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A Positive Agenda for Digital-Competition Enforcement

Reasonable people may disagree about their merits, but digital-competition regulations are now the law of the land in many jurisdictions, including the EU and the . . .

Reasonable people may disagree about their merits, but digital-competition regulations are now the law of the land in many jurisdictions, including the EU and the UK. Policymakers in those jurisdictions will thus need to successfully navigate heretofore uncharted waters in order to implement these regulations reasonably. In recent comments that we submitted to the UK’s Competition and Markets Authority on the recently passed Digital Markets, Competition and Consumers (DMCC) bill, we tried to outline precisely that sort of “positive agenda” for digital-competition enforcement.

Read the full piece here.

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Antitrust & Consumer Protection

The Legacy of Neo-Brandeisianism: History or Footnote?

Popular Media The movement that some call “neo-Brandeisianism,” after its putative inspiration in the works of the late U.S. Supreme Court Justice Louis Brandeis (others have less-charitably . . .

The movement that some call “neo-Brandeisianism,” after its putative inspiration in the works of the late U.S. Supreme Court Justice Louis Brandeis (others have less-charitably termed it “antitrust populism” or “hipster antitrust”), has indisputably taken the competition world by storm. Indeed, it has arguably led to one of the fastest policy swings in antitrust history.

Read the full piece here.

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Antitrust & Consumer Protection

AI Partnerships and Competition: Much Ado About Nothing?

TOTM Competition policymakers around the world have been expressing concerns about competition in emerging artificial-intelligence (AI) industries, with some taking steps to investigate them further. These . . .

Competition policymakers around the world have been expressing concerns about competition in emerging artificial-intelligence (AI) industries, with some taking steps to investigate them further. These fears are notably fueled by a sense that incumbent (albeit, in adjacent markets) digital platforms may use strategic partnerships with AI firms to stave off competition from this fast-growing field.

Read the full piece here.

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Antitrust & Consumer Protection

ICLE Comments on India’s Draft Digital Competition Act

Regulatory Comments A year after it was created by the Government of India’s Ministry of Corporate Affairs to examine the need for a separate law on competition . . .

A year after it was created by the Government of India’s Ministry of Corporate Affairs to examine the need for a separate law on competition in digital markets, India’s Committee on Digital Competition Law (CDCL) in February both published its report[1] recommending adoption of such rules and submitted the draft Digital Competition Act (DCA), which is virtually identical to the European Union’s Digital Markets Act (DMA).[2]

The EU has touted its new regulation as essential to ensure “fairness and contestability” in digital markets. And since it entered into force early last month,[3] the DMA has imposed strict pre-emptive rules on so-called digital “gatekeepers,”[4] a cohort of mostly American tech giants like Google, Amazon, Apple, Meta, and Microsoft.

But despite the impressive public-relations campaign[5] that the DMA’s proponents have been able to mount internationally, India should be wary of reflexively importing these ready-made and putatively infallible solutions that promise to “fix” the world’s most successful digital platforms at little or no cost.

I. Not So Fast

The first question India should ask itself is why?[6] Echoing the European Commission, the CDCL argues that strict ex-ante rules are needed because competition-law investigations in digital markets are too time-consuming. But this could be a feature, not a bug, of competition law. Digital markets often involve novel business models and zero or low-price products, meaning that there is nearly always a plausible pro-competitive explanation for the impugned conduct.

When designing rules and presumptions in a world of imperfect information, the general theme is that, as confidence in public harm goes up, the evidentiary burden must go down. This is why antitrust law tilts the field in the enforcer’s favor in cases involving practices that are known to always, or almost always, be harmful. But none of the conduct covered by the DCA falls into this category. Unlike with, say, price-fixing cartels or territorial divisions, there is currently no consensus that the practices the DMA would prohibit are generally harmful or anticompetitive. To the contrary, when assessing a self-preferencing case against Google in 2018, the Competition Commission of India (CCI) found important consumer benefits[7] that outweighed any inconveniences they may impose on competitors.

By imposing per se rules with no scope for consumer-welfare or efficiency exemptions, the DCA could capture swaths of procompetitive conduct. This is a steep—and possibly irrational—price to pay for administrative expediency. Rather than adopt a “speed-at-all-costs” approach, India should design its rules to minimize error costs and ensure the system’s overall efficiency.

