Brazil’s PL 2768/2022 regulates digital platforms with over R$70 million in revenue to ensure fair access for smaller competitors and impose compliance costs, primarily affecting U.S. firms while potentially benefiting Chinese companies.

In 2022, Brazil introduced the Bill Regulating Digital Platforms (PL 2768/2022), targeting platforms with a minimum annual revenue of R$70 million and designating them as “essential access control power holders.” These platforms are required to comply with stringent transparency and reporting mandates to prevent unreasonable discrimination against users and competing businesses. The legislation aims to ensure fair access to platform infrastructure for smaller competitors and imposes a 2% inspection fee based on annual gross revenue, alongside penalties for noncompliance.

While the law does not explicitly name U.S. companies, major American digital platforms in Brazil are likely to be affected. As the Brazilian government looks to align with global trends such as the EU’s Digital Markets Act (DMA), it prioritizes fairness and consumer protection through pre-emptive regulations. Consequently, U.S. firms may need to overhaul their services across various sectors, including search and social media, in order to comply. This shift in focus towards legal adherence could impede their ability to innovate and expand in Brazil’s digital landscape.

The bill may unintentionally benefit Chinese businesses by imposing burdens on U.S. platforms, which might struggle to adjust to these regulations. Chinese firms, with lesser operational commitments in Brazil, could capitalize on the situation due to their agility and state support. As American businesses allocate substantial resources for compliance, the opportunities for Chinese platforms to increase their market share in Brazil and Latin America become more pronounced, potentially altering the competitive dynamics in the region.

Brazil’s PL 2768/2022 establishes a regulatory framework placing significant burdens on high-revenue digital platforms, particularly affecting U.S. technology firms. By focusing on transparency and fair access, the law may inadvertently empower Chinese companies, allowing them to capitalize on the compliance challenges faced by their American counterparts. The implications of this legislation could reshape the competitive landscape within Brazil’s burgeoning digital economy.

Original Source: itif.org

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