By Beatriz Torres, Ricardo Motta, Luiz Felipe Drummond and Nathalia Figueiredo.
1.Introduction
Nearly a year after Bill No. 4,675/2025 was introduced in the Chamber of Deputies, and following at least two years of intense debate on the pros and cons of ex ante regulation applicable to gatekeepers in digital markets, Brazil’s regulatory agenda on this issue is entering a new phase. On July 2, 2026, the bill’s rapporteur, Representative Aliel Machado (PV/PR), presented a Substitute Bill (“Substitute Bill”) containing several changes to the framework originally proposed.
Among other modifications, the Substitute Bill revises the criteria and procedures applicable to designation and to the imposition of special obligations. Some of these changes narrow the scope of regulatory intervention or provide additional procedural requirements. The resulting framework retains certain features found in international initiatives, including the European Digital Markets Act, the United Kingdom’s Digital Markets, Competition and Consumers Act, and Japanese regulatory models, while adopting a distinct institutional and procedural structure.
Beyond the detailed analysis of the original draft available in “The New Bill on Digital Markets in Brazil: Agents with Systemic Relevance and Possible Obligations”[1], the comparative table appended to this article identifies the principal changes introduced by the substitute bill[2].
2. Structural Changes
The Substitute Bill preserves the core feature of the original proposal: the incorporation into Law No. 12,529/2011, the Brazilian Competition Law, of a specific regime applicable to digital markets. While the original text already established a specialized body within the Administrative Council for Economic Defense (CADE) – initially named the Superintendence of Digital Markets (SDM) – the Substitute Bill renames it the Special Superintendence for Systemic Relevance, Free Competition, and Consumer Protection in Digital Markets (hereinafter “SRLC”). Although the Substitute Bill modifies certain elements of the proposed institutional structure, it maintains a dedicated framework for the designation and regulation of economic agents considered systemically relevant in digital markets. CADE would remain responsible for administering and enforcing the new regime through a specialized internal structure.
The Substitutive Bill also authorizes the establishing of a Digital Markets Competition Advisory Council to support CADE in matters relating to competition in the digital economy. At least half of the Council’s members must represent academic, scientific or research institutions, or nonprofit civil society organizations engaged in competition, the digital economy, consumer protection, digital rights or innovation. The Council’s statements, recommendations and reports would not be binding on CADE. Accordingly, the Council would have an advisory role, while decision-making authority would remain with the agency.
3. Regulatory governance: mechanisms for accountability, public participation, and technical improvement.
The Substitute Bill also modifies the regulatory governance provisions contained in the original proposal. New Article 87-J requires CADE to establish participatory mechanisms in proceedings and procedures relating to digital markets. These mechanisms may include public consultations, public hearings, technical meetings, expert opinions and submissions from interested parties. By upgrading these tools, the bill formally binds CADE to a participative ex-ante rulemaking process, similar to that of a traditional regulatory agency. The provision also requires participants to disclose their economic, institutional or representative interests, as well as relevant relationships, funding arrangements or other forms of support connected with their participation.
In parallel, the bill provides for appropriate channels and procedures for the receipt and confidential handling of information, in compliance with legal confidentiality requirements. The text recognizes that the effectiveness of public participation depends on the ability to submit relevant technical, economic, and commercial information without compromising the protection of trade secrets and sensitive data.
The Substitute Bill also creates a digital market analysis procedure under Article 87-K. This non-enforcement procedure would allow CADE to assess the competitive dynamics of digital markets, ecosystems, services, or activities. It may be used to identify characteristics, trends, and factors that could affect competition; inform designation proceedings; guide the establishment, review, or revocation of specific obligations; and evaluate the effectiveness, proportionality, and competitive effects of measures already imposed. In this way, the Substitute Bill adds a tool for continuous regulatory learning to the Brazilian framework.
The Substitute Bill states that its conclusions do not, by themselves, result in the designation of an economically significant agent, the imposition of special obligations, or the application of sanctions.
The Substitute Bill also provides that a digital market analysis is not a mandatory preliminary stage, an admissibility requirement or a condition for initiating designation or special-obligation proceedings. CADE may therefore initiate such proceedings without first completing a market analysis.
4. Designation and Imposition of Special Obligations: Highlights
The Substitute Bill maintains, in general terms, the three-tiered procedural system already established in the original bill: the process for designating systemically important economic agents, the process for establishing special obligations, and the sanctioning process for any noncompliance with those obligations.
However, significant changes have been introduced, notably:
(i) designation decisions and special obligations must refer to specified digital products, services or categories;
(ii) the requirement to notify all transactions involving systemically relevant agents is replaced with an information obligation for certain non-notifiable transactions;
(iii) CADE is required to comprehensively analyze and weigh all the qualitative designation criteria during its assessment; and
(iv) the list of prohibited practices (negative obligations) was expanded to include rules against “dark patterns,” expressly forbidding interface designs or operations that subvert user autonomy, decision-making, or free choice.
