CADE upholds fine against Meta and WhatsApp

The Administrative Council for Economic Defense (CADE) maintained the notice of violation issued against WhatsApp LLC and Facebook Serviços Online do Brasil Ltda. after investigating the non-compliance of a preventive measure, related to WhatsApp Business and access to the platform by AI chatbot providers.

The Office of the Superintendent General (SG) launched an administrative proceeding after identifying that Meta changed the WhatsApp Business terms, allowing to charge Brazilian users for messages sent by AI chatbots, while the preventive measure was in force. It also emphasised that the charges could, in practice, function as entry or expansion barriers in the AI chatbot market, especially for new entrants.

Commissioner Carlos Jacques, rapporteur of the case, concluded that the companies did not comply with the Tribunal’s decision and should remain subject to a daily fine of BRL 250,000 until full compliance.

Restoration of the competitive environment

The Tribunal of CADE unanimously upheld the preventive measure imposed by the SG, which required chatbots to have access to WhatsApp. It stated that restoring the competitive environment implied allowing AI chatbots to operate without additional charges for access to WhatsApp, since it was the original term when the preventive measure was imposed.

The rapporteur emphasised that the compliance was not limited to simply suspending the new terms, but required the adoption of concrete mechanisms to enable the excluded chatbots to resume their activities on WhatsApp, in the same way as they operated prior to the change in the Terms of Use.

For Mr Jacques, the attempt to classify these players as marketing messages, subject to per-message charges, materially altered the conditions of access and contravened the express terms of the measure. In CADE’s view, the practice could reproduce exclusionary effects similar to those of the clauses already suspended.

The rapporteur’s vote links the case to the debate on constructive refusal to deal, highlighting that, in digital markets, the imposition of economically onerous terms may produce effects equivalent to the formal exclusion of rivals.

The companies argued that the preventive measure didn’t prohibit charging for the use of the WhatsApp Business API and that its sole purpose was to prevent the unilateral exclusion of AI chatbots.They also pleaded that the fee is commercially reasonable and consistent with other platforms.