In a recent move, Apple has announced that it will not be rolling out its highly anticipated Apple Intelligence AI product and three other new features to customers in the European Union (EU). The decision comes as a result of privacy concerns stemming from the EU's Digital Markets Act (DMA) regulation.

The DMA, aimed at promoting competition and curbing the "gatekeeper" effect of major tech companies, including Apple, requires services to be interoperable across platforms. Apple expressed its belief that complying with the interoperability requirements of the DMA could compromise the integrity of its products, posing risks to user privacy and data security.

The features affected by this decision include the flagship "Apple Intelligence" AI product, iPhone Mirroring, and enhancements to the SharePlay screen-sharing feature. The loss of Apple Intelligence is particularly notable, as it offers a range of capabilities such as proofreading, rewriting, creating custom emojis called Genmoji, message searching, call summarization, transcription, and priority notifications. Additionally, Apple recently announced a partnership with OpenAI and plans to expand its AI offerings.

The DMA, which was passed by the EU in 2023, aims to address concerns that major tech giants like Apple, Amazon, Alphabet, Meta, Microsoft, and TikTok's parent company, ByteDance, were exerting excessive control in the market and impeding competition for smaller firms. The regulation mandates basic functionalities to work across competing devices and ecosystems, with iPhones, iPads, and Macs all falling under its purview due to the iPhone Mirroring feature.

Apple's decision to delay the release of these features in the EU may disappoint consumers who were eagerly anticipating their arrival. However, the company expressed its commitment to working with the EU to find a solution that would enable the delivery of these features without compromising user safety.

In terms of financial implications, Europe accounted for nearly a quarter of Apple's net sales in 2023, amounting to $94.3 billion. Furthermore, Apple Intelligence will also not be available in Greater China, which contributed $72.6 billion to the company's 2023 sales.

Shares of Apple remained relatively flat following the announcement. It remains to be seen how negotiations between Apple and the EU unfold, as both parties seek to find a mutually acceptable resolution that ensures privacy while maintaining competition in the market.