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Brazil investigates Meta for unfair competition on WhatsApp

Brazil's competition regulator has launched an investigation against American tech company Meta, the parent company of WhatsApp, Facebook, and Instagram, over suspected abuse of market dominance in the artificial intelligence (AI) sector.

The Administrative Council for Economic Defense (CADE) announced on Monday a preventive measure to immediately suspend the new terms of service for WhatsApp Business, set to take effect on January 15, until all indications of wrongdoing are evaluated.

In a statement, CADE noted that the investigation is examining contractual changes made by Meta in October, which reportedly restricted access for other AI tool providers to the WhatsApp platform while allowing the operation of its own platform, Meta AI.

The investigation was initiated following complaints from Spanish company Factoría Elcano and American firm Brainlogic AI. The Brazilian competition regulator will assess whether these modifications could lead to “market closures, exclusion of competitors, and undue favoritism towards the company’s product.”

According to CADE, the complete ban on third parties, combined with the maintenance of Meta AI, appears disproportionate and may potentially violate free economic competition. This preventive measure aims to preserve existing competitive conditions and ensure the effectiveness of the investigation.

In a statement, Meta asserted that the changes to the terms and conditions of WhatsApp Business would not cause significant or irreparable harm to competition in the chatbot market, claiming these services would “continue to compete vigorously, leveraging the numerous alternatives available to reach users.”

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