A key element of the initiative is the introduction of ex-ante regulation, which will allow CADE to intervene before potential violations by digital giants occur.
A leading voice in the creation of a bill to grant the Brazilian competition watchdog more enforcement power to rule on Big Tech issues has confirmed that the proposal is in the final phase.
Alexandre Rebêlo Ferreira, a secretary in Brazil’s Ministry of Finance, said the multisectoral project, which has been underway for two-and-a-half years, has finally received President Luiz Inácio Lula da Silva’s approval.
The Lula administration has been making a political calculation to decide when to put forward the digital markets bill in Congress. Recently, lawmakers approved legislation aimed at protecting children and adolescents in digital environments, and the government preferred to see that proposal passed before introducing a new one, MLex has learned. Lula has also backed a second bill for digital services.
"It is now a matter of political timing to finalize the agenda for submitting it"
to Congress, Ferreira said, adding that attention is now turning to small adjustments that may still be made to the final text.
The government is likely to face resistance from lawmakers aligned with Big Tech if the agenda comes up for a vote. Both the Chamber of Deputies and the Senate must approve a bill before it can be sanctioned by the president.
Ferreira said the Administrative Council for Economic Defense, or CADE, needs additional powers based on ex-ante regulation to strengthen its actions against a group of “five to 10 companies.” The cut to narrow down to a select list of firms is likely to be based on annual income, MLex understands.
Although the full list of companies hasn't been disclosed, CADE is expected to take a closer look at the actions of American Big Tech firms — Alphabet, Amazon, Apple, Meta*, and Microsoft — as well as Brazilian companies, including food delivery app iFood, MLex has learned.
“Perhaps the main issue is the speed at which these analyses are conducted [today]. And, no less important, the complexity of digital ecosystems and the need for a regulatory framework that differs from what we have in an ex-post approach,”
said CADE Councilor Camila Cabral Pires Alves.
Councilor Pires Alves didn't reveal details about how this specialized unit will be built. But she said CADE will need “specialized technical knowledge” to fortify the authority’s capacity to regulate this industry.
CADE’s interim president, Gustavo Augusto Freitas de Lima, recently told MLex the authority doesn't need a new Superintendency solely dedicated to enforcing rules against tech companies. He said a more tangible idea involves establishing three additional General Coordination of Antitrust Analysis units, which are groups within the Superintendence working on scrutinizing mergers, unilateral conduct, and other anticompetitive behavior by companies.
*Banned and designated as extremist in Russia
Source: MLex
