Lula da Silva is licensed under Creative Commons.
Last October the government of Brazilian President Luiz “Lula” da Silva submitted the “Fair Competition in Digital Markets Bill” to the Chamber of Deputies for approval. If passed, the legislation would construct one of the world’s most restrictive digital regulation frameworks, targeting American companies with discriminatory requirements.
Now, the Brazilian Government is moving to fast track the legislation, with Brazil’s National Congress considering an urgency request granting the bill special status for an accelerated voting timeline. If the urgency request gets approved, the bill can be brought up at any time straight to the floor without any formal committee process.
The Fair Competition in Digital Markets Bill proposes transformative change to Brazil’s regulatory regime, empowering Brazil’s chief regulatory office, CADE. While currently Brazil operates under an “ex-post” framework, reacting to “anti-competitive” practices after they occur, the bill aims to establish a new, far more aggressive system.
If successful, the bill would move Brazil to an “ex-ante” framework, authorizing CADE to designate “systemically relevant” digital service providers such as Apple, Amazon, and Google with special regulatory requirements. Under the guise of fairness, Brazilian lawmakers propose doing away with the presumption of innocence. Brazilian regulators would have the power to act as judge, jury, and executioner, freely targeting American companies with extortionate fines.
Brazil’s newly proposed regulatory architecture has caused concern due to its striking resemblance to the EU’s equally damaging Digital Markets Act (DMA). The DMA was the first to establish the concept of systemic relevance, using vague language and arbitrary revenue thresholds to capture only large American tech companies and subject them to elevated regulatory scrutiny.
Since its enforcement began in 2024, the DMA has been responsible for $1 billion annually in compliance costs for the five current qualifying American tech companies. In addition to significant overhead cost increases, the vague nature of DMA terminology allows European regulators to flex language to hit American companies with multi-billion Euro fines. Last May, Apple was targeted with a €500 million fine under the DMA, Meta faced a €200 million fine, and investigations were opened into several major U.S. tech companies.
Following in the footsteps of Europe, Brazil’s shift to a more aggressive regulatory framework represents a direct attack on American enterprise. Sharing the DMA’s intentionally flawed concept of systemic relevance and similarly arbitrary global revenue threshold of R$50 billion (US$9 billion), Brazil’s bill would disproportionately burden American companies with substantial compliance requirements and exposure to fines.
Meanwhile, emerging foreign competition remains unaffected. Under the DMA, large Chinese digital service providers such as Alibaba and Tencent have dodged the systemically relevant designation despite their global significance. This disconnect between the expectations for American companies and their foreign and domestic counterparts exposes laws such as the Fair Competition in Digital Markets Bill and the DMA for what they really are: poorly veiled attempts to restrict and extract wealth from America’s most innovative companies. Such blatant targeting of American entrepreneurship has motivated firm opposition from American lawmakers. Representative Scott Fitzgerald (R-Wis.) recently released a statement urging Brazil to “reject this failed EU approach that harms innovation and will further undermine the U.S.-Brazil relationship.”
As the U.S. and Brazil work to reorient our trade relationship, pursuing legislation that discriminately targets American companies will only raise tensions and undermine legitimate efforts. As negotiations continue, U.S. leadership must maintain its firm opposition to discriminatory barriers to free and fair trade between the U.S. and Brazil.
