Brazil Proposes Reform to Competition Law Targeting Big Tech

Brazil’s government announced on Thursday a significant reform to its competition law aimed at enhancing the authority of its antitrust agency, CADE, to manage the growing influence of major digital platforms. The proposed changes would enable CADE to designate certain platforms as “systemically relevant,” thereby imposing new obligations as necessary, according to Reuters.

The urgency of this reform stems from the belief that Brazil’s current legislation is insufficient to address the challenges posed by large tech companies, which often stifle competition through their extensive market power. The Finance Ministry highlighted practices such as exclusivity agreements, “killer acquisitions,” and self-preferencing—where a company prioritizes its own products in search results—as key issues that need to be addressed to foster a healthier competitive environment.

The proposed reforms would introduce a range of new requirements for these dominant platforms. Among the notable measures are pre-merger notifications, rules mandating transparency for end-users and businesses about commercially relevant information regarding service and product usage, and requirements to disclose changes in terms of service. These initiatives aim to create a more informed marketplace and empower consumers.

Related: Brazil Launches Antitrust Investigations into Big Tech AI Acquisitions

Brazil’s approach to regulating big tech is seen as a compromise between the regulatory frameworks established in the United States and the European Union. Additionally, the government has taken inspiration from practices implemented in Japan, the United Kingdom, and Germany, seeking to strike a balance that fosters competition without stifling innovation.

Looking ahead, the Brazilian government faces a crucial decision on how to advance these reforms. It must determine whether to present the recommendations as a standalone bill in Congress or to incorporate them into an existing legislative proposal under consideration. “What we are proposing here is very reasonable and balanced,” remarked Economic Reforms Secretary Marcos Pinto during a press conference. He expressed optimism that action on this matter could be expected by the end of the year.

Pinto emphasized that the goal of the proposed reforms is not to hinder innovation or create unnecessary bureaucratic hurdles. “What we want is to uphold a fundamental value in the economy, which is competition,” he stated. The government’s commitment to fostering a competitive landscape underscores its recognition of the evolving dynamics of the digital marketplace and the need for regulatory frameworks that can adapt accordingly.

Source: Reuters