Newsletter
Suscríbete a nuestro Newsletter y entérate de las últimas novedades.
In the last five to six years, discussions in Brazil surrounding the enforcement of competition policy in digital markets have gained significant momentum. While antitrust cases in digital markets examined by the Brazilian Competition Authority (Conselho Administrativo de Defesa Econômica or CADE) have remained relatively limited —most concluding through settlements, as seen in cases involving iFood, Gympass, Booking, Expedia, and Decolar— or being closed despite differing outcomes in other jurisdictions —such as in the Google Adwords and Google Shopping cases—,the volume of merger review cases in digital markets ruled by CADE has increased significantly.
Nevertheless, several significant antitrust investigations are currently ongoing, involving major digital players such as Mercado Livre, iFood, Meta, and Google. Moreover, CADE has shown increased interest in digital markets through the publication of working documents, such as the Report on Digital Platforms Markets, the Working Document on Conglomerate Mergers, and the Guidelines for Non-Horizontal Mergers, as well as through the first and second editions of the BRICS in the Digital Economy report.
On 10 November 2022, Deputy João Maia introduced Bill of Law No. 2,768/2022 to the House of Representatives, proposing a regulatory framework for digital service providers. The bill targets specific platforms (mirroring categories defined in the DMA of the EU) with the power to control essential access, presumed when they generate annual operating revenue of BRL 70 million (USD 11.5 million) or more from providing services to the Brazilian public, regardless of their actual market power, and imposes particular obligations on these platforms.
Key provisions of this proposal include requirements for platforms to provide clear and comprehensive information about their services to the Brazilian National Telecommunications Agency (Agência Nacional de Telecomunicações or ANATEL), offer services in a fair and non-discriminatory manner, and ensure the adequate use of data collected through their services. Additionally, the bill prohibits platforms from refusing access to professional users. To specify these obligations, the bill empowers ANATEL to adopt implementing acts, impose necessary remedies, resolve disputes between operators, and review all mergers involving target platforms that are not assessed by CADE. The bill also outlines potentially valuable guiding principles for the regulator, including interventions proportionate to the risks involved, obligations tailored to the unique characteristics of each platform type, adherence to technical, non-arbitrary, and non-discriminatory criteria, assessments of the impact, costs, and benefits of imposed obligations, and fostering competition within each category of platform.
Nevertheless, these rules are undermined by a broad array of open-ended principles and objectives that form the basis for this legal framework. On one hand, the principles emphasize consumer protection, reducing regional and social inequalities, increasing social participation in discussions, and advancing matters of public interest. On the other hand, the bill outlines a diverse, and not necessarily commensurable, set of goals, including promoting economic development with robust and fair competition among operators and other economic agents affected by their activities, ensuring access to information, knowledge, and culture, fostering innovation and expanding new technologies and access models, encouraging interoperability through open technological standards, and incentivizing and defining mechanisms for data portability.
The noise that followed the initial proposal, particularly given its poor design —lacking clear principles or a systematic framework— and the illogical choice to assign regulatory authority over digital platforms to ANATEL, not only complicated discussions around Bill of Law No. 2,768/2022 in the Brazilian National Congress but also sparked other movements aimed at developing a more coherent regulatory model.
In January 2024, the Brazilian Ministry of Finance initiated a consultation process to gather stakeholder feedback on the ex-ante regulation of digital ecosystems. This process culminated in a report published in October 2024, based on 72 contributions from diverse actors, including civil society, business, digital platforms, and regulatory agencies. This includes a contribution from CADE, which advocated for an ex ante framework for selected digital platforms, adopting an asymmetric approach. The goal is to establish an ongoing regulatory dialogue with digital platforms, fostering a culture of compliance while enabling a more agile and adaptive enforcement of the law that keeps pace with technological innovations and evolving market dynamics. CADE proposed that the criteria for selecting regulated platforms should be both quantitative and qualitative, developed through a comprehensive market analysis and consultation with various stakeholders.
The report, resulting from this process, is divided into four main sections focused on the development of a proposal for the ex-ante regulation of digital ecosystems in Brazil.
First, the report outlines general aspects of the platform economy, discussing the strategic relevance of the digital economy for Brazil and examining its features such as winner-takes-all dynamics, strong network effects, and the role of data. Second, it addresses the limitations of Brazil’s current competition law framework, highlighting how merger review can fail to identify potentially problematic mergers and how traditional antitrust enforcement may face challenges in digital markets. Third, the report reviews similar regulatory initiatives worldwide aimed at addressing the limitations of competition law, including those in the European Union, the United Kingdom, Australia, Japan, Germany, the United States, South Africa, India, Taiwan, and Singapore.
