Meta Hit With Antitrust Probe. Why the Stock Is Jumping.

The European Union on Thursday opened a formal investigation into Meta Platforms over the AI features on WhatsApp. (Julien De Rosa/AFP via Getty Images)

Meta Platforms stock was up 3.7% in early Thursday trading on the heels of a Bloomberg report that the company’s 2026 budget will see a 30% cut in expenses at the company’s money-losing metaverse effort. Reports of a European antitrust probe didn’t seem to have an impact.

Meta didn’t immediately respond to Barron’s request for comment on the report.

The metaverse was introduced with much fanfare by CEO Mark Zuckerberg in 2021, when it changed its name to Meta Platforms from Facebook. Zuckerberg imagined that people would use the company’s Quest virtual-reality headsets to interact with others in virtual environments for work and social activities.

It hasn’t worked out as planned. Ultimately, the company’s Horizon Worlds virtual environment was underbaked, while VR headsets and hand controllers remain too cumbersome for everyday use.

Meta’s Reality Labs segment, which houses the metaverse unit, has lost $71 billion on $9.7 billion in revenue since 2021. It has long been seen by investors as a black hole of expenses, and the 2026 budget may be looking to reign in the excess as Meta continues to spend freely on artificial intelligence.

Meanwhile, Roblox is building its own early version of the metaverse, already with over 100 million daily users.

Separately Thursday, the company was hit by an antitrust investigation from the European Union, although the Brussels probe wasn’t fazing investors and will have little impact on the stock.

The European Commission said it was looking into a policy that prohibits artificial-intelligence providers from using a WhatsApp tool that allows businesses to communicate with their customers. Brussels is concerned that the policy, adopted in October 2025, violates antitrust rules.

“As a result of the new policy, competing AI providers may be blocked from reaching their customers through WhatsApp,” the European Commission said. “On the other hand, Meta’s own AI service ‘Meta AI’ would remain accessible to users on the platform.”

The investigation will exclude Italy, which is conducting a probe of its own.

“The claims are baseless. The emergence of AI chatbots on our Business API puts a strain on our systems that they were not designed to support,” a WhatsApp spokesperson said in a statement to Barron’s.

There’s little reason for Wall Street to worry. EU antitrust investigations tend to be long and drawn out, and even if the trading bloc imposed a sizeable fine on Meta, it probably wouldn’t hurt shares.

The EU fined Meta 200 million euros ($234 million) in April over its data collection policies. That’s a drop in the water for the social-media company, which delivered $2.71 billion over the third quarter.

Write to George Glover at george.glover@dowjones.com