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DMA is a not a privacy-oriented law.
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But Apple’s excuse not to comply with it is privacy-related.
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How does that reflect poorly (or positively) on their privacy chops? The dispute is about a competition law, a law Apple is complying with by withholding this feature.
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> If Apple is so pro-privacy like they claim, then they'd look for the most strict international privacy laws and abide by them. Then they could feel safe in knowing they could release the product anywhere.

Those are not equivalent statements. You're assuming that privacy is a one-dimensional quantity, so that anything that complies with "the strictest international privacy laws" automatically also complies with any other privacy laws. But this is not actually true. It can easily be the case that every national law allows some set of behavior (different sets for different legal systems), at the same time that the intersection of all those sets is empty.

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DMA is about competition, not privacy. Apple weren’t requesting a GDPR waiver.
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Apple's concern is at the intersection of DMA and privacy. Apple is worried that other parties having the same level of data access that Apple has today would create privacy issues. This is because Apple's current privacy posture is "Trust Apple with your data" rather than "Trust no one with your data - including Apple", but that would be less profitable, but would have prevented the request for an exception because Apple would be on an equal footing with everyone else, if all they could see was client-encrypted data indistinguishable from random bytes.
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> This is because Apple's current privacy posture is "Trust Apple with your data" rather than "Trust no one with your data - including Apple"

I think that's uncharitable. Apple prefers not to have the data either, hence the preference for on-device processing.

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> Apple is worried that other parties having the same level of access that Apple has today would create privacy issues

But this is solvable. The problem is the work it takes to solve it isn’t worth the hit to time to market. (And possibly even the cost.)

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So Apple doesn't want to compete? Cry me a river.

I could almost feel sympathy if it were something to do with some contract that Apple signed with their AI provider. Who's that, Google?

Ahh, a "competitor"? Yeah... cry me a river.

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