Brazil Expects Regulatory Stance on Digital Platforms in 1H24

Brazil Expects Regulatory Stance on Digital Platforms in 1H24
Photo: freepik.com 16.02.2024 627

There is an ongoing debate about whether a special agency should be set up to regulate the digital economy.

Brazil’s federal government is working to have a more definite position on the competition regulation of digital platforms by the end of 1H24, said Alexandre Ferreira, general coordinator of economics and legislation at the Secretariat of Economic Reforms, which is part of the Finance Ministry.

“At this point, Brazil is unlikely not to have some kind of regulation,” CADE Commissioner Diogo Thomson de Andrade told this news service. “We have to think about the best [regulatory] model and the areas to which the State can contribute the most,” he said.

The Secretariat of Economic Reforms last month launched a public consultation on how best to regulate digital platforms. It asks if Brazil’s competition law needs to be changed, or if there is a need for new regulation, and if a specific regulator should regulate large digital platforms operating in the country – and, if so, if a new entity should be created or existing agencies should be given more enforcement powers.

The government wants to foster a debate “based on data, evidence and experiences, to ensure that… if something is necessary such as a new agency, a new law or a calibration of public policies, we can do it very quickly,” Ferreira said.

The public consultation will be open until 18 March.

Meanwhile, Public hearings have been held at the House of Representatives on an ex-ante competition regulation bill (PL 2768) inspired by the European Union’s (EU) Digital Markets Act (DMA). The bill designates telecommunications regulator Anatel as the entity in charge of regulating digital platforms.  At the same time, Brazil's Secretary of Economic Reforms Marcos Pinto expressed doubts about whether, with CADE in place, a new regulator for digital platforms is needed.

CADE is already jockeying to position itself as the agency responsible for regulating digital platforms.

Commissioner Victor Fernandes noted that an ex-ante regulation of digital platforms in Brazil should not only seek to achieve the most efficient allocation of resources but rather draw on a different legal framework than the competition law.

Fernandes also points out that the bill fails to clarify the concept of digital platforms with “significant access control power” – a notion like the DMA’s “gatekeepers.” The PL 2678 proposes designating digital platforms as having significant access control power – and thus subject to special regulation – if they generate at least BRL 70m (USD 14.1m) in annual revenues. 

Fernandes told PaRR news service that he dislikes exclusively focusing on quantitative criteria to determine which platforms are gatekeepers and instead favors the authority making that determination following an investigation.

Andrade proposes enhancements to the competition law so that CADE’s inquiry mechanism could become “an excellent mechanism to… monitor a so-called gatekeeper.” CADE’s settlement agreements – merger control agreements and cease-and-desist agreements – “should contain appropriate remedies to include some type of monitoring other than simply a structural remedy or stopping the conduct,” he added.

Source:  PaRR

digital markets  Brazil 

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