Meta Faces EU Ultimatum Over Alleged WhatsApp Anti-Competitive Practices

European Union regulators have escalated their confrontation with Meta Platforms Inc., issuing a formal accusation of market power abuse and threatening rare interim measures. The move places significant pressure on the social media giant, which is simultaneously navigating a pivotal phase of massive artificial intelligence investment and robust, yet costly, financial performance.

On Monday, the European Commission formally charged Meta with violating EU competition rules. The core allegation centers on the company's WhatsApp Business platform. Regulators assert that Meta is deliberately restricting access to this platform, reserving it exclusively for its own AI assistant, Meta AI, while systematically blocking rival services such as ChatGPT from integration.

A particularly severe aspect of the case is Brussels's consideration of interim measures. This procedural tool, seldom deployed, would compel Meta to alter its business practices immediately, even before the formal investigation concludes. The Commission's willingness to pursue this path underscores its serious concern about potential market distortion within the rapidly evolving AI sector.

Meta has firmly rejected the allegations. In its defense, the company contends that users have ample access to AI assistants through various other channels, including app stores, operating systems, and websites. It argues the Commission's foundational premise—that the WhatsApp Business API constitutes a key distribution channel for chatbots—is incorrect. Meta also pointed to a similar case in Brazil that was dismissed.

Financial Fortitude Amid Soaring Expenditure

This regulatory clash follows the release of Meta's solid fourth-quarter 2025 results on January 28. The company reported a 24% year-over-year revenue increase to $59.89 billion. Earnings per share came in at $8.88, surpassing analyst expectations of $8.23. The operating margin remained strong at 41%.

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However, the investment blueprint for 2026 reveals a dramatic surge in spending:

• Capital Expenditure: Projected between $115 billion and $135 billion, nearly double the $72.2 billion spent in 2025.
• Total Expenses: Forecast to reach $162 billion to $169 billion for the full year.
• Reality Labs Losses: An additional $19 billion in losses is anticipated, consistent with 2025 levels.

CEO Mark Zuckerberg indicated that 2026 will likely represent the peak year for losses in the Reality Labs division. Cumulative losses from this metaverse-focused unit have already hit $80 billion since late 2020. The bulk of the new capital expenditure is directed toward AI infrastructure, a critical battleground where Meta must compete against increasingly formidable rivals.

Mounting Legal Challenges on Dual Fronts

Beyond the EU's accusations, Meta is confronting a growing list of legal hurdles. In the United States, the company faces several youth safety-related lawsuits scheduled for 2026. Meta has acknowledged these proceedings could "ultimately result in a material loss." Furthermore, a trial concerning alleged addictive design features on Instagram and YouTube commenced in Los Angeles on February 9.

These parallel regulatory and legal battles threaten to constrain Meta's operational flexibility. This comes at a time when the company is aggressively executing its AI strategy and channeling billions into next-generation technologies.

Strategic Crossroads

Meta finds itself at a critical juncture. While its core advertising business continues to generate substantial profit, its capital allocation strategy is facing intensified scrutiny. Should the European Commission enact immediate corrective measures, it could significantly disrupt Meta's AI rollout plans across the continent. The upcoming quarterly report on April 29 will be closely watched for early signs that these historic investments are yielding returns, or if costs are outpacing revenue growth from new initiatives.