Bill sent to Congress would give CADE stronger oversight of digital platforms.
The federal government on Wednesday (17) sent Congress a bill aimed at strengthening the role of Brazil’s antitrust watchdog, CADE (Administrative Council for Economic Defense), in regulating digital platforms.
Government officials said the proposal is not aimed at any specific company but acknowledged that CADE is expected to begin by addressing cases already ruled on in other countries but not yet applied in Brazil.
“This is about preventing anti-competitive practices that harm innovation and entrepreneurship,”
President Lula said at the presidential palace.
Discussions around the bill began last year. The government decided now was the right time to move forward, as recent decisions in the United States and European Union have not had an effect in Brazil, despite several countries having already taken action against large tech companies.
New digital markets unit
The bill proposes the creation of a new superintendency within CADE, with powers similar to those of the General Superintendency but focused exclusively on digital markets. The head of the new unit would be appointed by the president and approved by the Senate, with a dedicated team to monitor and investigate the sector.
To be designated by CADE, a company must meet at least one of two thresholds: annual revenue of more than R$5 billion ($950 million) in Brazil or R$50 billion ($9,5 billion) globally. In addition, the company must meet several characteristics typical of large digital platforms, such as network effects and rapid scale growth.
Being designated does not automatically create legal obligations for the company, but it does place it under closer scrutiny by authorities. The process has two stages: first, the company is designated; second, specific obligations may be imposed. CADE’s board will review the cases, and companies will have the opportunity to respond.
CADE would be able to impose targeted measures from a legally defined “menu.” These include, for example, banning exclusivity contracts that prevent new competitors from entering the market. Companies that fail to comply would face sanctions already outlined in existing law.
Source: Valor International
