Competition regulation

Italy investigates Meta over AI integration in WhatsApp

Italy’s antitrust watchdog has investigated Meta Platforms over allegations that the company may have abused its dominant position by integrating its AI assistant directly into WhatsApp.

The Rome-based authority, formally known as the Autorità Garante della Concorrenza e del Mercato (AGCM), announced the probe on Wednesday, stating that Meta may have breached European Union competition regulations.

The regulator claims that the introduction of the Meta AI assistant into WhatsApp was carried out without obtaining prior user consent, potentially distorting market competition.

Meta AI, the company’s virtual assistant designed to provide chatbot-style responses and other generative AI functions, has been embedded in WhatsApp since March 2025. It is accessible through the app’s search bar and is intended to offer users conversational AI services directly within the messaging interface.

The AGCM is concerned that this integration may unfairly favour Meta’s AI services by leveraging the company’s dominant position in the messaging market. It warned that such a move could steer users toward Meta’s products, limit consumer choice, and disadvantage competing AI providers.

‘By pairing Meta AI with WhatsApp, Meta appears to be able to steer its user base into the new market not through merit-based competition, but by ‘forcing’ users to accept the availability of two distinct services,’ the authority said.

It argued that this strategy may undermine rival offerings and entrench Meta’s position across adjacent digital services. In a statement, Meta confirmed cooperating fully with the Italian authorities.

The company defended the rollout of its AI features, stating that their inclusion in WhatsApp aimed to improve the user experience. ‘Offering free access to our AI features in WhatsApp gives millions of Italians the choice to use AI in a place they already know, trust and understand,’ a Meta spokesperson said via email.

The company maintains its approach, which benefits users by making advanced technology widely available through familiar platforms. The AGCM clarified that its inquiry is conducted in close cooperation with the European Commission’s relevant offices.

The cross-border collaboration reflects the growing scrutiny Meta faces from regulators across the EU over its market practices and the use of its extensive user base to promote new services.

If the authority finds Meta in breach of EU competition law, the company could face a fine of up to 10 percent of its global annual turnover. Under Article 102 of the Treaty on the Functioning of the European Union, abusing a dominant market position is prohibited, particularly if it affects trade between member states or restricts competition.

To gather evidence, AGCM officials inspected the premises of Meta’s Italian subsidiary, accompanied by Guardia di Finanza, the tax police’s special antitrust unit in Italy.

The inspections were part of preliminary investigative steps to assess the impact of Meta AI’s deployment within WhatsApp. Regulators fear that embedding AI assistants into dominant platforms could lead to unfair advantages in emerging AI markets.

By relying on its established user base and platform integration, Meta may effectively foreclose competition by making alternative AI services harder to access or less visible to consumers. Such a case would not be the first time Meta has faced regulatory scrutiny in Europe.

The company has been the subject of multiple investigations across the EU concerning data protection, content moderation, advertising practices, and market dominance. The current probe adds to a growing list of regulatory pressures facing the tech giant as it expands its AI capabilities.

The AGCM’s investigation comes amid broader EU efforts to ensure fair competition in digital markets. With the Digital Markets Act and AI Act emerging, regulators are becoming more proactive in addressing potential risks associated with integrating advanced technologies into consumer platforms.

As the investigation continues, Meta’s use of AI within WhatsApp will remain under close watch. The outcome could set an essential precedent for how dominant tech firms can release AI products within widely used communication tools.

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EU Commission accuses Temu of failing DSA checks

The European Commission has accused Temu of breaching the Digital Services Act by failing to assess and address the sale of illegal or dangerous products.

The accusation follows months of investigation and a review of a required risk report submitted by Temu, which the Commission found too vague.

A mystery shopping exercise by the EU uncovered unsafe toys and electronics on the platform, raising concerns over consumer safety.

Additional parts of the probe are ongoing, including scrutiny of Temu’s use of addictive designs, algorithmic transparency and product recommendations.

Temu now has a few weeks to respond to the preliminary findings, though no final deadline has been given. Under the DSA, confirmed violations could result in fines of up to 6% of a company’s global turnover.

