Examining Brazil’s ‘Ecosystem Approach’ to Digital Antitrust

In September, the Brazilian government submitted to Congress an ambitious digital markets bill that marks the country’s first attempt at passing a policy designed to tackle the economic power of Big Tech.

It proposes giving Brazil’s competition authority, CADE, new ways to bring challenges in digital markets. Based on a designation process for platforms of systemic relevance, the bill would impose new obligations designed to guarantee transparency, interoperability and non-discrimination by major tech companies. The bill was drafted in a joint effort between CADE and Brazil's Finance Ministry based on results of a public consultation held in 2024 by the latter.

In the lower house of Congress, the bill has been designated a rapporteur and is now awaiting a decision on the creation of a special commission to analyse the proposal. But experts anticipate small chances of having the bill approved in 2026, given that Brazil will hold general elections in October, which takes up a large part of the political agenda in Brazil.

What also weighs on the prospects of the bill moving forward are the recent political tensions between Brazil and the United States. Although much of that heated rhetoric has calmed down and the tariffs announced by US President Donald Trump in July were rolled back, some of the tension remains, particularly as Brazil appears keen on advancing legislation to curb Big Tech's economic power in the coming year.

It’s been a topic of discussion in Washington. In mid-December, the House Judiciary antitrust subcommittee held a hearing on “Anti-American Antitrust: How Foreign Governments Target US Businesses,” with Brazil among the countries mentioned.

Tech Policy Press spoke in early January to CADE Commissioner Victor Oliveira Fernandes, one of the six current commissioners. Fernandes, whose term ends in June 2026, has been at CADE since 2022. He holds a PhD in Commercial Law from the University of São Paulo, and a Master's degree in Law, State and Constitution from the University of Brasília.

Fernandes is a federal public servant in the career of specialist in Regulation of Public Telecommunications Services at the National Telecommunications Agency (Anatel). He previously served as legal advisor to the Deputy Chief of Staff for Legal Affairs at the Civil House of the Presidency of the Republic (2016-2017), working with the Deputy Chief of Staff for Infrastructure Policies, Chief of Staff at the Administrative Council for Economic Defense - CADE (2017-2019), and Chief of Staff to a Justice at the Federal Supreme Court (STF) (2019-2022).

For Fernandes, competition policy in Brazil is still “very much aside from the political tensions between jurisdictions.” Unlike the US and the European Union, he doesn't see debates on competition policy reaching the political agenda in Brazil.

The commissioner also argued that the bill proposed in Brazil reaches a middle ground between the European Digital Markets Act’s (DMA) more “rigid model" and the more flexible laws adopted by the UK and Germany to fit the purpose of CADE's needs. “If we had a very extensive list of obligations that CADE would immediately need to enforce up front, that could be really tough to implement”.

Read the full interview below. Some answers have been edited for length. Square brackets indicate added information by the authors for clarification.

Procedure

Q: What is the specific criteria that CADE will use to designate the platforms of systemic relevance? How will CADE balance out these emerging platforms without over regulating the smaller ones, which is of course a complaint that comes from tech companies all the time, including the startup sector. And we also want to know if there's a sense of priorities in terms of platforms or services. For instance, is there something that CADE is more eager to look at first or is the authority just going for a broader approach right now?

A: So first off, it's important to emphasize that the bill which we are talking about, the ex ante legislation for competition policy in Brazil, is still under discussion before the National Congress. So everything can pretty much change suddenly, so it’s very difficult to make an assessment based on a bill that can change very quickly. But talking about the text that we have right now, the bill has reached a very interesting balance between quantitative and some qualitative criteria for the designation of the so-called platforms with systemic relevance. There is a very high criteria concerning the threshold of turnover for the companies [which stipulates a global annual gross turnover exceeding BRL 50 billion or revenue in Brazil exceeding BRL 5 billion].

But also, and I guess that [the qualitative criteria] is the most relevant and interesting part of the bill, because it outlines several dimensions of some sort of an ecosystem competition approach. And it's also interesting to see that when we look at the memorandum, which supports the bill before the National Congress, which was written by the executive branch of the federal government, the word “ecosystem” appears five times. And it's a very interesting perspective because it shows that the nature of the economic power that we are discussing here is pretty much void in the perspective of ecosystem approach.

The proposed bill seems to engage quite closely with the ecosystem approach that has become so influential in competition law in recent years. This approach considers that the economic power of large digital platforms goes beyond traditional antitrust market power (i.e., the ability to set supracompetitive prices) and translates into the capacity to set the rules for orchestrating ecosystems, thereby shaping competitive conditions in adjacent markets. One of the economic characteristics described in the bill is precisely the "strategic position for the development of third-party business activities."

This ecosystem approach opens the door to broader concerns than those typically addressed by traditional antitrust, shifting focus away from the centrality of relevant market definitions and moving beyond concerns exclusively grounded in anticompetitive exclusion.

