After nearly a year of discussions, the Federal Government has just submitted to the National Congress a bill that amends Law No. 12,529/2011 and creates a new regulatory regime for economic agents considered of systemic relevance in digital markets. The proposal places Brazil within a global trend of creating legal instruments aimed at limiting the gatekeeping power of large technology groups. Although it has its own characteristics, the Brazilian proposal is explicitly inspired by projects such as the European Union’s Digital Markets Act (DMA) and the competition reforms of the United Kingdom and Germany.[1]
The legislative proposal establishes a three-tiered system: first, CADE may designate companies as “systemically relevant” based on qualitative and quantitative criteria, which automatically triggers a set of general administrative obligations. Second, it opens the possibility of imposing specific and calibrated “special obligations” on certain products or services of the designated company. These obligations may only be determined through a specific administrative procedure, conducted by the new Digital Markets Superintendence and decided by CADE’s Tribunal. If there is suspicion of noncompliance, the Digital Markets Superintendence, at a third level, may initiate a specific administrative proceeding to impose sanctions – similar to procedures for violations of competition law.
Unlike the DMA model, which focuses on the designation of specific services classified as core platform services (CPS), the Brazilian proposal adopts a broader institutional approach: the designation falls on entire economic groups that meet qualitative and quantitative criteria of systemic relevance. This choice broadens the scope of regulation and acknowledges that market power in digital ecosystems stems from the combination of multiple activities and integrations.
Below are the main relevant points of the bill:
- New institutional unit – Digital Markets Superintendence: the bill creates, within CADE, a new Superintendence specialized in digital markets, responsible for initiating and handling proceedings for the designation of systemically relevant agents and the imposition of special obligations. The Superintendent will serve a two-year term, renewable once, and will be appointed by the President of the Republic after Senate approval. The structure is inspired by the current General Superintendence but focuses specifically on the ongoing monitoring of digital platforms, with powers to request information and oversee compliance with imposed obligations. This specialization aims to strengthen CADE’s technical capacity in light of the competition challenges posed by the digital economy.
- Guiding principles: CADE’s actions in digital markets will be guided by three central objectives: (i) reducing barriers to entry; (ii) protecting the competitive process; and (iii) promoting freedom of choice. There may be here a deliberate omission of the “consumer welfare standard” long used in competition law. On the other hand, the concepts of “fairness” or “justice,” which appear in the European DMA, are also absent.
- Criteria for designating systemically relevant companies: designation can only occur when a company simultaneously meets both qualitative and quantitative criteria.
- Qualitative criteria: the presence of any one of the following elements suffices: (i) operating in one or more multi-sided markets; (ii) market power linked to network effects; (iii) vertical integration and presence in adjacent markets; (iv) strategic position for third-party activities; (v) access to large volumes of relevant personal and commercial data; (vi) a significant base of professional and end users; or (vii) offering multiple digital products or services.
- Quantitative criteria: the company must have recorded, in the previous fiscal year, global gross revenue exceeding BRL 50 billion or gross revenue in Brazil exceeding BRL 5 billion.
This framework seeks to capture large digital platforms with structural features that grant them gatekeeper positions, while limiting the scope of regulation to avoid encompassing smaller firms. At the same time, the breadth of the qualitative criteria may create uncertainty as to which companies would be subject to designation. Traditional but digitalized players, such as banks and credit card networks, operate in markets with network effects, vertical integrations, multi-sided dynamics, and broad data access. However, as these companies are not native to digital ecosystems, it is unclear whether they would be included. International experience would suggest not: so far, designations made by the European Union and Germany have only applied to inherently digital companies.
Designation, once made, will be valid for up to 10 years and may be renewed through a new administrative process.
- Designation procedure: may be initiated ex officio or through a complaint. The Digital Markets Superintendence must issue a recommendation within 180 days; the case is then judged by CADE’s Tribunal, which has up to 120 days to schedule it. The designation is valid for 10 years, renewable, and covers the entire economic group. The bill also provides for a fast-track procedure: if no further evidence is needed, the Superintendence must forward the case to the Tribunal within 30 days after the company’s defense. This dynamic balances in-depth analysis with speed. Additionally, the text applies Law No. 8,437/1992, limiting the granting of injunctions against CADE’s decisions and reinforcing the stability of measures.
- General obligations: designated companies must maintain an office in Brazil, regularly update contact information, and register legal representatives with CADE. These administrative obligations apply automatically without the need for further decisions.
