On Thursday, the Brazilian government put forth a recommendation to reform its competition law, enabling the antitrust authority, CADE, to classify certain digital platforms as systemically important. This classification would subject these platforms to new regulatory obligations as deemed necessary.
Importance of the Reform
The Finance Ministry of Brazil has highlighted the need for enhanced regulatory measures to adapt to a changing landscape where dominant tech companies hinder fair competition, given their significant size and market influence.
The government specifically pointed out concerns regarding practices such as exclusivity agreements, “killer acquisitions,” and self-preferencing, where a company’s own products or services are prioritized in online searches.
Specifics of the Proposed Changes
The suggested reforms would require new obligations, including pre-merger notifications and increased transparency for both end-users and businesses regarding key information related to services and product offerings. Furthermore, companies would be mandated to inform users of any changes to terms of service or conditions.
Context of the Proposal
The initiative is described as a compromise, blending elements from both the United States and European Union regulatory frameworks. It also draws from practices in countries such as Japan, the United Kingdom, and Germany.
Future Steps
For the proposed changes to be implemented, the government must determine whether to move forward by introducing a new bill to Congress or by adding the recommendations to an existing legislative proposal currently under discussion.
Official Remarks
Economic Reforms Secretary Marcos Pinto emphasized during a press conference that the proposal is both reasonable and balanced, expressing his expectation for legislative action to be taken by the end of the year.
Pinto further stated, “Our goal is not to hinder innovation, impose unnecessary costs or create bureaucracy where it’s not needed. What we want is to uphold a fundamental value in the economy, which is competition.”
© Thomson Reuters 2024
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