Accordingly, the Substitute Bill clarifies that designation does not automatically result in the imposition of special obligations. Substantive obligations must be established in a separate proceeding. As a result, designated economic agents would not necessarily be subject to the same obligations. CADE would determine, in each proceeding, which obligations apply to the products, services or categories covered by its decision. This shift is consistent with the international trend toward tailor-made regulation, most explicitly observed in the UK’s Digital Markets, Competition, and Consumers Act. This approach also aligns with the European and Japanese models, which–despite their different institutional architecture–link regulatory oversight to previously defined services, categories, or functionalities.
The Substitute Bill also requires designation decisions to identify the products, services or digital platforms relevant to the designation. The Special Superintendence’s preliminary position must indicate, even on a preliminary basis, the products or services that support the proposed designation. CADE’s Tribunal must identify in its final decision both the factual grounds for designation and the products or services associated with those grounds.
Although the designation continues to apply to the whole economic group, this requirement introduces a key element of material limitation, reducing the risk that systemic relevance will be asserted in an overly abstract manner. A practical example of this dynamic can be seen in the DMA: while the European Commission designated Apple’s entire corporate group as a gatekeeper, its actual regulatory interventions strictly target specific services, such as App Store, that serve as important gateways. Consequently, adjacent services within the group, such as Apple Maps and Apple Adds, are excluded from the scope of obligations[3].
The same occurred with Microsoft[4]: while the corporate group is designated as a gatekeeper, its strict ex-ante obligations are legally confined to its specifically identified Core Platform Services (CPS)–namely, Windows and LinkedIn. Other prominent services within Microsoft’s ecosystem, such as Bing, Edge, and Microsoft Advertising, were explicitly excluded from designation.
In sharp contrast, under the German model set forth in § 19a of the GWB, the designation applies to the entire economic group and encompasses various activities within its ecosystem, even when not all of them, taken individually, were decisive in establishing its significance. Thus, services such as iCloud, Apple Music, and Apple TV+, in the case of Apple; or Prime Video, Amazon Music, and Audible, in the case of Amazon, may remain subject to further action by the Bundeskartellamt due to the broad designation applied. Under the proposed wording for the Brazilian model, these services would tend to fall outside the initial scope if the designation decision identified only, for example, iOS and the App Store, or Amazon Marketplace as the applicable products or services. Their inclusion would therefore require specific justification regarding the relevance of each service; a mere connection to the same economic group would not be sufficient.
4.1. Designation of a systemically relevant agent
The Substitute Bill retains the main quantitative parameters of the original bill: total worldwide annual revenue exceeding R$ 50 billion or annual revenue in Brazil exceeding R$ 5 billion. The innovation lies in the provision for annual adjustment of these amounts in line with the IPCA index, which provides greater stability over time for the thresholds and reduces the risk of regulatory lag.
With regard to the qualitative criteria, the Substitute Bill preserves the logic of multifactorial analysis but reorganizes the criteria to emphasize operations in multi-sided markets, network effects, integration into digital ecosystems, dependence on third parties, access to and combination of relevant data, and acting as an access controller.
Another important change concerns the period of validity and revision of the designation. The period of valid designation is reduced from ten to six years, and the Substitute Bill now expressly provides for the possibility of a review two years after the CADE Court’s decision, through a new administrative proceeding, when there are significant changes in the market that indicate a material change in the competitive conditions that justified the designation. This provision is well-suited to the dynamics of digital markets, where cycles of innovation, market entry, expansion, or the loss of relevance of certain services can rapidly alter the competitive position of market participants.
4.2. Imposition of Special Obligations on Systemically Relevant Agents
In the process of establishing special obligations, the Substitute Bill reinforces the requirement of proportionality. CADE must consider innovation, particularly with regard to small businesses, and the public interest associated with the competitive development of digital markets. These new parameters aim to prevent excessive intervention, especially when a regulatory obligation may affect legitimate functions and innovative business models.
The Substitute Bill also improves legislative technique by organizing special obligations into three categories:
(i) obligations related to transparency, information, and reporting;
(ii) positive obligations; and
(iii) obligations of abstention.
This systematization makes the framework more comprehensible and helps to define the regulatory provisions to be imposed in each case.
Among the substantive changes, one that stands out is the replacement of the mandatory filing of all mergers carried out by systemically relevant agents with a solely informative obligation. This obligation would apply to those transactions that do not meet the legal criteria for mandatory notification to CADE. This solution preserves transparency regarding strategic moves by designated entities, while avoiding overburdening the competition authority with mandatory notifications of transactions with low anti-competitive potential. Crucially, this informative system operates alongside CADE’s call-in powers, which allow the authority to demand formal review of any transaction if competition concerns arise.
Regarding obligations, the Substitute Bill adds a new ground for abstention, related to the deterioration of the conditions or quality of services provided to business or end users who exercise their rights that arise from special obligations. Furthermore, it also prohibits the designated agent from making it excessively difficult to exercise such rights, including through non-neutral design choices or interfaces capable of undermining users’ decision-making autonomy. This provision addresses contemporary concerns regarding regulatory avoidance practices, manipulative design, and the real-world weakening of the effect of legally guaranteed rights.
