Italy's Competition Watchdog Broadens WhatsApp AI Policy Probe: The Battle Over AI Dominance in Europe
When regulators in Rome announced in late November 2025 that they were expanding their investigation into Meta's WhatsApp practices, few outside the technology and regulatory communities paused to consider what it really meant. But this development signals something far more significant than routine corporate compliance scrutiny. Italy's competition authority has essentially declared war on what it sees as unfair gatekeeping in the artificial intelligence sector, and the implications ripple far beyond a single tech company or messaging app.
The story begins with a fundamental question about power in the digital age: When a company controls one of the world's most essential communication platforms, how far can it go in using that dominance to advantage its own products in emerging markets like artificial intelligence? The Italian regulators think Meta has crossed the line, and they're prepared to make it costly.
Understanding the Investigation: What Changed in November
On November 26, 2025, Italy's antitrust authority—formally known as the Autorità Garante della Concorrenza e del Mercato, or AGCM—made a pivotal announcement. They weren't starting fresh; rather, they were substantially widening an investigation they'd begun back in July. But this expansion represents a meaningful shift in both scope and seriousness.
Here's what matters most: The investigation now scrutinizes not just WhatsApp's general business practices, but two specific and troubling areas. First, the modified contractual terms for WhatsApp Business Solutions introduced in mid-October. Second, the deeper integration of Meta's proprietary artificial intelligence chatbot directly into WhatsApp's core platform. For ordinary users checking their messages, this might seem like nothing special. But for regulators watching competition and market dynamics, it's a red flag.
The Italian authority has gone further still. They've opened a parallel proceeding to examine whether they need to impose urgent interim measures right now—potentially freezing new terms or limiting how aggressively Meta can push its AI tools through WhatsApp while the full investigation continues. The timeline extends to the end of 2026, giving regulators plenty of runway to assemble their case and document their findings.
What makes this expansion particularly telling is the language regulators used. They expressed concern that Meta's conduct could "limit production, market outlets, or technical development" in AI chatbot services "to the detriment of consumers." In regulatory-speak, this is serious business. It suggests Italian authorities believe Meta isn't just behaving competitively—they think the company is actively foreclosing opportunities for rivals.
The October Shock: How Meta Changed the Rules
To understand why Italian regulators became so concerned, you need to look at what happened in October 2025. Meta wasn't subtle about it. The company fundamentally altered the rules governing who could use WhatsApp's business infrastructure.
The new policy is surprisingly straightforward, which makes it all the more damning from a competition perspective. If you're a business whose primary revenue model depends on operating as an artificial intelligence chatbot on WhatsApp, you're effectively blocked from the platform. The restriction applies immediately to new users and extends to existing businesses starting January 15, 2026. For AI companies trying to reach WhatsApp's vast user base—imagine nearly 40 million Italians alone—this represents a serious blow to their growth prospects.
Meta framed this differently, of course. The company's official position holds that WhatsApp's API, the technical interface through which developers interact with the platform, was never designed to host general-purpose AI chatbots. According to Meta's argument, allowing unrestricted AI integration would strain systems, create security problems, and degrade performance for the hundreds of millions of people who rely on WhatsApp daily.
But here's where the competition concern becomes acute. Meta didn't just restrict AI chatbots generically. The company simultaneously integrated its own artificial intelligence assistant directly into WhatsApp. Regular users now encounter Meta's AI tools natively within the messaging app, requiring no special setup or third-party integration. While other AI services face blocking, Meta's own tools enjoy preferred status.
From a business perspective, this is textbook market foreclosure. You control the dominant platform. You exclude competitors from using it. Then you promote your own product within that same platform. Even if each individual decision seems defensible in isolation, the combined effect raises serious competition questions.
The Regulatory Perspective: Why This Matters Beyond Business
When you read Italian regulatory documents, you encounter a specific concern that runs through all their analysis: consumer switching costs. In straightforward terms, this means people hate leaving WhatsApp. The platform has achieved something rare in technology—it's become nearly indispensable for how people communicate. Leaving it means losing touch with virtually your entire social network.
This creates what economists call a "moat." WhatsApp's dominance becomes self-reinforcing. Even if a competitor offered superior service, most people wouldn't switch because everyone they know uses WhatsApp. Meta understands this dynamic intimately, which is precisely why regulators worry about how the company leverages it.