We can reach this balance [between the quantitative threshold and qualitative analysis] by carefully considering the qualitative criteria. So there are some elements like network effects and the presence of these companies across several different markets, which resembles some of the ideas of Section 19a of the German competition law. So I guess that we have reached this balance.

Regarding priorities, I guess it's too soon to say what sectors should be designated up front by CADE. It might depend very much, of course, on the legislative track that we are going to see and also what should be the guidelines for CADE to implement this new legislation if it's an act after all.

Q: Regarding priority areas, most recently, CADE opened a new investigation into Microsoft looking at cloud licensing terms. Is this a signal that this kind of infrastructural technology is something that CADE will be eager to focus on in other companies or systems?

A: I unfortunately cannot comment on ongoing investigations, especially those ones who are in the general superintendents. As I said before, it is very difficult to anticipate how the legislation will be implemented because if the bill passes, CADE will undergo a very profound change in its structure. [The bill creates a new Superintendence of Digital Markets unit with a Superintendent appointed by the President of the Republic and approved by the Senate for a 2-year term.] So it will be very dependent on who the head of the new unit in charge is and what the priorities this new authority will set. So it is too soon to make any predictions on that. But on top of that, I guess that is one of the most interesting discussions around this new bill.

I published a piece recently on ProMarket discussing that because for those jurisdictions like the UK [which has enacted its Digital Markets, Competition and Consumers Act (DMCCA)] or even Germany [through its amendment to the German Competition Act which introduced Section 19a focused on large digital companies], but mostly UK, the idea that there are not self-executing obligations in the law puts the authority in a very interesting position to pick which firms will be designated first and what obligations will be first imposed. So it really triggers a very interesting question about the priorities here.

Q: The process that led to the bill being published by the Ministry of Finance involved an open consultation. How did the draft, which later became the bill, balance the competing interests from the different actors involved - from the large platforms, local businesses, consumer groups, and the government - and if you could also comment on what the main points of disagreement were. How are these different interests accommodated in what eventually became the bill?

A: Yes, I guess that the main trade-off involved with the design of the bill was whether it should take a more rigid approach like DMA with some self-executing obligations, or if the bill should take a more flexible approach just like the German model or the UK model. When we look at the report from the Ministry of Finance, this discussion came up in several sections of the report.

In that regard, it is important to emphasize that CADE has submitted a very important contribution for the public consultation held by the Ministry of Finance and in this specific submission, it was the very first time CADE publicly embraced the need for a new exemption regulation in Brazil. Additionally, CADE has claimed that for Brazil, it would be better if we adopted a more flexible approach like the UK's DMCCA or the German model and I guess that was pretty much the core argument of those who are now trying to emphasize how this bill is different from the DMA.

In that regard, the bill has really reached a very interesting middle ground between the more rigid model on the DMA and the other legislations which fits the purpose of CADE's needs right now because if we had a very extensive list of obligations that CADE would immediately need to enforce up front, that could really be tough to implement. So I guess the bill is very well balanced here.

Q: How does CADE's approach differ from the DMA and also maybe the litigious US enforcement approach. Is there anything you think Brazil can do that maybe those other jurisdictions cannot?

A: Yes, I guess there are some open questions that are going to be very interesting to follow regarding the distinctions both of the DMA and also the US antitrust enforcement. Looking more substantively, there is a very interesting question here on the goals of the Brazilian ex-ante legislation and I also talk a little bit about that in my piece at ProMarket.

Regarding the DMA, it’s clear that the DMA has complementary goals that are not covered by the antitrust regime, mainly contestability and fairness. But when we look at the Brazilian proposal, it's interesting to see that the word “fairness” or the word “fair” appears in the title of the bill, but not in its provisions. And that might prompt the question about whether or not we should look at fairness. I guess that at the end of the day, it's unavoidable to look at fairness, because if we look at the new goals that the bill outlines, which are reducing barriers to entry or protecting the competitive process, we will eventually fall in discussions about fairness. But that will be very, very thought-provoking for CADE while implementing the legislation.

Regarding the more procedural level, what I think is going to be very, very different from the DMA is that CADE has an interesting experience in commitments. And I would say that this experience with commitments is very different from what we see in the EU and also from what we see in the US.

CADE has also used interim measures, which is not common for antitrust jurisdictions to have in the way CADE does. I guess that CADE will translate this experience to the new bill, which is trying to reach a dialogue with companies and trying to engage with them in drafting the obligations that will be imposed on them in the region. So even if we do not have concepts like “core platform services,” in practice CADE will be at the table with the companies, and we will try to have them agree to commitments pretty much as it is now with the traditional antitrust enforcement. But of course, there are going to be more advanced aspects, both on the substantive level and also in the procedural aspects.

Q: What do transparency, interoperability, nondiscrimination obligations mean in practice? For instance, what would interoperability require from a messaging platform?

A: There's going to be a very interesting question when we see many jurisdictions adopting new remedies or new ways to implement the regulatory requirements. There's going to be a trend in the mid or the long run reaching some sort of convergence between the design of the remedies that we are talking about. Because what we can see now is that there is some augmentation of new business models by gatekeeper platforms across the globe.