- Special obligations: may be imposed through a separate administrative procedure, decided by CADE’s Tribunal following a recommendation from the new Digital Markets Superintendence. These obligations will target specific services/products of designated companies, analyzed and decided separately. They may include:
- Mandatory notification of all mergers and acquisitions, regardless of usual thresholds;
- Transparency regarding terms of use, ranking criteria, and pricing structures;
- Prohibition of exclusionary practices, self-preferencing, tying, restricting access to inputs/users, or predatory strategies;
- Positive obligations such as free data portability, interoperability, freedom to install third-party apps, access to data and performance metrics, modification of default settings, effective complaint mechanisms, and equal conditions for service offerings.
- Efficiency analysis in imposing special obligations: although the bill does not explicitly mention efficiency analysis, it provides that, when imposing special obligations on systemically relevant agents, CADE may consider certain service-related factors. Article 47-C, §2 lists three: (i) product/service aspects aimed at information security; (ii) compliance with applicable legal and regulatory obligations; and (iii) features enhancing the core functionality of the agent’s digital ecosystems. In addition, Article 87-B requires that imposing special obligations must always be preceded by an analysis of the economic impact of the decision.
- Application of special obligations: obligations take effect 60 days after the Tribunal’s decision and may be reviewed if significant market changes occur. The Superintendence may conduct designation and special obligations procedures in parallel, speeding up enforcement, though this raises due process concerns since companies could face overlapping proceedings.
- Noncompliance proceedings and sanctions: failure to comply with special obligations triggers the same penalties provided in the Competition Law for antitrust violations: fines ranging from 0.1% to 20% of gross revenue. In addition, daily fines may be imposed in case of continued infringement. This framing shows the legislator’s intent to equate regulatory violations in digital markets with classic antitrust infringements.
- Compliance reports: designated companies must periodically submit reports detailing compliance with imposed obligations. CADE may also require the hiring of an independent auditor, at the company’s expense, to certify compliance. This requirement brings the digital markets regime closer to regulatory compliance models already present in other sectors, such as finance. The Digital Markets Superintendence will publish the reports while the obligations remain in force, maintaining legal confidentiality where applicable.
- Powers and allocation of responsibilities: CADE’s General Superintendence will remain responsible for merger review and cartel/conduct cases, even when involving designated companies. The new Digital Markets Superintendence, however, will be competent for unilateral conduct cases by systemic agents. Ongoing cases related to designated platforms would be transferred to the new unit, strengthening specialization and avoiding overlap.
- Participation of SEAE and other agencies: the bill establishes the active participation of the Secretariat for Economic Monitoring (SEAE) and other public administration bodies that hold jurisdiction over digital markets or over the protection of diffuse and collective rights in the new procedures to be established. In this sense, these bodies would have the authority to: (i) report to CADE the noncompliance with special obligations; (ii) conduct impact assessments of such obligations, with recommendations for potential adjustments; (iii) submit complaints that would trigger the immediate initiation of administrative proceedings for the designation of an economic agent of systemic relevance in digital markets or for the imposition of special obligations; and (iv) be admitted in the proceedings initiated after their complaint, being formally notified to perform procedural acts.
- Public hearings: according to the bill, CADE’s Tribunal would have authority to convene public hearings to hear statements from citizens, experts, companies, and civil society organizations. These hearings should also take place (i) prior to CADE drafting regulations on the procedures established in the bill; and (ii) after the issuance of a preliminary opinion by the Digital Markets Superintendence in proceedings for the designation of agents of systemic relevance.
- Judicial review: the bill applies Law No. 8,437/1992, which governs the granting of precautionary measures against government acts, to CADE Tribunal decisions under the new procedures. In this case, judicial challenges would face certain limitations: (i) injunctions would not be granted if they fully or partially exhaust the subject of the action; (ii) CADE must be heard before any urgent relief is granted; and (iii) presidents of the competent courts may suspend injunctions granted against CADE. These provisions are not usual in ordinary judicial proceedings.
It is still early; during the bill’s passage through Congress, the text may be revised and altered in several respects. In any event, all the rules proposed would change the paradigm of competition enforcement in digital platforms. Companies designated as systemically relevant for digital markets could become subject to proceedings imposing customized obligations aligned with their specific services.
In designation and obligation-imposing proceedings, CADE – and its potential new Digital Markets Superintendence – must act cautiously. The goal should effectively be to (i) reduce barriers to entry; (ii) protect the competitive process; and (iii) promote freedom of choice. Excessive obligations or those misaligned with platforms’ business models may generate unintended side effects. Striking the balance between fostering competition and preserving incentives for innovation will be the challenge of the regulatory regime proposed in the bill.
[1] Digital Markets, Competition and Consumers Act (DMCC) in the United Kingdom and 11th amendment to Germany’s Competition Act.