Now layer in artificial intelligence. The AI sector remains genuinely contested. Different companies pursue different approaches. Some focus on particular use cases, others on superior reasoning capability, still others on privacy or efficiency. This competition drives innovation and gives consumers choices. But if Meta can use its WhatsApp dominance to preempt rival AI services from reaching users, that competitive dynamism evaporates.
The AGCM worries specifically about what's called "serious and irreparable" damage to competition. That's regulatory language for situations where harm to the competitive process becomes difficult or impossible to reverse. Once competitors lose the opportunity to build user relationships through WhatsApp, they may lack the resources to recover. Markets don't always automatically rebalance themselves.
Meta's Defense: The Company Fights Back
Meta hasn't remained silent, and the company's defense actually raises legitimate technical points, even if regulators remain unconvinced.
Meta's core argument centers on platform architecture. WhatsApp's infrastructure, the company insists, simply wasn't engineered to support general-purpose AI chatbot services at scale. Allowing thousands of developers to integrate AI tools through the API would create technical strain, security vulnerabilities, and degraded user experience for the platform's core messaging function. This isn't mere excuse-making; it reflects genuine technical reality about how platforms manage third-party integrations.
The company also clarifies what the October change actually restricts. Meta explicitly states that tens of thousands of businesses continue using WhatsApp for customer support. AI assistants can still be deployed to help with customer service inquiries. The restriction targets specifically businesses whose main revenue model is offering AI chatbot services on the WhatsApp platform—a narrower category than blanket AI prohibition.
"We strongly reject these unfounded claims," a WhatsApp spokesperson stated in response to the investigation announcement. The company argues that recent updates "do not affect the tens of thousands of businesses who provide customer support and send relevant updates, or the businesses using the AI assistant of their choice to chat with their customers."
Here's where Meta's position becomes defensible: There is a legitimate distinction between allowing AI customer service tools and hosting independent AI chatbot companies on your infrastructure. Many platforms draw such lines. Apple restricts certain app categories on iOS. Facebook limits how third-party developers can integrate with its platform. The question isn't whether platforms can make rules—they can—but whether the rules employed here constitute anticompetitive abuse rather than reasonable platform governance.
Italian regulators clearly disagree with Meta's framing, viewing the October changes and AI integration strategy as crossing from reasonable governance into anticompetitive conduct. But Meta's defense isn't frivolous, which is why this investigation will likely involve genuine factual disputes about technical capabilities and competitive effects rather than clear-cut violations.
Beyond WhatsApp: The DeepSeek Story and Italy's Broader Privacy Offensive
While the WhatsApp investigation focuses on competition law, a parallel regulatory story demonstrates that Italy's watchdog authorities are operating on multiple fronts. The case of DeepSeek, a Chinese artificial intelligence platform, illustrates how Italian regulators address different AI governance concerns.
Has Italy actually blocked Chinese AI firm DeepSeek over privacy concerns?
Yes. Italy has taken aggressive enforcement action against DeepSeek, making it perhaps the world's strictest regulator concerning this particular Chinese AI service. In January 2025, both Apple and Google removed DeepSeek from their Italian app stores following requests from Italy's data protection authority, known as the Garante. The app became unavailable through normal distribution channels for Italian residents.
So why has Italy banned DeepSeek specifically?
The answer involves serious violations of European privacy law. On January 30, 2025, Italy's Garante issued a definitive ban after concluding that DeepSeek violated the General Data Protection Regulation—the EU's comprehensive privacy framework—in multiple ways. The core issues are striking.
First, DeepSeek failed to appoint an EU representative as required by GDPR Article 27. This seems technical, but it's fundamental: European residents are supposed to know whom they can contact if they have privacy concerns. When a company serves EU residents without appointing a European contact, it's essentially trying to avoid accountability.
Second, and more alarming, DeepSeek stored Italian users' personal data on servers located in China. The Garante determined this created inadequate protection for personal information. European privacy law presumes that data stored outside the EU faces risks that aren't sufficiently addressed through contractual safeguards alone. Chinese data governance operates under different legal frameworks than GDPR, and the Garante wasn't satisfied that Italian residents' information received adequate protection.
