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The Regulation of Competition in Brazil: Comments on the Digital Markets Law Bill (PL 2768/2022)

Rafael Parisi

The bill presently under consideration in the Brazilian Congress, referred to as Bill No. 2768/2022 (hereafter “the Bill”), merits a reevaluation due to its potential adverse consequences on competition and innovation in Brazil. This is particularly true due to its potential to diminish the incentives for digital platforms to allocate resources towards the Brazilian economy with the aim of delivering superior products and services to consumers. The following comments to the Bill discuss its specific provisions that necessitate meticulous reconsideration and underscore the unintended consequences that would be associated with such a bill.

The Bill is a legislative proposal that was presented to the House of Representatives of Brazil on November 10, 2022. The purpose of the law is to govern digital platforms that are currently operating in Brazil, particularly those that have a large amount of market power. According to the proposed legislation, "essential access control power holders" are defined as big digital platforms that generate an annual revenue of at least two hundred million Brazilian reals. The platforms in question are subject to various obligations as a result of this categorization, which include requirements for transparency and documentation. They are also obligated to provide their customers with non-discriminatory treatment and to satisfy certain access criteria for business users. In addition, these platforms are required to pay an inspection charge that is equal to two percent of their yearly gross operational revenue. Moreover, the National Telecommunications Agency (ANATEL) has the authority to prohibit some economic activities and impose a punishment of up to two percent of the total national revenue on platforms that violate its regulations.

One of the primary objectives of the bill is to foster greater competition and equity within the digital markets of Brazil. It addresses issues pertaining to fair competition, consumer protection, and the confidentiality of personal information. However, the bill lacks a clearly defined normative foundation for the notion of "fair competition," which is presumed to exist within digital marketplaces.

Governments are increasingly attempting to regulate digital platforms to prevent violations of regulations pertaining to content moderation, competition, and data protection. This legislation is consistent with a worldwide trend. Comparable legislative measures have been enacted or suggested in alternative jurisdictions, including the Digital Markets Act (henceforth "DMA") of the European Union. The present comments contend that not only does the existing regulatory framework for digital platforms in Brazil adequately safeguard competition, but they also propose amendments to the Bill in the event that it is enacted despite the unintended negative repercussions on the Brazilian economy and consumers.

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