5. Voluntary Proposals of Special Obligation
The Substitute Bill also introduces a voluntary proposal mechanism, enabling the party targeted by the proceedings to proactively shape its special obligations. The proposal may include an implementation plan, technical parameters, operational measures, monitoring mechanisms, compliance timelines, or other measures designed to ensure the law’s objectives are met. Although non-binding, this mechanism fosters technically calibrated and realistic solutions, steering the procedure toward co-regulation and regulatory dialogue. Crucially, unlike the Terms of Commitment to Cease (TCC)–which are reactive instruments designed to resolve investigations into alleged anticompetitive conduct– this mechanism is entirely preventive. It operates independently of any suspected antitrust violations, serving solely to help design, adapt, or refine ex-ante obligations.
6. Simultaneous processing of the designation and obligation-imposition proceedings.
The original bill permitted designation proceedings and special-obligation proceedings to be processed simultaneously. The Substitute Bill retains this possibility but requires a reasoned finding of urgency related to the promotion or protection of competition. Accordingly, CADE would need to provide a specific justification before combining the two proceedings. In the absence of such urgency, designation and the imposition of special obligations would proceed separately.
7. Deadlines and Procedures
Finally, the Substitute Bill revises the procedures for designating a relevant agent and establishing special obligations.
Accordingly, CADE would need to provide specific justification before combining the two proceedings. In the absence of such urgency, designation and the imposition of special obligations would proceed separately. A complaint filed by the Secretariat for Economic Monitoring (SEAE), or by any federal government agency or entity with jurisdiction over digital markets or the protection of diffuse and collective rights, will trigger the immediate initiation of an administrative proceeding.
After initiation, the respondent will be notified to file a response within thirty days, which may be extended by up to ten days.
In the specific case of a designation, the initiation of the proceeding will be accompanied by the opening of a call for input, also for a period of thirty days, allowing third parties to submit contributions since the beginning of the investigation. Once the statements have been received, the SRLC may forward the case directly to the Court if it deems further investigation unnecessary, or it may order additional investigative measures. Upon completion of the investigation, the SRLC must publish a preliminary opinion, which will be subject to a public hearing before the final opinion is drafted and the case file is forwarded to the Court.
Regarding procedural deadlines, the Substitute Bill distinguishes between designation proceedings and proceedings to establish special obligations. In designation proceedings, any supplementary investigation must be completed within 30 days–a non-extendable period; whereas in proceedings to establish special obligations, this deadline may be extended once for an equal period. The bill also increases the maximum deadline for the automatic referral of case files to CADE’s Tribunal from 180 days to 210 days for designation or review of designation proceedings, and to 240 days for the establishment or review of special obligations. Once at the Tribunal, the reporting commissioner must place the case on the court’s agenda within 60 days in the case of designation, and within 120 days in the case of the establishment of special obligations. The Substitute Bill also regulates requests for viewing, limiting them to 30 days, granting them collective status, and requiring the automatic inclusion of the rapporteur’s vote in the subsequent session.
8. Noncompliance proceedings and sanctions
The Substitute Bill retains the provision for a specific administrative proceeding to investigate noncompliance with the special obligations imposed on systemically relevant agents in digital markets. It also limits CADE’s supplementary regulatory authority regarding deadlines and procedures. The bill states that supplementary regulations may not establish new obligations, sanctions or designation criteria beyond those provided by law.
Noncompliance with these special obligations may result in the application of the penalties already provided for in Law No. 12,529/2011 for violations of economic order, including fines ranging from 0.1% to 20% of gross revenue, as well as a daily fine in the event ongoing infractions.
Additionally, the Substitute Bill introduces continuous monitoring mechanisms, including the periodic submission of compliance reports by designated agents and the option to engage, at the company’s expense, an independent auditor selected or approved by CADE. As a result, the regime combines enforcement through sanctions with typical regulatory compliance tools.
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[1] MOTTA, Ricardo; DRUMMOND, Luiz Felipe. The New Bill on Digital Markets in Brazil: Agents with Systemic Relevance and Possible Obligations. [S. l.]: Grinberg Cordovil Advogados, 18 set. 2025. Disponível em: https://gcalaw.com.br/the-new-bill-on-digital-markets-in-brazil-agents-with-systemic-relevance-and-possible-obligations/.
[2] Available at: APPENDIX – BILL 4.675 (4)
[3] EUROPEAN COMMISSION. Commission decision of 23 April 2025 designating Apple’s iPadOS as a core platform service pursuant to Regulation (EU) 2022/1925 of the European Parliament and of the Council on contestable and fair markets in the digital sector. Case DMA.100014. Brussels: European Commission, 2025. Disponível em: https://ec.europa.eu/competition/digital_markets_act/cases/202612/DMA_100014_163.pdf
[4] EUROPEAN COMMISSION. Commission Decision of 5 September 2023 designating Microsoft as a gatekeeper pursuant to Regulation (EU) 2022/1925 of the European Parliament and of the Council on contestable and fair markets in the digital sector (Cases DMA.100015 – Online search engines; DMA.100028 – Web browsers; DMA.100034 – Online advertising services). Brussels: European Commission, 2023. Disponível em: https://ec.europa.eu/competition/digital_markets_act/cases/202416/DMA_100015_700.pdf
