Brazil could soon regulate Big Techs

The alphabet soup of digital law is getting a new acronym.

The topic of the moment in the European summer is the Digital Markets Services Act (DMA), which aims to modernize the E-Commerce Directive on illegal content, transparent advertising, and misinformation.

And this “fashion” will likely reach Brazil because it is a relevant regulatory framework for the “big techs“.

The DMA is a regulation that establishes rules for digital platforms’ offered and used services to create a more open and safe environment.

Among the prominent rules are those for “gatekeepers”, companies that provide core platform services and serve as a bridge between a third company and the end user, such as marketplaces, social networks, and search engines.

This regulation, proposed by the European Union (EU) in 2020, has not been the subject of consensus among EU member states since its inception, although it is currently a trend.

France, Belgium, and the Netherlands were in favor of the regulation. In turn, Germany considered the current provisions of the proposal insufficient and criticized the European Commission’s centralized approach in the MAD, pushing for a stronger role for national competition authorities.

In the same trench, the Irish government declared unwilling to evaluate the definition of “gatekeepers” because the mere occupation of a dominant market position alone would not constitute illegality.

However, in July 2022, the European Parliament accepted the proposal, which now awaits approval by the European Council[8] and publication in the Official Journal to start the six-month deadline for the platforms to adapt and regularize.

It is not only a European movement but a global one. Also, in 2021, the Organization for Economic Cooperation and Development (OECD), composed of 38 member countries, published the study “Ex Ante Regulation and Competition in Digital Markets”.

It analyzes the main regulatory initiatives of its members for digital platforms, such as those of Australia, Germany, France, Italy, Japan, England, and the United States, besides the EU.

In the same vein, in March 2022, the Asia-Pacific Economic Forum published the report “Competition Law and Regulation in Digital Markets”, which addresses the online competition market and regulatory problems in the sector, analyzing how other countries, including the EU, are dealing with the issue, which will serve as guidelines to its 21 member states.

Having done this brief contextualization, analyzing the main rules laid out in the MAD for gatekeepers and their legal implications is necessary. Below are the main ones:

• Prohibition of combining personal data collected on the platforms with any other personal data from offered services, including from third parties, and from connecting end users to other services offered by the gatekeeper that aims to combine personal data, except when obtaining specific consent from the user for this purpose;
• the possibility for business users to offer the same products or services that the intermediation platforms offer, including at different prices and conditions than those offered by the gatekeeper to end users
• prohibition for gatekeepers to prioritize their own products to the detriment of similar products from third parties, to apply rating parameters with isonomic and non-discriminatory conditions;
• obligation to provide, at the request of the advertisers and publishers to which it provides advertising services, information on the price paid for the publication of an advertisement and each of the relevant advertising services provided by the gatekeeper;
• guarantee advertisers and publishers free access to performance measurement tools, enabling verifiable information to be obtained independently from the ad inventory;
• prohibiting or restricting user companies from raising issues relating to gatekeeper practices with any public authority;
• an obligation to allow end users to uninstall pre-installed applications;
• obligation to ensure compatibility of third-party applications with the gatekeeper’s operating system by allowing these applications and application stores to be accessed through various means.

Although the DMA is intended to regulate the activity of the group of tech giants better known as GAFAM (Google, Apple, Meta – the new name of Facebook’s parent company – Amazon and Microsoft), as well as the new social network TikTok, it remains unclear which companies may be framed and required to comply with the DMA, and, more specifically, which companies may be considered gatekeepers.

That is because, despite the European regulation bringing objective criteria for classification, which would inevitably inspire the Brazilian legislator, the scenario of variety and complexity of the business models adopted by digital platforms, not to mention the high pace of innovation that characterizes this market, imposes greater care.

A similar movement is expected in Brazil to that produced when the General Data Protection Regulation (GDPR) came into effect when European companies or companies with relationships with users on the European continent were required to adapt to the new dictates of the General Law of Personal Data Protection (LGPD) even before Brazilian companies that operated only on national soil.

In other words, just as the GDPR inspired the LGPD, notably because of its viral effect, the new European regulatory constraints will likely arrive here, which, if they do, will imply the need for national gatekeepers to review their policies and business models.

Thus, we understand that it is only a matter of time before Brazil regulates big techs.

With information from Jota