Brazil

By Ian Brown and Nicolo Zingales. Last updated: 3 May 2022

The Brazilian competition authority, CADE, hosted a workshop on merger policy for the International Competition Network on 1 April 2022. As part of the closing speech, CADE´s President Alexandre Cordeiro for the first time showed a willingness to reform the merger rules: “In a world  in constant evolution, with frequent changes in the economic environment, it´s important to reconsider our premises and standards in the analysis of concentrations in order to guarantee that antitrust practice remains effective and up to date”.

While the federal competition law was last revised in 2012, a 2019 General Law of Regulatory Agencies strengthened CADE’s administrative, budgetary and financial authority – one of the recommendations of an OECD peer review of the country’s competition regime, following which Brazil became an associate member of the OECD competition committee. A further OECD review of Brazil’s digital readiness recommended the main findings be implemented in communications markets, which were:

1. Ensure better separation between investigation and decision-making. 4. Increase the number of investigations into potential abuses of dominance by prioritising these cases, and by relying less on settlements.7. Clarify the methodology for calculation of fines.
2. Establish a more transparent appointment system for CADE Commissioners and the General Superintendent.5. Improve the scope and application of CADE’s settlement policy by negotiating during the investigation.8. Increase legal certainty and predictability through substantive guidelines. 
3. Devote adequate resources to competition enforcement by hiring more economists6. Ensure that only objectively quantifiable and readily accessible criteria are used as merger notification thresholds.9. Clarify the respective advocacy powers and the roles of CADE and the Ministry of Finance. 
OECD peer review of Brazilian competition law and policy main recommendations

CADE has contributed to a BRICS digital competition report and in August 2021 published a study on digital markets. It also participates in the International Competition Network (ICN) and UNCTAD, and in mid-2019 hosted a conference on Designing Antitrust for the Digital Era. With Russia, it is co-chairing a BRICS working group on Research on the Competition Issues in the Digital Markets.

The Brazilian data protection authority, ANPD, adopted after consultation the final version of its Resolution on the application of its general data protection law (LGPD) to small-sized enterprises. The Center for Technology and Society (CTS) at FGV produced an English translation. CTS also published an English translation of the feedback submitted as part of the consultation, which is much aligned with the final version of the text. Importantly, the Authority has followed the suggestion to steer clear of releasing small businesses from data portability obligations, while also failing to adopt the middle position of defining a narrower scope for these obligations for such entities. As CTS´s contribution explains, much uncertainty remains until the ANPD defines interoperability standards, as it is empowered to do according to art. 40 of the LGPD.  And in June 2021, CADE published a working paper on International Benchmarking on Competition Enforcement and Data Protection Institutions.

Civil society advocacy

Data Privacy Brasil is a civil society organisation which has worked extensively on research and training relating to data-driven mergers, as well as capacity-building for civil society, and stimulating public engagement and awareness. In June 2021, with the Brazilian Institute of Consumer Protection (IDEC), it offered a free training course on Data, Digital Markets and Competition; and in May, it published research on Multijurisdictional Analysis of Data Driven Mergers: Current Diagnosis and Public Policy Proposals for Brazil, followed by an article, a podcast episode and a webinar on “Data Protection and Antitrust”. It has also published a summary of its event on Open Banking and Personal Data Protection. Speakers emphasised the importance of Brazil’s data protection law and guidance on the user experience. Like the UK, Brazil has even developed customer experience standards; and similarly, both jurisdictions use individual consent as the justification for processing. Speaker Leandro Novais, a professor and lawyer at the Central Bank, suggested there is a need for future cooperation agreements between the Bank, competition authority CADE, and data protection authority LGPD.

In related news, IDEC has criticised government plans published on 25 January for an “Open Health” system, which would enable patients to consent to the sharing of their personal data with other healthcare providers. IDEC highlighted “the challenges of fragmentation of health information systems and lack of security in [the ministry’s] own databases, constant targets of security incidents, or how it will ensure the right to the protection of personal data.” 

IDEC also published a survey of the actions of the National Consumer Secretariat (Senacon) relating to data protection, finding “the predominance of investigations by the agency against banking institutions, telecommunications companies and the so-called big techs, the large technology companies that dominate the market.”