II. The Costs of Ignoring Cost-Benefit Analysis

But this cannot be done, or it cannot be done rationally, unless India is crystal clear about what the costs and benefits of digital-competition regulation are. As things stand, it is unclear whether this question has been given sufficient thought.

For one, the DCA’s goals do not seem to align well with competition law. While competition law protects competition for the ultimate benefit of consumers, the DCA—like the DMA—is concerned with aiding rivals, rather than benefiting consumers. Unmooring digital competition regulation from consumer welfare is ill-advised. It opens the enforcer to aggressive rent seeking by private parties with a vested interest in never being satisfied,[8] who may demand far-reaching product-design changes that don’t jibe with what consumers—i.e., the public at-large—actually want.

Indeed, when the system’s lodestar shifts from benefiting consumers to facilitating competitors, there is a risk that the only tangible measure of the law’s success will be the extent to which rivals are satisfied[9] with gatekeepers’ product-design changes, and their relative market-share fluctuations. Sure enough, the European Commission recently cited stakeholders’ dissatisfaction[10] as one of the primary reasons to launch five DMA noncompliance investigations, mere weeks after the law’s entry into force. In the DCA’s case, the Central Government’s ability to control CCI decisions further exacerbates the risk of capture and political decision making.

While digital-competition regulation’s expected benefits remain unclear and difficult to measure, there are at least three concrete types of costs that India can, and should, consider.

First, there is the cost of harming consumers and diminishing innovation. Mounting evidence from the EU demonstrates this to be a very real risk. For example, Meta’s Threads was delayed[11] in the EU block due to uncertainties about compliance with the DMA. The same happened with Gemini, Google’s AI program.[12] Some product functionalities have also been degraded. For instance, in order to comply with the DMA’s strict self-preferencing prohibitions, maps that appear in Google’s search results no longer link to Google Maps, much to the chagrin of European users.[13]

Google has also been forced to remove[14] features like hotel bookings and reviews from its search results. Until it can accommodate competitors who offer similar services (assuming that is even possible), these specialized search results will remain buried several clicks away from users’ general searches. Not only is this inconvenient for consumers, but it has important ramifications for business users.

Early estimates suggest that clicks from Google ads to hotel websites decreased by 17.6%[15]as a result of the DMA. Meanwhile, on iOS, rivals like Meta[16] and Epic Games[17] are finding it harder than they expected to offer competing app stores or payment services. At least some of this is due to the reality that offering safe online services is a costly endeavour. Apple reviews millions of apps every year[18] to weed out bad actors, and replicating this business is easier said than done. In other words, the DMA is falling short even on its own terms.

In other cases, consumers are likely to be saddled with a litany of pointless choices, as well as changes in product design that undermine user experience. For example, the European Commission appears to believe that the best way to ensure that Apple doesn’t favor its own browser on iOS is by requiring consumers to sift through 12 browser offerings[19] presented on a choice screen.[20] But consumers haven’t asked for this “choice.” The simple explanation for the policy’s failure is that, despite the DMA’s insistence to the contrary, users were always free to choose their preferred browser.

Supporters of digital-competition regulation will no doubt retort that India should also consider the costs of inaction. This is certainly true. But it should do so against the background of the existing legal framework, not a hypothetical legal and regulatory vacuum. Digital platforms are already subject to general (and fully functional) competition law, as well as to a range of other sector-specific regulations.

For instance, Amazon and Flipkart are precluded by India’s foreign-direct-investment (FDI) policy from offering first-party sales[21] to end-users on their e-commerce platforms. In addition, the CCI has launched several investigations of digital-platform conduct that would presumably be caught by the DCA, including by Google,[22] Amazon,[23] Meta,[24] Apple,[25] and Flipkart.[26]

The facile dichotomy made between digital-competition regulation and “the digital wild west[27] is essentially a red herring. Nobody is saying that digital platforms should be above the law. Rather, the question is whether a special competition law is necessary and justified considering the costs such a law would engender, as well as the availability of other legal and regulatory instruments to tackle the same conduct.