Third, DeepSeek's legal justifications for data collection were unclear and insufficient. The company couldn't adequately explain what personal data it collected, why it collected it, or what it did with the information. When regulators ask direct questions about data handling, vague or evasive responses trigger enforcement action. The Garante got exactly that kind of response.
DeepSeek had essentially claimed it didn't operate in Italy—a position that became indefensible when evidence showed the company explicitly marketed services to Italian residents and accepted their usage. This disconnect between claimed non-operation and actual service provision didn't sit well with regulators.
Which specific AI model is Italy's data protection authority asking about regarding personal data use?
Italy's Garante specifically targeted DeepSeek's data processing practices. When the regulator demanded clarification, they wanted detailed answers on fundamental questions: What personal data does DeepSeek collect? Where does that data originate? What purposes justify the collection? What legal basis supports processing? Crucially, is personal data stored on Chinese servers? How does the company handle web scraping and data collection? Are there adequate protections for minors using the platform? Do the algorithms incorporate safeguards preventing discriminatory outcomes?
DeepSeek's responses proved wholly inadequate. Rather than clarify operations, the company seemed to misrepresent its own business model and regulatory obligations. This inadequacy precipitated escalated enforcement.
Is DeepSeek actually blocked from Italian app stores due to data use questions?
DeepSeek disappeared from both Apple and Google app stores in Italy in late January 2025. This happened after the Garante's initial inquiry. While those who had previously downloaded the app could continue using it, new users couldn't obtain it through normal channels. Subsequently, the Garante's January 30 definitive limitation on data processing effectively prevented DeepSeek from continuing to collect or process Italian residents' personal information.
For practical purposes, DeepSeek became unavailable to Italian users. The combination of app store removal and definitive privacy restrictions made the service non-functional for the Italian market.
What These Investigations Mean for the Broader AI Industry
These Italian regulatory actions reveal something crucial about how Europe plans to govern artificial intelligence during this critical expansion period. Italy is essentially saying that AI companies cannot simply leverage market dominance to crush competitors, nor can they disregard European privacy standards by claiming non-operation or storing data in jurisdictions with weaker protections.
For Meta and other large technology companies, the message is unmistakable: European regulators will scrutinize business practices that appear to weaponize existing dominance in service of emerging market control. Antitrust enforcement in the AI sector is becoming serious, with real consequences including potential fines reaching ten percent of worldwide revenue.
For smaller AI companies and startups, the DeepSeek case demonstrates that European regulators expect compliance with GDPR regardless of company size or origin. Attempting to circumvent obligations through legal maneuvering won't succeed. When regulators ask questions, adequate responses matter. When you claim not to operate in a market while demonstrating otherwise, enforcement follows quickly.
For consumers, these actions suggest the regulatory environment is becoming more protective, potentially limiting some AI service options while creating friction for legitimate innovation. But they also signal that policymakers won't permit AI companies to undermine privacy or fair competition in pursuit of market dominance.
Looking Ahead: What Happens Next
The WhatsApp investigation continues through 2026, with interim measures possible at any point. The DeepSeek situation remains essentially resolved from the regulatory perspective, though the company could theoretically address identified violations and attempt to operate in Italy again—a prospect that seems unlikely given the severity of findings.
These cases will likely establish important precedents. How European regulators handle Meta's WhatsApp AI strategy will influence how other dominant platforms can integrate and promote their own products. The DeepSeek outcome signals that data protection enforcement won't tolerate regulatory evasion or storage arrangements that undermine GDPR protections.
For the global AI industry, the message is clear: Innovation and growth must proceed within regulatory bounds designed to protect competition and privacy. Europe under leadership from countries like Italy won't be a jurisdiction where such protections can be ignored. Companies operating in European markets need to design their business models with regulatory constraints in mind, not as afterthought obstacles to overcome.
The next eighteen months will prove revealing, as Italian and European authorities continue developing the legal and policy frameworks that will govern AI's role in society. These investigations represent early chapters in a much longer story about how democracies regulate transformative technologies. Italy's competition watchdog and privacy authority are writing parts of that story, and their words will be read closely by technology companies worldwide.
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