Report from Wall Street Journal
In Brief – The European Commission has informed Meta that it plans to block the company’s ban on third-party AI chatbots from operating over WhatsApp. The antitrust regulator has reached a preliminary finding that Meta’s policy could unlawfully leverage its dominant position in messaging apps to gain an unfair advantage in emerging AI chatbot markets. Competition Commissioner Teresa Ribera said swift action is needed because AI markets are evolving rapidly and the WhatsApp policy could cause lasting harm to AI chatbot competition in Europe. The interim measures would require Meta to maintain third-party AI assistants’ access to WhatsApp’s Business API under the terms that existed before the company announced changes to the WhatsApp Business Solution Terms in October that effectively banned general-purpose third-party AI chatbots assistants starting in January. Meta has repeatedly rejected arguments that WhatsApp’s Business API is a key distribution channel for AI chatbots, noting that consumers have many alternative ways to access them.
Context – Regulators who are sympathetic to chatbot operator complaints highlight WhatsApp’s strong position in the market for messaging apps, while Meta argues that its chatbots hold very small shares of the AI chatbot market. For example, Chat-GPT has approximately an 80% market share in the EU and it is even higher in Brazil, while Meta’s chatbots market shares barely register. The European Commission was the first regulator to act, opening an antitrust investigation in early December. In late December, the Italian competition watchdog ordered Meta to suspend their policy in Italy while it carried out an antitrust investigation. In mid-January the Brazilian regulator did the same. In Brazil, a court quickly overturned the regulator’s order. In Italy, Meta announced that it will charge AI companies a per message fee for running their chatbots on WhatsApp in regions where regulators force the company to allow chatbots. WhatsApp currently charges companies for using its API for various template responses to customers.