This is particularly the case when these legal and regulatory instruments incorporate time-honed analytical tools, heuristics, and procedural safeguards. In 2019, India’s Competition Law Review Committee[28] concluded that a special law was unnecessary. In a report titled “Competition Policy for the Digital Era,”[29] a panel of experts retained by the European Commission reached the same conclusion.

Complicating the question further still is that the DCA would mark a paradigm shift for Indian competition policy. In 2000, the Raghavan Committee Report was crucial in aligning Indian competition law with international best practices, including by moving analysis away from blunt structural presumptions and toward the careful observance of economic effects. As such, it paved the way for the 2002 Competition Act—a milestone of Indian law.

The DCA, by contrast, would overturn these advancements to target companies based on size, obviating any effects analysis. This would amount to taking Indian competition law back to the era of the Monopolies and Restrictive Trade Practices Act of 1969 (MRTP). Again, is the hodgepodge of products and services known collectively as “digital markets” sufficiently unique to warrant such a drastic deviation from well-established antitrust doctrine?

The third group of costs that the government must consider are the DCA’s enforcement costs. The five DMA noncompliance investigations launched recently by the European Commission have served to dispel the once-common belief that the law would be “self-executing[30] and that its enforcement would be collaborative, rather than adversarial. With just 80 dedicated staff,[31] many believe the Commission is understaffed[32] to enforce the DMA (initially, the most optimistic officials asked for 220 full-time employees).[33] If the EU—a sprawling regulatory superstate[34]—struggles to find the capacity to deploy digital-competition rules, can India expect to fare any better?

Enforcing the DCA would require expertise in a range of fields, including competition law, data privacy and security, telecommunications, and consumer protection, among others. Either India can produce these new experts, or it will have to siphon them from somewhere else. This raises the question of opportunity costs. Assuming that India even can build a team to enforce the DCA, the government would also need to be reasonably certain that, given the significant overlaps in expertise, these resources wouldn’t yield better returns if allocated elsewhere—such as, for example, in the fight against cartels or other more obviously nefarious conduct.

In short, if the government cannot answer the question of how much the Indian public stands to gain for every Rupee of public money invested into enforcing the DCA, it should go back to the drawing board and either redesign or drop the DCA altogether.

III. India Is Not Europe

When deciding whether to adopt digital-competition rules, India should consider its own interests and play to its strengths. These need not be the same as Europe’s and, indeed, it would be surprising if they were. Despite the European Commission’s insistence to the contrary, the DMA is not a law that enshrines general or universal economic truths. It is, and always has been, an industrial policy tool,[35] designed to align with the EU’s strengths, weaknesses, and strategic priorities. One cannot just assume that these idiosyncrasies translate into the Indian context.

As International Center for Law & Economics President Geoffrey Manne has written,[36] promotion of investment in the infrastructure required to facilitate economic growth and provision of a secure environment for ongoing innovation are both crucial to the success of developing markets like India’s. Securing these conditions demands dynamic and flexible competition policymaking.

For young, rapidly growing industries like e-commerce and other digital markets, it is essential to attract consistent investment and industry know-how in order to ensure that such markets are able to innovate and evolve to meet consumer demand. India has already witnessed a few leading platforms help build the necessary infrastructure during the nascent stages of sectoral development; continued investment along these lines will be essential to ensure continued consumer benefits.

In the above context, emulating the EU’s DMA approach could be a catastrophic mistake. Indian digital platforms are still not as mature as the EU’s, and a copy and paste of the DMA may prove unfit for the particular attributes of India’s market. The DCA could potentially capture many Indian companies. Paytm, Zomato, Ola Cabs, Nykaa, AllTheRooms, Squeaky, FlipCarK, MakeMyTrip, and Meesho (among others) are some of the companies that could be stifled by this new regulatory straitjacket.

This would not only harm India’s competitiveness, but would also deny consumers important benefits. Despite India’s remarkable economic growth over the last decade, it remains underserved by the most powerful consumer and business technologies, relative to its peers in Europe and North America. The priority should be to continue to attract and nurture investment, not to impose regulations that may further slow the deployment of critical infrastructure.

