1. The Justifications for the New Regulatory Measures

The Ministry’s report provides a comprehensive review of the current state of digital platforms, emphasizing the significant role they play in connecting consumers, service providers, and advertisers. According to the report, platforms benefit from strong network effects, meaning that their value grows as more users join. This same dynamic has led to market dominance by a few large players, limiting competition and raising concerns about data privacy.

Drawing from international examples, the report compares the Brazilian proposal to regulatory models in the United States, the European Union, the United Kingdom, and Japan. It concludes that current antitrust laws are insufficient to address the unique challenges posed by digital platforms. In response, the Ministry opted for a hybrid regulatory approach that combines preventive measures seen in Europe with reactive mechanisms that are, in principle, more flexible and adaptable to each platform and/or specific service provided to users.

The report indicates that the proposals will be presented to Congress in the coming months, possibly through a government-backed bill. Legislative changes are essential to grant CADE, Brazil’s competition authority, the power to designate certain platforms as “gatekeepers” (or, in the adopted terminology, systemically relevant platforms) and to impose specific obligations on them.

2. Key Proposals from the Report

The Ministry’s report includes several key proposals, summarized below:

Proposal 1: Designating Systemically Relevant Platforms

A new legal instrument will allow CADE to designate systemically relevant economic agents in digital markets based on a combination of qualitative and quantitative criteria. This designation will identify platforms that possess significant market power due to their size, user base, and role in multi-sided markets.

• Qualitative criteria: Platforms with strong network effects, multi-sided markets, access to large amounts of personal and commercial data, and the provision of multiple digital services will be considered.
• Quantitative criteria: Minimum revenue thresholds will ensure that only large economic players are subject to designation, avoiding overregulation of smaller companies.
• Designation process: The process can be triggered by CADE or third parties, including civil society organizations, with all decisions subject to approval by CADE’s Tribunal.

Proposal 2: Substantive obligations

Once designated, the platforms may be subject to general and specific obligations, as assessed by CADE. These obligations aim to ensure fair competition and provide clarity to consumers and other stakeholders.

• General obligations: Designated platforms may be required to notify CADE of any mergers or acquisitions and adhere to transparency requirements related to their services and products.
• Specific substantive obligations: These can include both positive and negative requirements, such as modifying business practices, ensuring data access to third parties, and enabling interoperability with other platforms. Platforms may also be restricted from self-preferencing, a practice where they prioritize their own services over those of competitors.
• Monitoring and compliance: Platforms will need to provide regular reports to CADE, demonstrating compliance with both general and specific obligations.

Proposal 3: Modifications to CADE’s structure

CADE will have the authority to impose obligations on designated platforms based on a thorough investigation of each company’s business model. These obligations will be tailored to address the specific risks posed by each platform. A specialized unit within CADE should be created to manage the designation process and monitor the obligations imposed on these platforms. This unit will collaborate with other regulators, such as ANATEL (the telecommunications agency) and ANPD (the data protection authority), to ensure sector-specific compliance.

3. The full list of proposals

The proposals focus on establishing new legal instruments for designating systemically relevant platforms and adjusting existing antitrust tools to better address the unique challenges posed by the digital economy. According to the report and the speeches during the press conference, these measures aim to enhance competition, transparency, and regulatory oversight in multi-sided markets, ensuring that platforms with significant market power are subject to appropriate scrutiny and obligations.

The proposals also emphasize the importance of collaboration between regulatory bodies to ensure effective enforcement and compliance in the rapidly evolving digital landscape.

Group 1 – New Instrument for Promoting Competition in Systemically Relevant Platforms

• Proposal 1: Establish a procedure for designating systemically relevant platforms based on qualitative and quantitative criteria, such as multi-sided markets, network effects, and revenue thresholds.
• Proposal 2: Introduce procedural and transparency obligations for designated platforms, including prior merger notifications and transparency in services and terms of use.
• Proposal 3: Allow CADE to investigate designated platforms and impose specific substantive obligations to address competition concerns.
• Proposal 4: Create a specialized unit within CADE to implement and monitor the new pro-competitive tool for designated platforms.
• Proposal 5: Implement substantive obligations in collaboration with regulators like ANATEL and ANPD to address technical and sector-specific concerns.
• Proposal 6: Strengthen CADE’s capabilities for conducting market studies, granting proactive analysis power to the Department of Economic Studies.
• Proposal 7: Create an inter-institutional cooperation forum between CADE and other federal bodies to facilitate information exchange and collaboration on digital market issues.

 Group 2 – Adjustments to the Application of Antitrust Tools for Platforms in General

• Proposal 8: Update antitrust analysis tools to incorporate network and ecosystem analyses for assessing competitive risks in digital platforms.
• Proposal 9: Revise CADE’s merger notification form to include specific questions on digital market dynamics, such as network effects and data use.
• Proposal 10: Adopt the ordinary process for analyzing mergers involving digital platforms with a large number of users, allowing for deeper analysis.
• Proposal 11: Use the flexibility of Law 12,529/2011 to require merger submissions that pose competitive risks, even if they do not meet notification criteria.
• Proposal 12: Update revenue thresholds for prior merger notifications to focus CADE’s resources on transactions with greater competitive impact.

4. Looking Ahead

The Ministry emphasized that this regulatory framework aims to create a balanced approach, ensuring that digital platforms contribute to a competitive, transparent, and fair market in Brazil. The proposals will undergo further scrutiny once presented to Congress, and the Ministry anticipates that discussions will continue in the coming months.

O conteúdo Brazilian Ministry of Finance Proposes New Regulatory Framework for Digital Platforms aparece primeiro em Grinberg Cordovil Advogados.