The case of Apple is the most interesting one, because each jurisdiction is reaching a different model of remedies. But I guess that in the mid or long run, this should shift toward a more convergent approach across the globe, because those companies, of course, operate globally. So it would be very natural for them to try to reach a global consensus with implementation of some requirements, like transparency, interoperability, and non-discrimination obligations.

But on a more practical level, those are the questions that will be addressed by CADE on a case-by-case analysis. This is because as I said before, in the event that the bill is enacted, CADE will try to keep a record of dialogues with each one of the companies and will try to draft a special, I would say, commitment solution for any kind of problem.

But [the recent settlement by Apple in Brazil over its App Store terms] prompts other questions such as how to make the transition between antitrust enforcement cases to the implementation of the bill. The bill has a provision saying that the antitrust cases under investigation about unilateral practices should be transferred to the new digital superintendence unit which is a sign that the legislation is intended to bridge the two enforcement to make that transition.

Geopolitics and sovereignty

Q: Last year the US applied tariffs against Brazil, and it was clearly put by the US government that this was related to the regulation of digital markets. We wanted to know how this impacts the bill. Do you foresee any pressure in Congress? How does this pressure also affect CADE? Now that CADE is becoming a more prominent actor in terms of regulating digital markets, there is a tendency that pressure tends to move into this area. So how might CADE protect itself from lobbying by both companies and governments?

A: We can fairly say that in Brazil, competition law and antitrust enforcement is still operating in a very specific technocratic bubble. In expert circles, there is less involvement with these discussions on a more broader political dimension. I would say that the most critical part of the geopolitical tensions in Brazil are more related to content moderation in social networks, discussions like the decision of the Supreme Court regarding the liability of platforms for third party content, and the discussions about Digital Services Act-like proposals, or even the discussions about the legislation to protect children and adolescents in Brazil, which gained a lot of traction this past year.

I guess that for better or for worse, competition policy is still very much aside from political tensions between jurisdictions. And I guess that, in part, is due to the fact that competition policy and antitrust law is still, unfortunately, a very specific field in Brazil, which, to me, seems very different from what occurs in the US and also in the EU. We have not seen a debate on competition policy more broadly reaching the political agenda in higher levels in Brazil so far. Because of that, CADE is now, I guess, operating in a more technical approach on a more technical level, and we are conducting these cases here and, you know, doing our job.

Q: We have been writing about data centers in Brazil and about the UK’s reliance on US tech and the possibility that this infrastructural reliance may impede antitrust enforcement against those companies. We notice this tension between industrial policy and competition law in the UK and Brazil, two jurisdictions which are both pushing to build up data centers and compute capacity, while at the same time their competition authorities want to regulate AI and cloud. There's a really interesting tension there. Do you have any thoughts on that?

A: Yes, I guess it's becoming clear right now that there are two branches I would say that should be adopted by a jurisdiction who wants to be in a great position in this evolving digital landscape. On one hand, we have to look at regulations and competition enforcement and CADE is trying to do that.

On this level of platform regulation, there has been a great amount of debate in Brazil over the last years. But what last year has made very clear is that competition and regulatory tools are not enough in itself to guarantee that your country is going to be in a very great position in this new area.

So when we look at discussions on the Eurostack debates in Europe and things like that, we see that it's very, very necessary to have some public agenda around sovereignty, digital sovereignty, and trying to build up some structures to develop an ecosystem based on AI for the country. We are now looking at this discussion of digital sovereignty in a more interesting way and this discussion will continue in Brazil this year. We have some agendas coming up, like the discussion of the data centers, legislation, and things like that.

Q: Has CADE considered what success will look like? We're all speaking hypothetically here that the bill will be approved, but what is the thinking around end goals? What are the metrics of success? What are some things that you either you personally or that CADE has agreed that would be metrics of success?

A: This is a very interesting question and this kind of question has been raised over the last few years. When we look at new ex ante legislations like the DMA, what is going to be the metric to say that the DMA has worked? It is going to be more contestability, lower barriers to entry in several markets, more fairness in the relationships between the platforms and consumers-users or professional users.

Here, we have to shift the question toward a more procedural aspect, because when we ask those types of questions about metrics of success and what is the yardstick to say that this legislation has pretty much delivered, we are attached to the idea that competition law frameworks should deliver economic outcomes that are measurable.

This is pretty much the whole idea behind the Chicago School approach, which measures the effectiveness of an antitrust intervention by looking at consumer welfare outcomes. My take here is that when we are talking about digital regulation, it is not just about economic outcomes anymore. There are some normative values that are important for the coherence of competition law that must be embraced, like the idea of fairness, fair competition, and the concept of a competitive process that should be safeguarded by competition authorities. So it is difficult to say in a sentence, but we will have a successful framework if we see that the competition regime is more open to take into consideration some values of fair competition that are not only attached to economic metrics.