Both organisations participated on a panel on the Brazilian Internet Forum (with Patricia Sakowski, from CADE) in 2021 and are publishing an edited collection of essays on these theme in 2022. They also organised a study group on the proposed EU Digital Markets Act, which will lead to a policy paper. 

IDEC has participated in an international campaign to ask competition authorities to investigate the impact of the Google acquisition of Fitbit, sending a request to CADE on 15 July 2020. In 2021, Idec took an active part in denouncing WhatsApp’s privacy policy update for several Brazilian authorities – for data protection, consumer and competition.

EFF´s associate director for Latin America, Viridane Alimonti, published an op-ed with EFF´s special advisor, Cory Doctorow, about the attempt to introduce in the so-called “fake news” bill (P.L. 2630/2020) – a remuneration right for news publishers against platforms for use of their “journalistic content”. Pointing to civil society rejection of the proposal (corroborated by the technical analysis made by Coalizão Direitos na Rede and the Center for Technology and Society at FGV, for instance), the authors criticize this provision as ill-conceived: in its current version, it may actually entrench the dominance of the ad-tech duopoly by enshrining them as permanent structural elements of the media industry, such that efforts to reduce their dominance would undermine media outlets that depend on them.

Research published by Euroconsumers and Mozilla, supported by the Instituto Brasileiro de Defensa do Consumidor (IDEC), reveals Tinder practices discriminatory prices according to personal characteristics of the users in many countries around the globe, including Brazil. The study revealed a lack of transparency over how the prices are set, including on the application of “tailored discounts”.

Key enforcement actions

While CADE opened three investigations into Google during 2019, the agency found no evidence of “losses to competition related to the search engine market“ or “abusive clauses in its ad platform contracts.” CADE noted the latter case involved “involved an extensive market test, in which more than a hundred market agents were contacted, among large, medium and small-sized advertising agencies and advertisers, to understand the effects of the practice and market dynamics.” In June 2020, CADE revoked a decision blocking a payments tie-up between WhatsApp and card processor Cielo.

Following a joint investigation with the Brazilian competition and consumer protection authorities and the federal prosecutor, the data protection authority published in May 2021 guidelines to WhatsApp on its new privacy policy, asking the company not to restrict functionality if users do not agree to the policy. Data Privacy Brasil called this an “unprecedented institutional cooperation itself symbolic in terms of political action together.” On 24 August, the authority announced WhatsApp had agreed to comply, improving user transparency to EU levels; updating its business terms; preparing impact reports, and systematising internal controls. Negotiations between the company and the four government bodies continue.

The vice-president of CADE has proposed to clear the acquisition of Grupo Big Brasil (GBB) by Carrefour’s Brazilian subsidiary Atacadão. GBB is a joint venture between Walmart and a private equity firm, which includes e-commerce assets. 

In October, CADE approved the merger of IF Capital with Hortigil. The case concerned the integration of two supermarket chains specialized in fresh produce, into the ecosystem of e-commerce of IF Capital, which includes a marketplace for online grocery shopping and an online payment system. The General Superintendent (the vice-president of CADE) had voted to close the case as it didn’t raise issues in any relevant market. One Commissioner proposed to take the case, in order to examine the conglomerate effects of this acquisition and the ways in which it would impact competition with other ecosystems (as opposed to markets). The other Commissioners dismissed this concern as too speculative, due to the small market shares of the parties, and pointed out that, in similar circumstances, the US Department of Justice did not challenge Amazon’s acquisition of Whole Foods.

CADE approved a joint venture between Telefonica and Ânima, a company specialized in the administration of educational institutions, especially of secondary nature and university degrees, for the commercial exploitation of “free” and short-term digital training courses.Rio de Janeiro´s government launched an application for food delivery that charges a lower fee to restaurants than the dominant player (iFood) and offers better conditions to delivery workers. iFood is accused of hiring consultants to infiltrate the protests of delivery workers in 2021 and stir the movement away from requests for higher pay and towards demands for priority vaccination – trying to cast the movement as a political leftist initiative against the government, rather than a bottom-up movement of delivery workers against delivery platforms. Brazilian food delivery applications received very low ratings in FairWork´s investigation about working conditions in digital apps, putting Brazil at the bottom of the ranking of for decent platform work  (criteria include fair remuneration, working conditions, fair contract terms, fair management and collective bargaining).

Acknowledgment: this update was commissioned by Open Society Foundations. Thanks to Rafael Zanatta for his contributions.