According to the decision, the Sindicato dos Artistas e Técnicos de Espetáculos e Diversões do Estado de São Paulo (Sated/SP) (The Artists and Technicians of Shows and Entertainment Union of the State of São Paulo), the investigated entity, has established minimum professional rates for hiring voice-over artists and directors, in the form of collective labor agreements. In addition, Sated/SP would also be foreclosing the market by illegally requiring registration of these professionals and resorting to threats and coercive methods, such as boycotts and strikes, to ensure compliance with such agreements.

The lawsuit originated from a complaint filed by the Sindicato da Indústria Audiovisual do Estado de São Paulo (Siaesp) (Audiovisual Industry Union of the State of São Paulo), in connection with a discussion held in the Brazilian Labor Justice, regarding the existence of employment relationship between dubbing artists and the studios. According to the GS/CADE, once ruled that there is no employment relationship between them, there would be no legal basis for Sated/SP to impose minimum rates table and other conditions for hiring via collective bargaining.

Thus, according to the GS/CADE’s decision, Sated/SP should refrain from elaborating and updating tables, collective agreements, or any other document that determines minimum hiring rates or that promotes and discloses rates related to fees for dubbing services. Moreover, it should also refrain from imposing any requirements for future hiring of these professionals, except in the case of an employment relationship. In such cases, the SG/CADE understands that the union has the legal authority to carry out such practices.

This investigation enhances the antitrust authority’s attention to potential anticompetitive conduct related to the labor market. Recently, CADE began an investigation into potential illegal conduct involving employees in the HR departments of dozens of companies. This investigation is examining anticompetitive conduct in the labor market dealing with the product industry, equipment, and healthcare related services.

The complete Technical Note can be accessed through this link.

O conteúdo CADE imposes preemptive measures in the dubbing market aparece primeiro em Grinberg Cordovil Advogados.

The measure was adopted in response to the safeguards applied by Costa Rica on August 18, 2020, through Resolution DM-073-2020-MEIC,[3] against imports of solid, granular sugar, known as white sugar, used for both domestic consumption (commercial) and industrial consumption.

The additional percentage adopted by the Brazilian government establishes an increase of 27.68% to the import tax on these four products from Costa Rica and provides a schedule for a gradual reduction of the additional percentage applied by2023, following the system established in the safeguard measure adopted by Costa Rica.

In a published Joint Statement, the Ministries of Economy, Foreign Affairs, and Agriculture, Livestock and Food Supply[4] explained that the Brazilian Government sought to negotiate an agreement that would avoid restrictions on bilateral trade with Costa Rica, which has not been possible until now. Moreover, according to the Statement, the measure adopted by Costa Rica affects Brazilian exports of $3.7 million dollars per year. The measure adopted by Brazil, on the other hand, has fallen back on exports from Costa Rica in the amount of approximately $950 thousand dollars, which can be withdrawn or complemented, according to the evolution of the negotiations between the two countries.

[1] Available at https://www.in.gov.br/web/dou/-/resolucao-gecex-n-120-de-16-de-novembro-de-2020-288535752

[2] The products affected by the suspension adopted by Brazil are: other animal substances, for the preparation of pharmaceutical products (NCM 0510.00.90); other chocolates and food preparations containing cocoa (NCM 1806.90.00); extracts, essences and concentrates and preparations based on these extracts, essences and concentrates, based on teas (NCM 2101.20.10); and condiments and seasonings, composed, in immediate packages of content less than or equal to 1 kg (NCM 2103.90.21).

[3] Available at http://reventazon.meic.go.cr/informacion/gaceta/2020/agosto/DM-073-2020.pdf

[4] Available at https://www.gov.br/economia/pt-br/canais_atendimento/imprensa/notas-a-imprensa/2020/novembro/medidas-adotadas-no-comercio-com-a-costa-rica

O conteúdo Measures taken against Costa Rica’s Safeguard aparece primeiro em Grinberg Cordovil Advogados.

Read the full article by Ricardo Casanova Motta and Julia Krein: Facebook/WhatsApp Case: The Fine that was (not) imposed by the European Commission

O conteúdo Facebook/WhatsApp Case: The Fine that was (not) imposed by the European Commission aparece primeiro em Grinberg Cordovil Advogados.

Read the full version wrote by Ricardo Casanova Motta and Catarina Lobo Cordão: Cade’s Resolution 24/2019: a new parameter for gun jumping’ fines?

The article was published by the portal Jota. Access here.

O conteúdo Cade’s Resolution 24/2019: a new parameter for gun jumping’ fines? aparece primeiro em Grinberg Cordovil Advogados.

Read the full version wrote by Ricardo Casanova Motta and Julia Krein: The new law of regulatory agencies approved

O conteúdo The new law of regulatory agencies approved aparece primeiro em Grinberg Cordovil Advogados.

The support means that Brazil’s accession to the OECD should face less opposition, although it does not mean its immediate approval, since the official accession procedure (which entails a series of legislative and institutional changes, with an increasing adhesion to the organizations’ documents) had not yet started, and there are other candidates which should start it before Brazil, such as Argentina and Romania.

The OECD is an international organization currently composed by 36 “developed” countries, whose goal is to increase the dialog and institutional convergence between its members, with the goal of providing incentives for public policies that promote lasting economic growth and development for its members. OECD accession is strategic for the Brazilian foreign policy, especially because it grants its members a type of “good practices” certification which can by its turn attract foreign investment and consolidate economic reforms. So far, there is no deadline for a final decision on the Brazilian accession to be reached.

By: Ricardo Motta, Julia Krein e Marília Borges

O conteúdo US announce their support to Brazil’s request to join the OECD aparece primeiro em Grinberg Cordovil Advogados.