Indeed, this also raises the question of whether the EU’s objectives with the DMA are even ones that India would want to emulate. While the DMA’s effects are likely to be varied, it is clear that one major impetus for the law is distributional: to ensure that platform users earn a “fair share” of the benefits they generate. Such an approach could backfire, however, as using competition policy to reduce profits may simply lead to less innovation and significantly reduced benefits for the very consumers it is supposed to help. This risk is significantly magnified in India, where the primary need is to ensure the introduction and maintenance of innovative technology, rather than fine tuning the precise distribution of its rewards.

A DMA-like approach could imperil the domestic innovation that has been the backbone of initiatives like Digital India[37] and Startup India.[38] Implementation of a DMA-like regime would discourage growing companies that may not be able to cope with the increased compliance burden. It would also impose enormous regulatory burdens on the government and great uncertainty for businesses, as a DMA-like regime would require the government to define and quantify competitive benchmarks for industries that have not yet even grown out of their nascent stages. At a crucial juncture when India is seen as an investment-friendly nation,[39] implementation of a DMA-like regime could create significant roadblocks to investment—all without any obligation on the part of the government to ensure that consumers benefit.

This is because ex-ante regimes impose preemptive constraints on digital platforms, with no consideration of possible efficiencies that benefit consumers. While competition enforcement in general may tend to promote innovation, jurisdictions that do not allow for efficiency defenses tend to produce relatively less innovation, as careful, case-by-case competition enforcement is replaced with preemptive prohibitions that impede experimentation.

Regulation of digital markets that have yet to reach full maturity is bound to create a more restrictive environment that will harm economic growth, technological advancement, and investment. For India, it is crucial that a nuanced approach is taken to ensure that digital markets can sustain their momentum, without being bogged down by various and unnecessary compliance requirements that are likely to do more harm than good.

IV. Conclusion

In a multi-polar world, developing countries can no longer be expected to mechanically adopt the laws and regulations demanded of them by senior partners to trade agreements and international organizations. Nor should they blindly defer to foreign legislatures, who may (and likely do) have vastly different interests and priorities than their own.

Nobody is denying that the EU has provided many useful legal and regulatory blueprints in the past, many of which work just as well abroad as they do at home. But based on what we know so far, the DMA is not poised to become one of them. It is overly stringent, ignores efficiencies, is indifferent about effects on consumers, incorporates few procedural safeguards, is lukewarm on cost-benefit analysis, and risks subverting well-established competition-law principles. These notably include that the law should ultimately protect competition, not competitors.

Rather than instinctively playing catch up, India could ask the hard questions that the EU eschewed for the sake of a quick political victory against popular bogeymen. What is this law trying to achieve? What are the DCA’s supposed benefits? What are its potential costs? Do those benefits outweigh those costs? If the answer to these questions is ambivalent or negative, India’s digital future may well lay elsewhere.

[1] Report of the Committee on Digital Competition Law, Government of India Ministry of Corporate Affairs (Feb. 27, 2024),

[2] Regulation (EU) 2022/1925 of the European Parliament and of the Council, on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act) (Text with EEA relevance), Official Journal of the European Union, available at

[3] Press Release, Designated Gatekeepers Must Now Comply With All Obligations Under the Digital Markets Act, European Commission (Mar. 7, 2024),

[4] Press Release, Digital Markets Act: Commission Designates Six Gatekeepers, European Commission (Sep. 6, 2023),

[5] Press Release, Cade and European Commission Discuss Collaboration on Digital Market Agenda Ministério da Justiça e Segurança Pública (Mar. 29, 2023),

[6] Summary of Remarks by Jean Tirole, Analysis Group (Sep. 27, 2018), available at

[7] Geoffrey A. Manne, Google’s India Case and a Return to Consumer-Focused Antitrust, Truth on the Market (Feb. 8, 2018),

[8] Adam Kovacevich, The Digital Markets Act’s “Statler & Waldorf” Problem, Chamber of Progress, Medium (Mar. 7, 2024),

[9] Id.

