CSIS this week released a new commentary arguing that Brazil’s proposed Fair Competition Act for Digital Markets offers a flexible, context-sensitive alternative to the EU’s Digital Markets Act by empowering CADE to designate systemically relevant firms and tailor obligations accordingly, but this same flexibility risks creating regulatory uncertainty that could deter investment.
The commentary states that for the bill to succeed as a model for other economies, its proponents must do further work to establish a predictable business environment that encourages investment in Brazil’s technology sector.
CSIS writes:
Brazil’s Fair Competition Act for Digital Markets represents a bold attempt to restructure the country’s digital competition landscape. Its defining feature—regulatory flexibility—creates both opportunities and risks. Proponents of the bill credibly argue that flexibility is necessary in rapidly evolving digital markets and that rigid ex ante rules risk becoming quickly outdated. However, the current text of the bill leaves many open questions about how CADE would use the broad authorities it would stand to gain. Even if these authorities are ultimately used sparingly, current uncertainty could have a tangible economic cost.
Read the full commentary: Unpacking Brazil’s latest effort to regulate digital markets