Jun 28, 2024

The Entrapment of Apple 📧

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

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

Briefly...

Kevin Costner Is Pursuing His Western Dream. Will Audiences Follow? – I mean, first and foremost, how do you not use "He Built It, Will They Come?" as the title here? Second, this story is fascinating on a number of levels. The self-financing. The fact that he's done this before and it paid off, literally, in Dances with Wolves. That he bailed on TV's top show to go down this path. The two movies back-to-back. The parallels with what Francis Ford Coppola is also trying to do with Megalopolis. Ovations at Cannes aside, the reviews/tracking are pretty poor here too. Can Costner (and Coppola) pull it off?

In a Surprise, OpenAI Is Selling More of Its AI Models Than Microsoft Is (💰) – Some customers, it seems, want to "go direct" to work with OpenAI rather than with Microsoft reselling OpenAI. This makes sense but it also is clearly going to be yet another point of tension between the two sides. Especially if some employees at Microsoft truly feel like they're becoming "IT for OpenAI" (💰)...

I Wore Meta Ray-Bans in Montreal to Test Their AI Translation Skills. It Did Not Go Well – While Kate Knibbs, like many, is a fan of the sunglasses overall, her travel experience trying to use the new AI translation on the glasses wasn't great. Which continues a not great trend. I really wish we could stop over-promising and under-delivering here. Just ship stuff that's ready to roll!

⭕️ The Inner Ring ⭕️

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

Alexa had all the early mindshare and that has held her (and Amazon) back...

Enter The Inner Ring

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?...

Quickly...

NBC pushing an AI version of Al Michaels for Olympics commentary sounds equal parts strange and fun, but mainly I'm upset they didn't use the obvious "AI Michaels" moniker...
- Meanwhile, AI is trying, and mostly failing, to get better at humor...
Amazon joins the $2T club – far later than I would have guessed, but naturally it seems fueled by more and more leaks about their AI narrative...
- Such as seemingly random stories about how they're using AI to manage their own financial teams?
A look back at investing in Cisco from 2021 may be interesting/useful in the current AI investment boom – even great companies sometimes get bid up far ahead of their skis...
- NVIDIA is up 591,078% since its IPO – but it has fallen 50% or more three times in that span as well.
Sony, sadly, seems to be pulling back fast from PSVR 2...
Fresh turmoil at Xitter, can you believe it?
- Can you believe there's a verified user bot problem?
AI in the workplace often requires quite a bit of cleansing/sorting of the data going into the system, which is obvious, but not often talked about...
Motorola's new Razr flip phones look... pretty great! Almost colorful iPod-like. Apple clearly has to get into this space eventually...
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?
- In other AI in China news, OpenAI has now blocked access from within the country, creating a vacuum for developers there...
- The FT interview with Zhang Hongjiang on the general topic is interesting...
In the opposite direction, TikTok is working on contingency plans for advertisers if the product is banned in the US – the mere risk of which is already have a chilling effect, as predicted...