[10] Remarks by Executive-Vice President Vestager and Commissioner Breton on the Opening of Non-Compliance Investigations Under the Digital Markets Act, European Commission (Mar. 25, 2024),

[11] Makena Kelly, Here’s Why Threads Is Delayed in Europe, The Verge (Jul. 10, 2023),

[12] Andrew Grush, Did You Know Google Gemini Isn’t Available in Europe Yet?, Android Authority (Dec. 7, 2023),

[13] Edith Hancock, ‘Severe Pain in the Butt’: EU’s Digital Competition Rules Make New Enemies on the Internet, Politico (Mar. 25, 2024),

[14] Oliver Bethell, An Update on Our Preparations for the DMA, Google Blog (Jan. 17, 2024),

[15] Mirai, Linkedin (Apr. 17, 2024),

[16] Alex Heath, Meta Says Apple Has Made It ‘Very Difficult’ To Build Rival App Stores in the EU, The Verge (Feb. 2, 2024),

[17] Id.

[18] 2022 App Store Transparency Report, Apple Inc. (2023), available at

[19] About the Browser Choice Screen in iOS 17, Apple Developer, (Feb. 2024),

[20] Remarks by Executive-Vice President Vestager and Commissioner Breton on the Opening of Non-Compliance Investigations Under the Digital Markets Act, EUROPEAN COMMISSION,

[21] Saheli Roy Choudhury, If You Hold Amazon Shares, Here’s What You Need to Know About India’s E-Commerce Law, CNBC (Feb. 4, 2019),

[22] Press Release, CCI Imposes a Monetary Penalty of Rs.1337.76 Crore on Google for Anti-Competitive Practices in Relation to Android Mobile Devices, Competition Commission of India (Oct. 20, 2022),; CCI Orders Probe Into Google’s Play Store Billing Policies, The Economic Times, (Sep. 7, 2023),

[23] Why Competition Commission of India Is Investigating Amazon, Outlook, (May. 1, 2022),

[24] HC Dismisses Facebook India’s Plea Challenging CCI Probe Into Whatsapp’s 2021 Privacy Policy, The Economic Times (Sep. 7, 2023),

[25] Case No. 24 of 2021, Competition Commission of India, (Dec. 31, 2021),

[26] Supra note 23.

[27] Anne C. Witt, The Digital Markets Act: Regulating the Wild West, 60(3) Common Market Law Review 625 (2023).

[28] Report of Competition Law Review Committee, Indian Economic Service (Jul. 2019), available at

[29] Jacques Crémer, Yves-Alexandre de Montjoye, & Heike Schweitzer, Competition Policy for the Digital Era, European Commission Directorate-General for Competition (2019),

[30] Strengthening the Digital Markets Act and Its Enforcement, Bundesministerium für Wirtschaft und Klimaschutz (Sep. 7, 2021), available at

[31] Meghan McCarty Carino, A New EU Law Aims to Tame Tech Giants. But Enforcing It Could Turn out to Be Tricky Marketplace (Mar. 7, 2024),

[32] Id.

[33] Luca Bertuzzi & Molly Killeen, Digital Brief: DSA Fourth Trilogue, DMA Diverging Views, France’s Fine for Google, EurActiv (Apr. 1, 2022),

[34] Anu Bradford, The Brussels Effect: The Rise of a Regulatory Superstate in Europe, Columbia Law School (Jan. 8, 2013),

[35] Lazar Radic, Gatekeeping, the DMA, and the Future of Competition Regulation, Truth on the Market (Nov. 8, 2023),

[36] Geoffrey A. Manne, European Union’s Digital Markets Act Not Suitable for Developing Economies, Including India, The Times of India (Feb. 14, 2023),

[37] Digital India, Common Services Centre (Apr. 18, 2024),

[38] Startup India, Government of India (Apr. 16, 2024),

[39] Invest India, Government of India (Mar. 20, 2024),


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Antitrust & Consumer Protection

The Future of the DMA: Judge Dredd or Juror 8?

TOTM When it was passed into law, the European Union’s Digital Markets Act (DMA) was heralded by supporters as a key step toward fairness and contestability . . .

When it was passed into law, the European Union’s Digital Markets Act (DMA) was heralded by supporters as a key step toward fairness and contestability in online markets. It has unfortunately become increasingly clear that reality might not live up to those expectations. Indeed, there is mounting evidence that European consumers’ online experiences have been degraded following the DMA’s entry into force.

