Yes, they can do that. So can Microsoft with Windows. So can Google with Android. Will any of them do that? Hopefully not, at the very least. Will all of them do that? Probably not- there's money to be made being the last company standing that actively protects privacy.
For the same reason Apple removed VPN apps from the Chinese iOS app store and multiple news organisations. Because they feel that the money from China is worth obeying oppressive regimes. I really don't think the backlash would be any worse.