Big Tech Barks, But Will It Bite Back at EU's AI Rules?
Apple and Meta go Eyeball to Eyeball with Regulators
Meta Platforms this week became the second major U.S.-based technology company to announce it would not be rolling out its latest AI update in the European Union due to what it called an “unpredictable” regulatory environment. The Facebook- and Instagram-parent said it would not make its new multimodal Llama model available in the 27-nation bloc, limiting companies and consumers there to its current, text-only model. Last month, Apple announced its recently announced Apple Intelligence tools will not be available on iPhones sold in the EU over similar concerns.
Although Meta and Apple used nearly identical language in announcing their plans each seems focused on different sets of rules, illustrating the increasingly complex and often overlapping constellation of laws and regulations that could affect the deployment of AI tools in the EU, particularly for U.S.-based companies. Apple cited last year’s Digital Markets Act (DMA) as its main source of concern while Meta seems more concerned with the EU’s General Data Protection Regulation (GDPR).
This week, the EU formally designated Apple (along with Meta) as one of six “gatekeepers” under the DMA, subjecting it to rules requiring it to provide greater choice in applications and services to businesses and consumers using its platform or face serious financial penalties. Apple said the rules could compromise users’ security and privacy.
“Specifically, we are concerned that the interoperability requirements of the DMA could force us to compromise the integrity of our products in ways that risk user privacy and data security,” Apple said in announcing its decision to block access to Apple Intelligence out of Europe.
Meta said it is concerned that the latest version of Llama may not comply with the GDPR because it was trained in part on data from Meta’s users without consent. The Facebook parent has been ordered by Ireland’s Data Protection Commission, which oversees Meta’s compliance with GDPR, to stop training its AI models on Facebook users’ posts while the practice is under review. While that process is still ongoing, Meta is concerned that other countries’ data-protection authorities could still seek to penalize it if it rolls out the multimodal version of Llama.
Meta said this week that it is also suspending the use of its generative AI tools in Brazil due to concerns over new data protection rules in that South American country.
For all their tough talk, however, it’s unclear how long Apple and Meta are preparted to stick with the EU boycotts. With nearly 450 million inhabitants, the 27-member EU comprises the world’s second largest economy by GDP behind the United States, representing roughly one-sixth of the total global economy. Not only do Apple and Meta risk losing revenue by withholding their latest and greatest, they risk alienating tens or hundreds of millions of existing customers there.
The two U.S. tech giants may be betting the regulators will eventually back down and agree not to take action against them in the interests of insuring businesses and consumers in the EU keep pace with the rest of the world in adopting AI technology. But the European Commission has shown itself to be not particularly susceptible to such strong-arm tactics in the past.
The EU also just reelected its president, Ursula von der Leyen, to another five-year term. Von der Leyen has been a strong supporter of the DMA and the related Digital Services Act, both of which were enacted on her watch, and she championed the recently passed AI Act.
It would be out of character for von der Leyen to back down from some of her signature accomplishments, although the decision would not be in her hands alone. If other major tech companies were follow Apple and Meta in delaying or blocking the rollout of their newest AI tools and features in Europe internal pressure from businesses and political pressure from consumers could force the Commission’s hand.
Either way, the showdown will be closely watched by many in the music and publishing industries who view competition and consumer protection laws as perhaps the most direct path to reigning in the tech companies while the courts grind slowly through the copyright issues surrounding generative AI.
Both the U.S. Justice Department and the Federal Trade Commission have likewise moved aggressively to put antitrust and fair competition laws front-and-center in regulating AI companies’ interactions with other industries, including the media & entertainment industries. Many U.S. lawmakers also increasingly view the EU rules as offering potential templates for legislation here aimed at placing guardrails around the rapid development and deployment of AI.
In any case, we’re into Act II of the drama over the EU and AI. A gun has been introduced. And as the dramatist Anton Chekov famously said, "If in the first act you have hung a pistol on the wall, then in the following one it should be fired. Otherwise don't put it there."