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CNN Analysis Details Government’s “Intermediate Path” to Regulate Big Techs, Strengthening Authority Against Anticompetitive Practices
Brazil is defining its own path for the economic regulation of big techs, opting for an “intermediate path” that differs from the models adopted in the United States and Europe. The strategy, detailed in an analysis by experts to CNN, focuses on strengthening the Administrative Council for Economic Defense (Cade) as the “sheriff” of the sector. The proposal foresees the creation of a specific superintendency within the authority to monitor and combat anticompetitive practices of tech giants.
The decision to centralize this responsibility in Cade, according to lawyer Bruno Bastos Becker, a master’s graduate from USP and consulted by CNN, reflects the result of a public consultation by the Ministry of Finance. Most respondents indicated Cade as the most prepared agency for the task, ruling out the creation of a new agency or transferring the competence to Anatel. The expected impact is a model that seeks to balance innovation and control, without stifling the digital market.
The Global Dilemma: Intervene Before or Punish After?
The debate on how to supervise digital platforms is global and, according to Becker, divides the world into two main poles: ex-ante (preventive) regulation and ex-post (punitive) regulation. Brazil’s choice of a hybrid path attempts to extract the best from both worlds, but the challenge is complex and involves the rapid pace of technological innovation. The central discussion is where regulatory power should act: before the problem arises or only after an abuse has been identified.
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In an interview with CNN, the expert used a clear analogy to differentiate the models. “Imagine a digital platform as a virtual shopping mall. Ex-ante regulation works like rules set before the stores open their doors: it is already established that there cannot be blocked aisles, that each shopkeeper can choose the payment method, and that the mall owner cannot hide competitors to promote only their own store,” Becker compared.
“Ex-post regulation occurs afterward, when there is a complaint that the mall owner made it difficult for a store to enter or favored their own; then the authority investigates and, if it confirms the abuse, applies sanctions,” added the lawyer. This ex-post model is what prevails in the United States, where greater initial freedom is granted to platforms, focusing on investigation and sanction after the fact has occurred.
Why Was Cade Chosen as the “Sheriff”?
The choice of Cade was not random. As reported by CNN, the public consultation from the Ministry of Finance was decisive, as the agency already possesses a wealth of technical knowledge regarding the behavior of big techs. Crucial topics such as app stores, virtual payment systems, exclusive contracts, and self-preferencing (when a platform favors its own products) are already subjects of investigations and market analyses at the agency.
The bill, announced by President Luiz Inácio Lula da Silva, solidifies this choice by proposing a new superintendency dedicated exclusively to digital platforms within Cade. For Becker, “this solution seems right to me.” However, the expert notes that for the model to work, it will require a “strengthening of the technical staff and cooperation with ANPD (National Data Protection Authority), Central Bank and Anatel”, leveraging the existing foundation and avoiding the costs of creating an authority from scratch.
Brazil’s “Intermediate Path” vs. Europe’s Rigidity
Europe has taken the opposite path of the US with the Digital Markets Act (DMA), an extremely robust ex-ante regulation. The DMA imposes severe preventive obligations on the so-called “gatekeepers” (the largest big techs). According to Becker’s analysis for CNN, the European DMA “receives criticism for rigidity, compliance costs, and increased litigation“, raising the question of whether it is worth adopting such strict controls that could hamper market agility.
The European law, for example, forces the opening of ecosystems for alternative app stores (sideloading), requires interoperability, prohibits the use of merchants’ data to compete against them, and bans self-preference in rankings. “It’s a robust package that, if poorly calibrated, can reduce agility,” argues the expert. Brazil, on the other hand, seems to be aligning with countries like Germany, the United Kingdom, and Japan, which also seek a middle ground.
The Brazilian model, therefore, proposes intermediate and less rigid measures than the DMA. The idea is to preserve essential preventive mechanisms while combining them with ex-post oversight that Cade already performs. In the view of the expert consulted by CNN, the measure is appropriate “because it does not overly stifle platforms, but recognizes the need for greater monitoring of their activities.”
Brazil’s decision to use Cade to regulate big techs, instead of copying Europe’s rigid model (DMA) or the more lenient model of the US, is one of the most important debates for the future of the digital economy in the country.
Besteira falar que a Europa é ex-ante. As regras na Europa só foram criadas DEPOIS que identificaram os abusos! Isso foi reativo! Como não temos leis específicas, ou normas com punição, isso significa que as big techs estão ganhando tempo por aqui e vai acabar na justiça protelando. Enquanto isso, o estrago já foi feito. Ninguém falou dos riscos aos consumidores.
No Nepal deu super certo
Não tenho conhecimento pra opinar mas, a ideia de um controle moderado, sem muita rigidez ou “porteira aberta” pra castigar abusos, me agrada!