Brazil’s government on Thursday recommended reforming its competition law that would allow antitrust body CADE to label certain digital platforms as systemically relevant, subjecting them to new obligations if necessary.

Why it matters

Brazil’s finance ministry says local legislation must be equipped with more tools to deal with the new reality in which big tech companies, because of their size and market power, hold back competition.

The government cites practices such as exclusivity agreements, “killer acquisitions” and self-preference, where a company’s own products or services appear first in Internet searches.

details

The new requirements would include pre-merger notifications, transparency rules for end users and companies regarding commercially relevant information about the use and offering of services and products, and a mandate to disclose changes to the service or terms.

Additional wallpapers

The government said the proposed legislative change is a middle ground between the US and European Union (EU) models for regulating large technology platforms, drawing inspiration from practices adopted in Japan, the United Kingdom and Germany.

What’s next

For the changes to take effect, the government must decide whether to submit the recommendations as new legislation to Congress or introduce replacement text that could be incorporated into an existing bill already under consideration.

Key quotes

“What we are proposing here is very reasonable and balanced,” Economic Reforms Secretary Marcos Pinto said at a news conference, adding that he anticipates action on the issue by the end of this year.

“Our goal is not to hinder innovation, impose unnecessary costs or create bureaucracy where it is not needed. What we want is to support the core value in the economy, which is competition.”

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