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The US push for AI dominance through openness

In a bold move to maintain its edge in the global AI race—especially against China—the United States has unveiled a sweeping AI Action Plan with 103 recommendations. At its core lies an intriguing paradox: the push for open-source AI, typically associated with collaboration and transparency, is now being positioned as a strategic weapon.

As Jovan Kurbalija points out, this plan marks a turning point where open-weight models are framed not just as tools of innovation, but as instruments of geopolitical influence, with the US aiming to seed the global AI ecosystem with American-built systems rooted in ‘national values.’

The plan champions Silicon Valley by curbing regulations, limiting federal scrutiny, and shielding tech giants from legal liability—potentially reinforcing monopolies. It also underlines a national security-first mentality, urging aggressive safeguards against foreign misuse of AI, cyber threats, and misinformation. Notably, it proposes DARPA-led initiatives to unravel the inner workings of large language models, acknowledging that even their creators often can’t fully explain how these systems function.

Internationally, the plan takes a competitive, rather than cooperative, stance. Allies are expected to align with US export controls and values, while multilateral forums like the UN and OECD are dismissed as bureaucratic and misaligned. That bifurcation risks alienating global partners—particularly the EU, which favours heavy AI regulation—while increasing pressure on countries like India and Japan to choose sides in the US–China tech rivalry.

Despite its combative framing, the strategy also nods to inclusion and workforce development, calling for tax-free employer-sponsored AI training, investment in apprenticeships, and growing military academic hubs. Still, as Kurbalija warns, the promise of AI openness may clash with the plan’s underlying nationalistic thrust—raising questions about whether it truly aims to democratise AI, or merely dominate it.

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Bank of England calls for urgent digital payments reform

Bank of England Governor Andrew Bailey has called for urgent digital upgrades to the UK’s retail payments system to support future growth.

At the Mansion House dinner, he said upgrading infrastructure is vital to support the economy and stay globally competitive.

Bailey remains sceptical about launching a digital pound. While he acknowledged that stablecoins may have a future role, he stressed they must not replace commercial bank money and must be appropriately regulated.

He also warned against global banks issuing their stablecoins, which could reduce lending capacity.

He went on to express concern over rising global trade tensions, calling the shift in policy ‘the most sudden and fundamental’ in decades.

Bailey urged the IMF and WTO to step in and help restore cooperation in the international trading system.

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AI and quantum tech reshape global business

AI and quantum computing are reshaping global industries as investment surges and innovation accelerates across sectors like finance, healthcare and logistics. Microsoft and Amazon are driving a major shift in AI infrastructure, transforming cloud services into profitable platforms.

Quantum computing is moving beyond theory, with real-world applications emerging in pharmaceuticals and e-commerce. Google’s development of quantum-inspired algorithms for virtual shopping and faster analytics demonstrates its potential to revolutionise decision-making.

Sustainability is also gaining ground, with companies adopting AI-powered solutions for renewable energy and eco-friendly manufacturing. At the same time, digital banks are integrating AI to challenge legacy finance systems, offering personalised, accessible services.

Despite rapid progress, ethical concerns and regulatory challenges are mounting. Data privacy, AI bias, and antitrust issues highlight the need for responsible innovation, with industry leaders urged to balance risk and growth for long-term societal benefit.

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AI reshaping the US labour market

AI is often seen as a job destroyer, but it’s also emerging as a significant source of new employment, according to a new Brookings report. The number of job postings mentioning AI has more than doubled in the past year, with demand continuing to surge across various industries and regions.

Over the past 15 years, AI-related job listings have grown nearly 29% annually, far outpacing the 11% growth rate of overall job postings in the broader economy.

Brookings based its findings on data from Lightcast, a labour market analytics firm, and noted rising demand for AI skills across sectors, including manufacturing. According to the US Census Bureau’s Business Trends Survey, the share of manufacturers using AI has jumped from 4% in early 2023 to 9% by mid-2025.

