Apple Faces EU Antitrust Charges Over App Store Practices Amidst AI Launch Delays

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Apple Faces Significant Setback with EU's Crackdown on App Store

Apple is the initial major technology firm to face accusations of violating the European Union's recent regulations on digital markets. This development comes just three days after the corporation announced its decision against launching artificial intelligence within the union, citing regulatory challenges.

On Monday, the European Commission accused Apple’s App Store of blocking developers from reaching out directly to their customers and offering them promotions, a tactic referred to as anti-steering.

"In an initial statement, Margrethe Vestager, who oversees competition policy for the European Union, mentioned that Apple seems to restrict steering. She emphasized that steering is crucial for app developers to reduce their reliance on dominant app store platforms and for enabling consumers to discover more advantageous deals."

On that occasion, Thierry Breton, the European Commissioner for the Internal Market, offered a much harsher critique. "Apple has excessively hindered innovative firms for an extended period, depriving consumers of fresh possibilities and alternatives," he commented.

The European Union described its Monday allegations as "initial conclusions." Apple is now given the chance to address these allegations, and should there be no settlement, the EU possesses the authority to impose penalties that could amount to as much as 10 percent of the company's worldwide revenue—by March 2025 at the latest.

The relationship between Apple and the European Union has been growing increasingly strained. In March, the EU launched a probe into the tech giant for not adhering to its competition regulations. While similar inquiries were initiated against Meta and Alphabet, the parent company of Google, the spotlight in Brussels has predominantly been on Apple's interactions with European app developers.

In March, a negotiator of the Digital Markets Act from the European Parliament pointed out to WIRED that Apple was the most apparent initial focus for the newly established regulations, referring to the company as "easy to target." According to the DMA, it's against the law for major technology firms to favor their own services at the expense of their competitors'.

Developers have expressed intense frustration over the new business conditions enforced by Apple, labeling the company's policies as "oppressive," "coercive," and "excessively harsh."

On Monday, Rob Saunders, a representative for Apple, expressed his belief that the company adheres to legal standards. "Every developer operating within the EU on the App Store can take advantage of the features we've launched, such as directing users from the app to the web for completing purchases at an attractive rate," he stated.

On Friday, Apple announced its decision to delay the launch of its artificial intelligence functionalities in the EU for the remainder of the year, citing "regulatory uncertainties" as the main reason. Saunders, in a statement, expressed concerns that the Digital Markets Act's (DMA) demands for interoperability might necessitate alterations to their products that could endanger user privacy and data security. The postponed features include iPhone Mirroring, improvements to SharePlay Screen Sharing, and Apple's initial venture into generative AI, dubbed Apple Intelligence.

Apple isn't the sole entity attributing its postponement of launching new innovations to recent EU regulations. Previously, Google postponed introducing its ChatGPT competitor, Bard, in the EU, and Meta, earlier in June, halted its efforts to utilize personal data from European Facebook and Instagram users for AI training after engaging with privacy authorities. The firm expressed concern, stating, "This decision hinders the progress of innovation in Europe, stifles competition in AI advancement, and prolongs the wait for Europeans to experience the advantages of AI technology."

Authored by Martin Cizmar

Penned by Mark

Authored by Eric Ravenscraft

By Adrienne So

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