The Framework

Brazil’s regulatory approach consists of Bill No. 2,768/2022, stalled in Congress as of May 2025, and a 2024 Ministry of Finance proposal expected to form the basis of new legislation.^[1] The 2022 bill designates platforms as “essential access control power holders” based solely on annual Brazilian revenues exceeding BRL 70 million (~$11.5 million), forcing covered platforms to pay inspection fees amounting to 2 percent of gross operating revenue while facing potential fines up to 2 percent of national revenue.^[2] The bill places enforcement under ANATEL, Brazil’s telecommunications regulator, despite lacking expertise in digital markets—creating regulatory misalignment and jurisdictional confusion. The 2024 Ministry of Finance proposal introduces a “systemically relevant” designation based on qualitative criteria including market power, network effects, vertical integration, and data control, with CADE conducting a two-step designation and investigation process that shifts the burden of proof to platforms to justify their practices.^[3] Sanctions under this proposal reach 20 percent of Brazilian turnover, with CADE coordinating enforcement alongside ANATEL and the data protection authority (ANPD). Both proposals impose obligations including mandatory interoperability, prohibitions on self-preferencing, data portability requirements, algorithmic transparency, restrictions on cross-service data use, and mandatory merger notifications regardless of traditional thresholds.

Implications for U.S. Technology Leadership

The Brazilian proposals create disproportionate compliance burdens that systematically disadvantage U.S. technology companies operating at scale. The 2022 bill’s revenue threshold of BRL 70 million captures potentially hundreds of American companies, forcing U.S. platforms into defensive strategies while subjecting them to vague obligations around “essential access control” that ANATEL can interpret broadly without structured due process.^[4] The threat of fines up to 20 percent of Brazilian turnover under the 2024 proposal for unclear violations creates extreme liability exposure that forces U.S. companies to curtail innovation and limit service offerings. Regulatory fragmentation between CADE, ANATEL, and ANPD compounds these risks, as U.S. platforms must navigate conflicting requirements across agencies lacking clear coordination mechanisms—a burden that smaller domestic competitors and Chinese platforms avoid through their limited scale or flexible architectures.^[5]

Brazil’s framework threatens to fragment the Latin American digital economy and erode U.S. competitive advantages in the region. As other Latin American countries model their regulations on Brazil’s approach, U.S. firms face a patchwork of compliance obligations that diverts resources from innovation to regulatory management.^[6] The proposals’ focus on size-based thresholds and presumptions of harm punishes the very characteristics—scale, integration, and data capabilities—that enable U.S. platforms to deliver superior products and services globally. The result is a regulatory model that objectively weakens U.S. companies’ competitive position in one of the world’s largest emerging digital markets, threatening American technological leadership.

Endnotes