Yet, AI jobs still form a small part of the market. Goldman Sachs predicts widespread AI adoption will peak in the early 2030s, with a slower near-term influence on jobs. ‘AI is visible in the micro labour market data, but it doesn’t dominate broader job dynamics,’ said Joseph Briggs, an economist at Goldman Sachs.

Roles range from AI engineers and data scientists to consultants and marketers learning to integrate AI into business operations responsibly and ethically. In 2025, over 80,000 job postings cited generative AI skills—up from fewer than 4,000 in 2010, Brookings reported, indicating explosive long-term growth.

Job openings involving ‘responsible AI’—those addressing ethical AI use in business and society—are also rising, according to data from Indeed and Lightcast. ‘As AI evolves, so does what counts as an AI job,’ said Cory Stahle of the Indeed Hiring Lab, noting that definitions shift with new business applications.

AI skills carry financial value, too. Lightcast found that jobs requiring AI expertise offer an average salary premium of $18,000, or 28% more annually. Unsurprisingly, tech hubs like Silicon Valley and Seattle dominate AI hiring, but job growth spreads to regions like the Sunbelt and the East Coast.

Mark Muro of Brookings noted that universities play a key role in AI job growth across new regions by fuelling local innovation. AI is also entering non-tech fields such as finance, human resources, and marketing, with more than half of AI-related postings now being outside IT roles.

Muro expects more widespread AI adoption in the next few years, as employers gain clarity on its value, limitations and potential for productivity. ‘There’s broad consensus that AI boosts productivity and economic competitiveness,’ he said. ‘It energises regional leaders and businesses to act more quickly.’

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Trump pushes for ‘anti-woke’ AI in US government contracts

Tech firms aiming to sell AI systems to the US government will now need to prove their chatbots are free of ideological bias, following a new executive order signed by Donald Trump.

The measure, part of a broader plan to counter China’s influence in AI development, marks the first official attempt by the US to shape the political behaviour of AI in services.

It places a new emphasis on ensuring AI reflects so-called ‘American values’ and avoids content tied to diversity, equity and inclusion (DEI) frameworks in publicly funded models.

The order, titled ‘Preventing Woke AI in the Federal Government’, does not outright ban AI that promotes DEI ideas, but requires companies to disclose if partisan perspectives are embedded.

Major providers like Google, Microsoft and Meta have yet to comment. Meanwhile, firms face pressure to comply or risk losing valuable public sector contracts and funding.

Critics argue the move forces tech companies into a political culture war and could undermine years of work addressing AI bias, harming fair and inclusive model design.

Civil rights groups warn the directive may sideline tools meant to support vulnerable groups, favouring models that ignore systemic issues like discrimination and inequality.

Policy analysts have compared the approach to China’s use of state power to shape AI behaviour, though Trump’s order stops short of requiring pre-approval or censorship.

Supporters, including influential Trump-aligned venture capitalists, say the order restores transparency. Marc Andreessen and David Sacks were reportedly involved in shaping the language.

The move follows backlash to an AI image tool released by Google, which depicted racially diverse figures when asked to generate the US Founding Fathers, triggering debate.

Developers claimed the outcome resulted from attempts to counter bias in training data, though critics labelled it ideological overreach embedded by design teams.

Under the directive, companies must disclose model guidelines and explain how neutrality is preserved during training. Intentional encoding of ideology is discouraged.

Former FTC technologist Neil Chilson described the order as light-touch. It does not ban political outputs; it only calls for transparency about generating outputs.

OpenAI said its objectivity measures align with the order, while Microsoft declined to comment. xAI praised Trump’s AI policy but did not mention specifics.

The firm, founded by Elon Musk, recently won a $200M defence contract shortly after its Grok chatbot drew criticism for generating antisemitic and pro-Hitler messages.

Trump’s broader AI orders seek to strengthen American leadership and reduce regulatory burdens to keep pace with China in the development of emerging technologies.

Some experts caution that ideological mandates could set a precedent for future governments to impose their political views on critical AI infrastructure.

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Google’s AI Overviews reach 2 billion users monthly, reshaping the web’s future

Google’s AI Overviews, the generative summaries placed above traditional search results, now serve over 2 billion users monthly, a sharp rise from 1.5 billion just last quarter.

