On 19 January, Brazil’s Finance Ministry released a public consultation to gather insights on the potential regulation of digital platforms. The aim is to assess the need for changes to the country’s competition law (Law 12.529/2011), including the creation of a specific regulatory body, defining and categorising digital platforms, and determining specific aspects related to digital markets that may be subject to additional regulation.
Digital platforms that may potentially be subject to regulations stemming from the consultation include online search engines (Google), instant messaging (WhatsApp, Telegram), social media (Facebook, Instagram, TikTok), and online marketplaces (Amazon), among others.
Four main set of questions are being raised in this consultation, including:
- Objectives and digital platforms regulatory review;
- Sufficiency and adequacy of the current economic regulation and competition defence models (covering topics such as algorithmic discrimination and data collection);
- Design of a possible regulatory model for pro-competitive economic regulation; and
- Institutional arrangement for regulation and oversight.
Moreover, it discusses the suitability of the existing regulatory framework and new enforcement measures, particularly symmetric/asymmetric and ex-ante/post regulations. It is important to note that the latest consultation focuses solely on competition issues and does not consider other digital platform topics that are also a priority for the Lula administration such as fake news, transparency, content moderation, and remuneration for journalistic works online.
However, the consultation does not come as a surprise. In the last few years, global competition authorities have taken a more active approach towards digital platform regulation, introducing new bills and regulations targeting companies. Brazil is no exception to this trend, as regulators have expressed concerns over the operation of ‘Big Tech’ companies in the country. The government has sought feedback on this matter through various channels, including public hearings and consultations conducted by the Brazilian Internet Steering Committee (CGI.br), the National Telecommunications Agency (Anatel), and the Parliamentary Front for Women Entrepreneurs.
Notably, Bill 2768/2022 – currently under discussion in Congress – is also part of these ongoing efforts to establish competition-focused regulations for digital platforms. The bill seeks to establish the Brazilian Digital Market Act – modelled after the European Union’s Digital Markets Act (DMA) – while granting Anatel powers to regulate digital platforms operating in the country and introducing a fee to be paid by large companies in the tech sector. The latest consultation considers international legislation such as the DMA, the UK Bill, and Japan’s TFDPA as best practices for enhancing its digital market competition framework.
Digital markets will remain a focus area for the Administrative Council for Economic Defense (CADE)’s anti-competition efforts in 2024. The government is of the view that the recent uptick in cases involving digital platforms presented before the competition watchdog underscores the need to further discuss the challenges and limitations of updating or creating new economic regulations specific to such platforms.
Digital platform regulations arising from Latin America’s largest economy have the potential for regional spillover effects. Brazil is a regional trendsetter, and other countries in the region will likely replicate these rules, particularly as they continue to enhance their respective competition frameworks. For instance, Argentina is already contemplating a comprehensive reform of its competition law to create a new Markets and Competition Agency. Meanwhile, Mexico is actively investigating a case against Google for alleged anti-competitive practices in digital advertising.
An inclusive multistakeholder engagement process will be critical to ensure that any new regulation strikes a fair balance between innovation and consumer protection. This will also be the case if the Brazilian government is ready to “walk the talk” in developing an approach to digital transformation that embraces the broader concept of the digital economy while empowering the private sector in shaping a strong Brazilian digital economy landscape.
The government has invited interested stakeholders to submit comments on the proposed measures by 18 March 2024. For more information on the consultation (Portuguese), visit here.
Access Partnership is following developments in digital regulation around the world. If you would like more information on digital market regulation or require support in responding to the public consultation, please contact Rodrigo Serrallonga at [email protected], Melissa González at [email protected], or Lim May-Ann at [email protected].