The Framework

Introduced in 2022, Brazil’s proposed Bill Regulating Digital Platforms (PL 2768/2022) designates platforms generating at least R$70 million in annual revenue as “essential access control power holders.” Once identified, these businesses must comply with strict transparency and reporting requirements. They are also obligated to avoid “unreasonable discrimination” against users or competing firms, ensuring that smaller competitors have adequate access to platform infrastructure and consumers. The bill’s proactive approach places obligations on these platforms before any formal determination of unlawful conduct, effectively dictating how companies must structure specific business practices in areas such as app listings, payment methods, and access to essential services. It also imposes a 2 percent inspection fee on annual gross revenue, with additional fines of up to 2 percent of local turnover for noncompliance. By adopting such extensive parameters, the legislation includes leading foreign companies in Brazil and many domestic firms that exceed the R$70 million threshold.[1]

Implications for U.S. Technology Companies

Although the law’s language does not specifically target American businesses, large U.S. digital platforms operating in Brazil will likely fall under the bill’s scope. In line with global trends such as policies in the mold of the EU’s Digital Markets Act (DMA), Brazilian lawmakers cite fairness and consumer protection to justify ex ante restrictions on major online platforms. However, this inevitably requires U.S. companies to restructure their offerings—whether in search, social media, or cloud services—to meet the new obligations. Similar to other broad digital competition regulations, PL 2768/2022 forces platforms to allocate significant resources towards legal compliance, risk mitigation, and operational adjustments instead of product development or regional market expansion. Over time, this can diminish their agility and hinder the competitiveness of American digital firms within Brazil’s rapidly growing digital ecosystem.

How China Benefits

By capturing a wide range of digital providers—especially U.S. platforms—PL 2768/2022 may indirectly favor Chinese firms that either have a limited presence in Brazil or can more easily adapt their business models. These Chinese companies, often backed by state resources, could find themselves in a stronger position to enter the Brazilian market as U.S. competitors spend substantial time and capital adjusting to regulatory constraints. Furthermore, by imposing large-scale inspection fees and hefty fines on “essential access control power holders,” the bill effectively diverts resources that American companies might otherwise invest in innovative projects or new market offerings. In this context, Chinese platforms can seize opportunities to capture market share and strengthen their presence in Latin America.

Endnotes