First launched in May 2023 and widely available in the US by mid-2024, the feature has rapidly expanded across more than 200 countries and 40 languages.

The widespread use of AI Overviews transforms how people search and who benefits. Google reports that the feature boosts engagement by over 10% for queries where it appears.

However, a study by Pew Research shows clicks on search results drop significantly when AI Overviews are shown, with just 8% of users clicking any link, and only 1% clicking within the overview itself.

While Google claims AI Overviews monetise at the same rate as regular search, publishers are left out unless users click through, which they rarely do.

Google has started testing ads within the summaries and is reportedly negotiating licensing deals with select publishers, hinting at a possible revenue-sharing shift. Meanwhile, regulators in the US and EU are scrutinising whether the feature violates antitrust laws or misuses content.

Industry experts warn of a looming ‘Google Zero’ future — a web where search traffic dries up and AI-generated answers dominate.

As visibility in search becomes more about entity recognition than page ranking, publishers and marketers must rethink how they maintain relevance in an increasingly post-click environment.

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Amazon exit highlights deepening AI divide between US and China

Amazon’s quiet wind-down of its Shanghai AI lab underscores a broader shift in global research dynamics, as escalating tensions between the US and China reshape how tech giants operate across borders.

Instead of expanding innovation hubs in China, major American firms are increasingly dismantling them.

The AWS lab, once central to Amazon’s AI research, produced tools said to have generated nearly $1bn in revenue and over 100 academic papers.

Yet its dissolution reflects a growing push from Washington to curb China’s access to cutting-edge technology, including restrictions on advanced chips and cloud services.

As IBM and Microsoft have also scaled back operations or relocated talent away from mainland China, a pattern is emerging: strategic retreat. Rather than risking compliance issues or regulatory scrutiny, US tech companies are choosing to restructure globally and reduce local presence in China altogether.

With Amazon already having exited its Chinese ebook and ecommerce markets, the shuttering of its AI lab signals more than a single closure — it reflects a retreat from joint innovation and a widening technological divide that may shape the future of AI competition.

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Meta tells Australia AI needs real user data to work

Meta, the parent company of Facebook, Instagram, and WhatsApp, has urged the Australian government to harmonise privacy regulations with international standards, warning that stricter local laws could hamper AI development. The comments came in Meta’s submission to the Productivity Commission’s review on harnessing digital technology, published this week.

Australia is undergoing its most significant privacy reform in decades. The Privacy and Other Legislation Amendment Bill 2024, passed in November and given royal assent in December, introduces stricter rules around handling personal and sensitive data. The rules are expected to take effect throughout 2024 and 2025.

Meta maintains that generative AI systems depend on access to large, diverse datasets and cannot rely on synthetic data alone. In its submission, the company argued that publicly available information, like legislative texts, fails to reflect the cultural and conversational richness found on its platforms.

Meta said its platforms capture the ways Australians express themselves, making them essential to training models that can understand local culture, slang, and online behaviour. It added that restricting access to such data would make AI systems less meaningful and effective.

The company has faced growing scrutiny over its data practices. In 2024, it confirmed using Australian Facebook data to train AI models, although users in the EU have the option to opt out—an option not extended to Australian users.

Pushback from regulators in Europe forced Meta to delay its plans for AI training in the EU and UK, though it resumed these efforts in 2025.

Australia’s Office of the Australian Information Commissioner has issued guidance on AI development and commercial deployment, highlighting growing concerns about transparency and accountability. Meta argues that diverging national rules create conflicting obligations, which could reduce the efficiency of building safe and age-appropriate digital products.

Critics claim Meta is prioritising profit over privacy, and insist that any use of personal data for AI should be based on informed consent and clearly demonstrated benefits. The regulatory debate is intensifying at a time when Australia’s outdated privacy laws are being modernised to protect users in the AI age.

The Productivity Commission’s review will shape how the country balances innovation with safeguards. As a key market for Meta, Australia’s decisions could influence regulatory thinking in other jurisdictions confronting similar challenges.

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