WhatsApp, which is owned by Meta, now finds itself in the middle of a ruling by Brazil’s antitrust regulator, CADE. The regulator has rejected Meta’s appeal to block an earlier order that suspends a controversial policy change aimed at barring third-party AI chatbots from the platform. This ruling highlights the importance of WhatsApp’s position in the Brazilian instant messaging ecosystem, in which it holds over 90% of the total market share.
CADE’s ruling underlines that WhatsApp’s planned prohibition of third party AI chatbots is not a proportionate response. In fact, this ban would be anticompetitive in the sector itself. The court ruling obliges WhatsApp to comply with the preventive measure order preventing any change in WhatsApp’s conditions of use. Further, it underscores the importance of letting independent, third-party developers flourish on the platform. The case rapporteur, Councilor Carlos Jacques, reported to the full Commission that he was worried about the precedent that limiting chatbot services would set.
Internationally, on April 1, 2021, Meta introduced a fee of $0.0625 per “non-template message” in Brazil. This new pricing is scheduled to go into effect on March 11, pushed by regulatory pressure and market forces. Developers are raising the alarm about this harmful pricing choice. They are all unwilling to return to service on WhatsApp due to costs incurred as a result of Meta’s recently introduced pricing scheme. The company is implementing this fee now in order to comply with implemented regulations. Specifically, it aims to cover areas where scaling AI chatbots on the WhatsApp business API is required by law.
The ruling is sure to have stark implications for developers and users. In Brazil, WhatsApp’s enormous market power means that its policies are often of paramount importance to the competitive playing field among instant messaging services. By restricting access to third-party chatbots, WhatsApp is unnecessarily limiting innovation and choice for users.
“Where we are legally required to provide AI chatbots through the WhatsApp business API, we are introducing pricing for the companies that choose to use our platform to provide those services,” – Meta spokesperson.
While WhatsApp continues to face regulatory challenges in addressing these issues, the fate of third-party chatbot integration on the platform is unclear. The company’s ability to adapt its policies while balancing compliance and developer interests will be closely monitored in the coming months. How this high profile case unfolds will establish a model for the future regulation of such platforms in Brazil and around the world.