Brazil Investigates Meta Over WhatsApp AI Restrictions

The Conselho Administrativo de Defesa Econômica (Cade) has opened an administrative inquiry against Meta to investigate suspicions of abuse of dominant position. This action follows recent changes to WhatsApp's policies that restrict the use of third-party artificial intelligence tools. Specifically, the new terms prevent services like ChatGPT and Copilot from functioning within the application.

While external AI tools are being blocked, Meta continues to integrate its own AI solution, Meta AI, across WhatsApp, Instagram, and Facebook. Cade identified evidence of anti-competitive practices related to these new WhatsApp Business Solution Terms. Consequently, the agency's Superintendence-General determined a preventive measure to suspend the enforcement of these terms. This suspension remains in effect until Cade can fully evaluate the alleged infractions against the economic order. A spokesperson for WhatsApp has denied the allegations, claiming the restrictions are necessary to prevent system overloads.

The Conselho Administrativo de Defesa Econômica (Cade) officially announced the inquiry on Monday, January 12. The investigation focuses on Meta and its recent regulatory changes regarding the WhatsApp platform. The central allegation is that Meta is utilizing its market power to exclude competitors from the market.

According to the official statement from Cade, the investigation was triggered by specific changes to the WhatsApp Business Solution Terms. These new regulations were imposed by Meta to control the access and offering of AI technologies by third-party providers to application users. The restrictions effectively rendered popular AI services like ChatGPT and Copilot non-functional within the chat application.

Cade's preliminary findings suggest that these actions constitute anticompetitive practices. The agency noted that these practices have an "excludent effect," meaning they serve to push rivals out of the market. The inquiry aims to determine if these terms violate Brazil's economic order laws by favoring Meta's proprietary AI tools over those of competitors.

In response to the potential harm to market competition, the Superintendência-Geral do Cade (General Superintendence of Cade) moved quickly to implement a preventive measure. This measure dictates the immediate suspension of the application of the new terms identified in the investigation. The suspension is temporary and will remain in place "until the Cade can properly evaluate all indications of infringement to the economic order identified," as stated by the organization.

This action halts Meta's enforcement of the restrictions that blocked third-party AI integrations. It allows time for the regulatory body to conduct a thorough analysis of the WhatsApp Business Solution Terms. The goal is to ensure that Meta does not leverage its ownership of WhatsApp to unfairly disadvantage competing AI technologies while promoting its own, Meta AI.

Following the announcement of the inquiry, a spokesperson for WhatsApp issued a statement rejecting the accusations. The representative asserted that the claims of anti-competitive behavior are "fundamentamente equivocadas" (fundamentally mistaken).

The defense provided by the company centers on technical limitations rather than competitive strategy. The spokesperson explained that the presence of AI chatbots within the WhatsApp Business environment could potentially overload the platform's systems. They argued that the infrastructure was not originally designed to support this specific type of high-volume usage.

Furthermore, Meta offered an alternative perspective on the appropriate channels for AI integration. The spokesperson stated:

"This logic is based on the assumption that WhatsApp would, in some way, be an app store. The appropriate channel for the entry of these AI companies into the market are the app stores themselves, their websites, and partnerships in the industry, and not the WhatsApp Business platform."

This argument suggests that WhatsApp Business should remain a communication channel rather than a distribution platform for third-party AI applications.

The conflict between Brazilian regulators and Meta highlights the growing tension between big tech platforms and competition authorities. As AI integration becomes standard in messaging apps, the line between platform neutrality and proprietary feature development is becoming increasingly blurred. The outcome of Cade's investigation could set a significant precedent for how global tech giants manage third-party access to their platforms in Brazil and potentially other jurisdictions.

Currently, the preventive measure forces Meta to allow third-party AI tools on WhatsApp while the investigation proceeds. The tech giant must now prepare evidence to demonstrate that its restrictions were motivated by technical necessity rather than a desire to suppress competition for its own Meta AI product.