Italy's Competition Probe on WhatsApp AI: Regulatory Pressure Points and Growth Implications for Messaging Platforms

Italy's antitrust probe into Meta's WhatsApp AI represents a pivotal regulatory challenge for the company. In July 2025, the Italian Competition Authority launched an investigation with EU collaboration, alleging Meta abused its dominant position by pre-installing Meta AI on WhatsApp without user consent. The probe examines whether this integration forces users into Meta's ecosystem, stifling competition, and could result in fines or forced changes to WhatsApp's AI integration practices under Article 102 TFEU. While the investigation focuses on potential anti-competitive practices in the messaging app AI market, Meta faces heightened scrutiny over its control of digital platforms.

WhatsApp's entrenched dominance in Italy provides context for the probe's significance. The messaging app maintained roughly 42.2 million weekly active users in Q2 2025, giving it a commanding lead over competitors like Telegram (15.4 million users) and Snapchat (2.7 million users). This market position creates a powerful ecosystem where user dependency on Meta's services is difficult to disrupt, even amid regulatory pressure and competitive moves by rivals. While Telegram achieved notable revenue growth, WhatsApp's scale remains unmatched.

A broader EU regulatory framework compounds these challenges. The Artificial Intelligence Act establishes staggered compliance requirements: prohibitions on high-risk AI systems and basic literacy rules took effect in February 2025, while member states must finalize enforcement authorities and penalties by August 2025. Meta, as a major AI platform provider, must comply with all GPAI obligations by August 2027. This multi-year timeline creates ongoing uncertainty about AI integration policies across the bloc, even if the Italian probe resolves favorably. Companies face continuous adaptation to evolving AI governance standards.

Growth Engine vs. Competitive Constraints

WhatsApp's AI monetization hinges on two pillars: Business Terms restrictions and Advanced Chat Privacy controls. The 2025 Business Solution Terms explicitly bar AI developers from using platform data to train models-including large language models-unless for exclusive internal use. Businesses may still hire AI providers as third-party services, but must block data sharing that could enhance external systems, with Meta retaining authority to terminate noncompliant accounts according to WhatsApp's legal terms. Separately, the "Advanced Chat Privacy" feature (launched April 2025) lets users disable AI interactions, chat exports, and media downloads on a per-conversation basis, though it remains off by default. While end-to-end encryption persists for standard chats, interactions with Meta AI (e.g., @Meta AI commands) bypass encryption, raising concerns about metadata collection despite Meta's assurances it cannot access content as EFF reports.

These measures aim to balance monetization with user trust, but face headwinds from regulatory friction and fragmented adoption. The 2025 AI Index Report notes 78% of organizations deployed AI in 2024, yet regulatory scrutiny is intensifying-with 59 U.S. federal AI-related rules enacted last year according to Stanford's AI Index. WhatsApp's policies could attract antitrust scrutiny, particularly in regions like Italy where Meta faces probes over data practices. Meanwhile, the feature's complexity may deter privacy-conscious users from adjusting defaults, contrasting with streamlined alternatives like Signal.

Globally, AI adoption is accelerating, with the U.S. leading investments at $109.1 billion. However, WhatsApp's path to monetization hinges on overcoming friction: if users distrust Meta's handling of chat-derived training data, uptake of AI features could stall. Regulatory shifts-especially in markets with strict data protections-may further constrain monetization flexibility. The net effect: WhatsApp's AI strategy is structurally sound but reliant on user education and regulatory navigation.

Competitive Moat vs. Regulatory Vulnerability

Regulatory pressure is now a primary test of WhatsApp's defensive moat, challenging its dominance despite overwhelming market share. The Italian antitrust probe targeting WhatsApp's AI policies represents a significant vulnerability. Authorities are specifically examining whether WhatsApp's restrictions blocking competing chatbots and forcing bundling of Meta's own AI tools violate competition laws as reported by the Wall Street Journal. This focus on forced bundling is the core regulatory threat to its exclusive position.

WhatsApp's moat remains formidable based on network effects and scale. In Italy, its Q2 2025 weekly active user base of 42.2 million dwarfs Telegram's 15.4 million and Snapchat's 2.7 million according to Sensor Tower data. This entrenched user base creates massive switching costs and makes WhatsApp the default messaging platform. However, this regulatory scrutiny introduces substantial legal and operational friction. The investigation could lead to interim measures forcing changes to its AI integration strategy, potentially diluting Meta's control and the perceived exclusivity of the WhatsApp ecosystem.

Competitive threats in the broader AI space also highlight WhatsApp's relative position. While Telegram demonstrates pockets of growth, evidenced by significant revenue increases to $85.6K by June, its scale remains a fraction of WhatsApp's. More disruptive AI models like ChatGPT command dominant global traffic shares (82.7%), while others like Grok leverage partnerships for rapid expansion according to Xamsor's AI statistics. Yet, WhatsApp's core messaging dominance provides a unique platform advantage these pure-play AI services lack. The critical question is whether regulatory action will force Meta to alter WhatsApp's design, potentially opening the door for competitors like Telegram to exploit any perceived weaknesses or restrictions imposed by the probe.

Regulatory Crossroads: AI Integration on WhatsApp

Meta faces mounting regulatory pressure around AI integration within WhatsApp, creating tangible valuation risks. Three distinct scenarios could materially impact the company's financials and strategic flexibility.

First, forced divestiture of AI features presents a direct revenue headwind. If regulators compel separation of Meta AI from WhatsApp, the loss of integrated user engagement could diminish advertising revenue potential within the world's most popular messaging app. While precise figures are unavailable, historical precedent suggests a meaningful impact on monetization efficiency in core messaging products under such forced structural changes. This scenario also carries reputational costs, potentially eroding user trust in Meta's ecosystem integration strategy. The ongoing Italian Competition Authority probe exemplifies this threat, directly challenging WhatsApp's default AI integration under anti-trust laws. Such regulatory actions risk fragmenting Meta's ecosystem advantage.

Second, compliance costs with the EU's AI Act will impose substantial ongoing expenses. The framework's July 2025 compliance tools and eight-month implementation window demand significant investment in transparency systems, human oversight mechanisms, and dataset quality controls for AI services operating in Europe. General-purpose AI models face particular scrutiny, requiring Meta to develop and maintain complex compliance infrastructure. These multi-year operational costs will directly reduce profitability margins without corresponding revenue generation, especially for high-risk applications like real-time biometric processing that messaging platforms might utilize. The Act's blanket ban on workplace emotion recognition further restricts potential enterprise monetization avenues within WhatsApp's business solutions.

Third, Meta's dominant market position ensures persistent regulatory scrutiny regardless of specific outcomes. The company's ecosystem control - demonstrated by pre-installed AI services on over 2 billion monthly active users - creates inherent friction with competition authorities globally. This scrutiny manifests through investigations like Italy's Article 102 TFEU probe and increasingly restrictive platform policies. WhatsApp's Business Solution Terms already prohibit AI providers from using platform data to train external models, signaling a shift toward tighter data governance that could limit AI innovation potential. This environment creates ongoing legal and operational uncertainty that hinders long-term strategic planning.

The most immediate financial impact appears through compliance costs and potential revenue restrictions rather than direct asset write-downs. While exact figures remain speculative, Meta's substantial legal reserves suggest manageable near-term costs. However, the cumulative effect of these regulatory pressures could erode the company's competitive moat over time. The critical valuation question becomes whether Meta can maintain its ecosystem integration advantages while navigating these increasingly complex regulatory constraints across global markets.