Brazil's Finance Ministry suggests a separate regulatory unit for digital platforms within the antitrust regulator.
Brazil’s Ministry of Finance has proposed that the technical unit responsible for regulating digital platforms within the Administrative Council for Economic Defense (CADE) be separate from the agency’s General Superintendence, Valor has learned.
Additionally, the ministry aims for the regulatory authority to be appointed by the president of the Republic and undergo a Senate confirmation process, similar to other senior positions within the antitrust body.
The draft bill is currently under discussion with the Ministry of Justice, the Chief of Staff Office, and CADE itself. In November, Valor reported that the Lula administration plans to submit its own bill to Congress on this matter, as they believe the existing proposals in Parliament do not fully address all aspects of regulation.
Both the Finance Ministry and members of CADE believe that the General Superintendence already wields significant power. Therefore, in the ministry’s view, it would be more appropriate to establish a new independent unit within the agency.
In October, the Finance Ministry proposed a preemptive, case-by-case competitive regulation for digital platforms in Brazil, the big techs. The economic team also advocates for CADE as the most qualified body to lead this process and set regulatory standards.
If the government proceeds with separating the department regulating big techs from CADE’s General Superintendence, it would create another significant position within the agency, likely attracting political interest in its appointment.
Through regulation, the Brazilian government seeks to align itself with other major global economies that have already established competitive regulatory standards. Notably, the proposal does not address content regulation on these platforms. The study consulted ten countries already regulating big techs.
The initiative aims to prohibit anticompetitive practices, such as exclusivity agreements and killer acquisitions, where large companies acquire emerging tech firms to prevent their growth and potential competition.
Only major platforms would fall under this criterion. According to the Finance Ministry, the intent is to regulate the seven companies currently under asymmetric regulation in the European Union (EU) on a case-by-case basis. Depending on CADE’s analysis, Brazilian market leaders could also receive special consideration.
The Finance Ministry argues that the CADE’s unit should be separate from the General Secretariat.
As of September 2023, the European Commission designated Alphabet, Amazon, ByteDance, Meta (banned and designated as extremist in Russia), and Microsoft as regulated entities. Apple and Booking were added later.
Recently, Marcos Pinto, secretary of economic reforms at the Finance Ministry, attended an event with lawmakers to highlight the need for Congress to approve this proposal to prevent Brazil from lagging behind major economies. There is currently no timeline for when the bill will be submitted to Congress.
Another practice the Finance Ministry aims to curb is “self-preferencing.” For online marketplace companies, this would prohibit them from giving more prominence to their own products over those of third parties.
According to Marcos Pinto, the Finance Ministry has not yet finalized a proposal for the model to regulate big techs.
Currently, CADE only acts on potential misconduct by companies after it occurs, through an administrative process. This approach, viewed by the agency, government, and experts as challenging, limits the ability to prevent economic abuses by these companies.
Source: Valor International
