Meta Faces EU Antitrust Heat as Italy Orders WhatsApp to Host Rival AI
Italy's competition authority issues a precautionary order against Meta's AI integration on WhatsApp, signaling a broader European battle over market dominance in artificial intelligence.
Meta Platforms Inc. (META) is facing a significant regulatory challenge to its burgeoning artificial intelligence strategy after Italy’s competition authority ordered the company to stop excluding rival AI chatbots from its dominant WhatsApp messaging platform.
The order, disclosed Tuesday by the Italian Competition Authority (AGCM), is a precautionary measure that strikes at the heart of Meta's ambition to deeply integrate its own AI assistants across its ecosystem. Despite the pointed regulatory action, shares of the $1.66 trillion technology giant were largely unfazed, climbing a modest 0.5% to $664.94 in a recent session, suggesting investors are taking a wait-and-see approach to the escalating European scrutiny.
The Italian regulator has mandated that Meta suspend any contractual terms that prevent third-party AI chatbot providers from reaching users on WhatsApp. The move is part of a wider investigation launched in July 2025 into whether Meta is abusing its formidable market position. The AGCM is scrutinizing how Meta allegedly pre-installed its "Meta AI" service within WhatsApp and whether it unfairly limits access for competing AI developers, potentially stifling consumer choice.
"The proceeding is aimed at ascertaining the alleged abuse of a dominant position by Meta," the AGCM stated in a press release, highlighting concerns that such conduct could "replicate and strengthen Meta's dominance in the digital ecosystem."
Meta’s strategy hinges on making its AI assistant a ubiquitous feature across its family of apps—including WhatsApp, Instagram, and Facebook Messenger—which serve billions of users. This integration is seen by analysts as a critical pathway for future growth and monetization, particularly as the company competes with AI offerings from Google, Microsoft, and Apple.
In response to the order, Meta has pushed back, calling the Italian regulator's decision "fundamentally flawed," according to reports. The company has indicated it is cooperating with authorities but has also noted the technical strain that the proliferation of new AI chatbots places on its systems.
This dispute in Italy is not an isolated event but rather a symptom of broader regulatory pressure across the continent. The European Commission has initiated its own parallel antitrust investigation into Meta’s AI policies on WhatsApp, covering the entire European Economic Area. This dual-front investigation amplifies the risk for Meta and underscores a coordinated effort by European regulators to ensure fair competition in the nascent but rapidly growing AI sector, acting in the spirit of the EU's Digital Markets Act (DMA), which designates WhatsApp as a core "gatekeeper" service.
The muted stock market reaction may reflect Wall Street's continued confidence in Meta's fundamental strength. The company boasts a robust profit margin of nearly 31% and has seen quarterly revenue grow over 26% year-over-year. Analyst sentiment remains overwhelmingly positive, with 60 of 68 analysts covering the stock rating it a 'Buy' or 'Strong Buy' against just eight 'Hold' ratings.
However, the regulatory battle lines are clearly being drawn. The outcome of the AGCM and European Commission investigations could set a crucial precedent for how generative AI is deployed and monetized within closed digital ecosystems. For Meta, a negative ruling could dismantle a key pillar of its growth strategy in Europe, potentially forcing it to redesign its AI integration or face significant fines. For now, investors and competitors alike are watching closely to see if European regulators will force open the gates to one of the world's most valuable digital platforms.