The perception that the DMA has been a failure is beginning to motivate a not insignificant amount of finger pointing in Brussels. So-called “gatekeeper” firms have blamed heavy-handed regulation for their degraded services, while smaller rivals finger “malicious compliance.”

Read the full piece here.

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Antitrust & Consumer Protection

The Broken Promises of Europe’s Digital Regulation

TOTM If you live in Europe, you may have noticed issues with some familiar online services. From consent forms to reduced functionality and new fees, there . . .

If you live in Europe, you may have noticed issues with some familiar online services. From consent forms to reduced functionality and new fees, there is a sense that platforms like Amazon, Google, Meta, and Apple are changing the way they do business. 

Many of these changes are the result of a new European regulation called the Digital Markets Act (DMA), which seeks to increase competition in online markets. Under the DMA, so-called “gatekeepers” must allow rivals to access their platforms. Having taken effect March 7, firms now must comply with the regulation, which explains why we are seeing these changes unfold today.

Read the full piece here.

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Antitrust & Consumer Protection

SEPs: The West Need Not Cede to China

TL;DR TL;DR Background: Policymakers on both sides of the Atlantic are contemplating new regulations on standard-essential patents (SEPs). While the European Union (EU) is attempting to . . .


Background: Policymakers on both sides of the Atlantic are contemplating new regulations on standard-essential patents (SEPs). While the European Union (EU) is attempting to pass legislation toward that end, U.S. authorities like the Department of Commerce and U.S. Patent and Trademark Office are examining the issues and potentially contemplating their own reforms to counteract changes made by the EU.

But… These efforts would ultimately hand an easy geopolitical win to rivals like China. Not only do the expected changes risk harming U.S. and EU innovators and the standardization procedures upon which they rely, but they lend legitimacy to concerning Chinese regulatory responses that clearly and intentionally place a thumb on the scale in favor of domestic firms. The SEP ecosystem is extremely complex, and knee-jerk regulations may create a global race to the bottom that ultimately harms the very firms and consumers they purport to protect.



In April 2023, the EU published its “Proposal for a Regulation on Standard Essential Patents.” The proposal seeks to improve transparency by creating a register of SEPs (and accompanying essentiality checks), and to accelerate the diffusion of these technologies by, among other things, implementing a system of nonbinding arbitration of aggregate royalties and “fair, reasonable, and non-discriminatory” (FRAND) terms. 

But while the proposal nominally applies only to European patents, its effects would be far broader. Notably, the opinions on aggregate royalties and FRAND terms would apply worldwide. European policymakers would thus rule (albeit in nonbinding fashion) on the appropriate royalties to be charged around the globe. This would further embolden foreign jurisdictions to respond in kind, often without the guardrails and independence that have traditionally served to cabin policymakers in the West.


Chinese policymakers have long considered the SEPs to be of vital strategic importance, and have taken active steps to protect Chinese interests in this space. The latest move came from the Chongqing First Intermediate People’s Court in a dispute between Chinese firm Oppo and Finland’s Nokia. In a controversial December 2023 ruling, the court limited the maximum FRAND royalties that Nokia could charge Oppo for use of Nokia’s SEPs pertaining to the 5G standard.

Unfortunately, the ruling appears obviously biased toward Chinese interests. In calculating the royalties that Nokia could charge Oppo, the court applied a sizable discount in China. It’s been reported that, in reaching its conclusion, the court defined an aggregate royalty rate for all 5G patents, and divided the proceeds by the number of patents each firm held—a widely discredited metric.

The court’s ruling has widely been seen as a protectionist move, which has elicited concern from western policymakers. It appears to set a dangerous precedent in which geopolitical considerations will begin to play an increasingly large role in the otherwise highly complex and technical field of SEP policy.


Leaving aside how China may respond, the EU’s draft regulation will likely be detrimental to innovators. The regulation would create a system of government-run essentiality checks and nonbinding royalty arbitrations. The goal would be to improve transparency and verify that patents declared “standard essential” truly qualify for that designation.