Fourth, the report proposes reforms to Brazil’s competition law, including: (i) establishing procedures for the Brazilian Competition Authority (CADE) to designate platforms of systemic relevance in digital markets; (ii) introducing procedural transparency obligations for designated agents, subject to CADE’s discretion; (iii) creating a procedure for CADE to investigate designated companies and impose specific substantive obligations on a case-by-case basis; (iv) establishing a specialized CADE unit to implement this pro-competitive regulatory tool; (v) collaborating with regulators such as ANATEL and the Brazilian Data Protection Authority (Autoridade Nacional de Proteção de Dados ANPD) to enforce substantive obligations as needed, based on technical and sectoral considerations; (vi) enhancing CADE’s ability to conduct market studies, with powers to request and analyze industry-specific data; (vii) creating an interinstitutional cooperation forum between CADE and other federal bodies, such as ANATEL, ANPD, and the Brazilian Consumer Protection Authority (SENACON); (viii) updating antitrust analysis tools to continually improve CADE’s analytical framework for identifying and assessing competitive risks, including new theories of harm; (ix) revising CADE’s merger notification form to include questions about digital platform business models; (x) considering the adoption of non-fast track procedures for merger cases involving large digital platforms with a high number of users; (xi) using the provisions of the Brazilian Competition Act (Law No. 12,529/2011) to require the submission of mergers that may pose competition risks despite not meeting formal notification thresholds; and (xii) updating revenue thresholds for mandatory merger submissions as set forth in Law No. 12,529/2011.
The plan of President Lula’s administration is to convert these recommendations into amendments to Law No. 12,529/2011, which will be presented as a legislative proposal to the Brazilian National Congress by the end of 2024 or early 2025. This proposal aims to introduce a substantially different and undeniably more structured model for the ex-ante regulation of digital ecosystems in Brazil, in contrast to the existing Bill of Law No. 2,768/2022. However, concrete definitions are still pending and may be further explored leading up to and during legislative debates. Two key aspects warrant particular attention.
One key aspect is the institutional design of the body within CADE responsible for enforcing this new ex ante regulation, which would oversee market studies, designate key ecosystem agents, and define substantive obligations for these players. We believe the best model may be the creation of a unit separate from CADE’s General Superintendence (Superintendência-Geral or SG/CADE) and the Economic Studies Department (Departamento de Estudos Econômicos or DEE).
The proposal to grant organizational autonomy to this new unit, distinct from CADE’s preexisting structures, stems from the need to overcome biases inherent in the traditional enforcement mechanisms. An independent internal body with a direct link to CADE’s Administrative Tribunal allows a fresh institutional framework, free from internal dynamics that could undermine its effectiveness. Moreover, this would facilitate specialization by assigning the new unit not only the responsibility for implementing distinct enforcement tools, but also for executing specific procedures for their application. In a White Paper that we recently put out for discussion, we propose that this new unit be granted its own investigatory powers and the ability to initiate procedures autonomously, whether for conducting market studies, designating key ecosystem agents, or establishing substantive obligations for these players. Additionally, appointing the head of this new unit by the President of CADE’s Administrative Tribunal, subject to approval by a majority of its members, could help ensure political balance in the regulation of digital ecosystems. Appointing a single individual would concentrate considerable competition enforcement authority in a politically sensitive industry, whereas the plural composition of CADE’s Administrative Tribunal promotes greater balance through its diverse membership, reinforcing the goal of selecting a non-partisan figure and ensuring the neutrality of the nomination process.
Another key consideration is how to integrate the mechanisms proposed in the Brazilian Ministry of Finance’s report—market studies, designation of key ecosystem agents, and the establishment of substantive obligations for these agents—into a cycle that fosters the development of ex ante regulation tailored to Brazil’s digital economy. Our proposal is to combine these mechanisms into a cohesive regulatory policy cycle. This cycle can be divided into two main phases: first, the market study of selected services, and then the procedures for the designation and definition of substantive obligations for key agents.
Integrating these steps can, in addition to helping a new regulatory body strengthen its institutional resilience, provide a more comprehensive understanding of market dynamics before implementing concrete interventions, ensuring that regulatory actions are both precise and effective.
Additionally, sunset provisions, potentially set for two years, would be applied to the obligations assigned to designated key players before the cycle is restarted. This allows for periodic interventions that are particularly effective in markets with disruptive players. On one hand, the periodic nature of the cycle prevents the adoption of definitive measures that could stifle innovation among key agents in these markets. On the other hand, it facilitates greater experimentation in the continuous development of substantive obligations that effectively address competition concerns within ecosystems.
*Arthur Sadami is researcher at Centro de Tecnologia e Sociedade (FGV Direito Rio) and at Núcleo de Pesquisa em Concorrência, Política Pública, Inovação e Tecnologia (FGV Direito SP), Bacherlor of Laws (2019), LL.M. (2024), and PhD candidate at Universidade de Sao Paulo.
*Nicolo Zingales is Professor at FGV Law School in Rio de Janeiro, and Coordinator of its Permanent Research Group on E-commerce studies. PhD in International Law and Economics from Bocconi University.
