Apple has made a strategic decision to keep its new Apple Intelligence AI technologies out of iPhone units being sold in the European Union (EU). This move is in response to concerns that certain AI features coming with the iOS 18 update could potentially violate privacy regulations outlined in the EC’s Digital Market Act (DMA). The tech giant is wary of facing hefty fines, amounting to as much as 10% of its $383 billion global revenue for fiscal 2023, if found non-compliant.

European Commissioner for Competition, Margrethe Vestager, expressed displeasure at Apple’s choice during a recent Q&A session. She criticized Apple for withholding AI features in the EU, suggesting that this decision may be linked to avoiding competition scrutiny under the DMA. Vestager’s remarks underscore the ongoing tension between tech giants and regulatory bodies over fair market practices and consumer protection.

The European Commission recently signaled its disapproval of Apple’s App Store rules, citing concerns that they inhibit app developers from directing consumers to alternative distribution channels. Additionally, a new non-compliance procedure has been initiated against Apple regarding contractual obligations for third-party developers and app stores. These developments reflect growing regulatory scrutiny within the EU’s digital landscape.

While withholding Apple Intelligence from models like the iPhone 15 Pro series in the EU may impact sales, iPhone users can still expect non-AI updates like customizable home screen app icons with iOS 18. Looking ahead, there remains hope for a resolution that allows Apple to introduce its AI features in compliance with EU regulations. This outcome would likely involve concessions from both parties to strike a balance between innovation and regulatory requirements. Stay tuned for further developments on this evolving issue.