This system would, however, be both costly and difficult to operate. It would require such a large number of qualified experts to serve as evaluators and conciliators that it may prove exceedingly difficult (or impossible) to find them. The sheer volume of work required for these experts would likely be insurmountable, with the costs borne by industry players. Inventors would also be precluded from seeking out injunctions while arbitration is ongoing. Ultimately, while nonbinding, the system may lead to a de facto royalty cap that lowers innovation.

Finally, it’s unclear whether this form of coordinated information sharing and collective royalty setting may give rise to collusion at various points in the value chain. This threatens both to harm consumers and to deter firms from commercializing standardized technologies. 

In short, these kinds of top-down initiatives likely fail to capture the nuances of individualized patents and standards. They may also add confusion and undermine the incentives that drive affordable innovation.


The bottom line is that the kinds of changes under consideration by both U.S. and EU policymakers may undermine innovation in the West. SEP entrepreneurs have been successful because they have been able to monetize their innovations. If authorities take steps that needlessly imbalance the negotiation process between innovators and implementers—as Chinese courts have started to do and Europe’s draft regulation may unintendedly achieve—it will harm both U.S. and EU leadership in intellectual-property-intensive industries. In turn, this would accelerate China’s goal of becoming “a cyber great power.”

For more on this issue, see the ICLE issue brief “FRAND Determinations Under the EU SEP Proposal: Discarding the Huawei Framework,” as well as the “ICLE Comments to USPTO on Issues at the Intersection of Standards and Intellectual Property.”

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Intellectual Property & Licensing

ICLE Response to the Australian Competition Taskforce’s Merger Reform Consultation

Regulatory Comments I. About the International Center for Law & Economics The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy . . .

I. About the International Center for Law & Economics

The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center founded with the goal of building the intellectual foundations for sensible, economically grounded policy. ICLE promotes the use of law & economics methodologies to inform public-policy debates and has longstanding expertise in the evaluation of antitrust law and policy.

ICLE’s interest is to ensure that antitrust law remains grounded in clear rules, established precedent, a record of evidence, and sound economic analysis. Some of the proposals in the Competition Taskforce’s Reform Consultation (“Consultation”) threaten to erode such foundations by, among other things, shifting toward merger analysis that focuses on the number of competitors, rather than the impact on competition, as well as reversing the burden of proof; curtailing rights of defense; and adopting an unduly strict approach to mergers in particular sectors. Our overriding concern is that intellectually coherent antitrust policy must focus on safeguarding competition and the interests of consumers.

In its ongoing efforts to contribute to ensuring that antitrust law in general, and merger control in particular, remain tethered to sound principles of economics, law, and due process, ICLE has submitted responses to consultations and published papers, articles, and reports in a number of jurisdictions, including the European Union, the United States, Brazil, the Republic of Korea, the United Kingdom, and India. These and other publications are available on ICLE’s website.[1]

II. Summary of Key Points

We appreciate the opportunity to comment on the Competition Taskforce’s Consultation. Our comments below mirror the structure of the main body of the Consultation. Section by section, we suggest improvements to the Consultation’s approach, as well as citing background law and economics that we believe the Treasury should keep in mind as it considers whether to move forward with merger reform in Australia.

