Apple. Why would Apple do that?

For its part, Apple must know what pressure such an "anticompetitive" (EU definition) move would put on the regulating body. And Vestager's comments seems to be a clear indication of that. You can't just not ship a feature, Apple. That's not only anticompetitive, it's antisocial!

This all continues to creep closer to the once unthinkable: that Apple pulls out of the EU entirely. But two big dates loom that should decide where this goes next. The first is the end of Vestager's tenure, as mentioned. The other is the US election. Both will happen around the same time: early November.

🌍

Sent from London, England

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⭕️ The Inner Ring ⭕️

The following are the columns sent to paid Spyglass subscribers this week – sign up here for full access and future emails...

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Quotable...

"It is now the trustbusters who are trying to move fast and break things."

-- The Economist, pointing out just how fast regulation has come to look into the AI market, both in the US and EU.

Some Thoughts On...

🌳 Meta and Apple decidedly not sitting in a tree...

🏦 Apple getting some cold feet in banking?...

🎭 The roles actors take in the age of Netflix...

📺 The surge of ad tiers in streaming...

🔪 Are 'Copilot+ PCs' really MacBook Air-killers?...

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Sony, sadly, seems to be pulling back fast from PSVR 2...
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No surprise that Apple is talking to AI partners in China, though there's a tidbit in here that the company looked into approval for their own LLM and found that was unlikely – which may have further cemented the partnership strategy they ultimately went with?
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