  • Question 6 — Australia should not skew its merger regime toward blocking mergers under conditions of uncertainty. Uncertainty is endemic in merger control. Since the vast majority of mergers are procompetitive—including mergers in what is commonly called the “digital sector”—an error-cost-analysis approach would suggest that false negatives are preferable to false positives. Concrete evidence of a likely substantial lessening of competition post-merger should continue to be the decisive factor in decisions to block a merger, not uncertainty about its effects.
  • Question 8 — While potential competition and so-called “killer acquisitions” are important theories for the Australian Competition and Consumer Commission (“ACCC”) to consider when engaging in merger review, neither suggest that the burden of proof needed to reject a merger should be changed, nor do they warrant an overhaul of the existing merger regime. Furthermore, given the paucity of evidence finding “killer acquisitions” in the real world, it is highly unlikely that any economic woes that Australia currently faces can be blamed on an epidemic of killer acquisitions or acquisitions of potential/nascent competitors. If the Treasury is going to adopt any rules to address these theories of harm, it should do so in a manner consistent with the error-cost framework (see reply to Question 6) and should not undercut the benefits and incentives that startup firms derive from the prospect of being acquired by a larger player.
  • Question 9 — Merger control should remain tethered to the analysis of competitive effects within the framework of the significant lessening of competition test (“SLC test”), rather than seeking to foster any particular market structure. Market structure is, at best, an imperfect proxy for competitive effects and, at worst, a deeply misleading one. As such, it should remain just one tool among many in merger analysis, rather than an end in itself.
  • Question 13 — In deciding whether to impose a mandatory-notification regime, Australia should be guided by error-cost considerations, and not merely seek to replicate international trends. While there are sound reasons to prefer a system of mandatory-merger notifications, the Treasury cannot ignore the costs of filing mergers or of reviewing them. It should be noted that some studies suggest that voluntary merger notification may achieve objectives similar to those achieved by compulsory systems at lower cost to the merging parties, as well as to the regulator. If the Treasury nonetheless decides to impose mandatory notification, it should seek to contain unnecessary costs by setting a reasonable turnover threshold, thereby filtering out transactions with little-to-no potential for anticompetitive harm.
  • Question 17 —Australian merger control should require that a decisionmaker be satisfied that a merger would likely and substantially lessen competition before blocking it, rather than effectively reversing the burden of proof by requiring that merging parties demonstrate that it would not. In a misguided attempt to shift the costs of erroneous decisions from the public to the merging parties, the ACCC’s proposal forgets that false positives also impose costs on the public, most notably in the form of foregone consumer benefits. In addition, since the vast majority of mergers are procompetitive, including mergers in the digital sector, there is no objective empirical basis for reversing the burden of proof along the proposed lines.
  • Question 18 — The SLC test should not be amended to include acquisitions that “entrench, materially increase or materially extend a position of substantial market power.” First, the Consultation seems to conflate instances of anticompetitive leveraging with cases where an incumbent in one market enters an adjacent one. The latter is a powerful source of competition and, as such, should not be curtailed. The former is already covered by the SLC test, which equips authorities with sufficient tools to curb the misuse of market power post-merger. Third, it is unclear what the term “materially” would mean in the proposed context, or what it would add to the SLC test. Australian merger control already interprets “substantial” lessening of competition to mean “material in a relative sense and meaningful.” Thus, the term “materially” risks injecting unnecessary uncertainty and indeterminacy into the system.
  • Question 19 — As follows from our response to Question 9, Section 50(3) should not be amended to yield an increased focus on changes to market structure as a result of a merger. It is also unclear what is gained from removing the factors in Section 50(3). More than a “modernization” (as the Consultation calls it), this appears to be a redundancy, as the listed factors already significantly overlap with those commonly used under the SLC test. To the extent that these factors place a “straitjacket” on courts (though in principle they are sufficiently broad and flexible), they could be removed, however, so long as merger analysis remained tethered to the SLC test and respects its overarching logic.
  • Question 20 — Non-competition public benefits should play a limited role in merger control. Competition authorities are, in principle, ill-suited to rank, weigh, and prioritize complex and incommensurable goals and values. The injection of public-benefits analysis into merger review magnifies the risk of discretionary and arbitrary decision making.

III. Consultation Responses

A.   Question 6

Is Australia’s merger regime ‘skewed towards clearance’? Would it be more appropriate for the framework to skew towards blocking mergers where there is sufficient uncertainty about competition impacts?

In order for a merger to be blocked in Australia, it must be demonstrated that the merger is likely to substantially lessen competition. In the context of Section 50, “likely” means a “real commercial likelihood.”[2] Furthermore, a “substantial” lessening of competition need not be “large or weighty… but one that is ‘real or of substance… and thereby meaningful and relevant to the competitive process.’”[3] This does not set an inordinately high bar for authorities to clear.

In a sense, however, the ACCC is right when it says that Australian merger control is “skewed towards clearance.”[4] This is because all merger regimes are “skewed” toward clearance. Even in jurisdictions that require mandatory notifications, only a fraction of mergers—typically, those above a certain turnover threshold—are examined by competition authorities. Only a small percentage of these transactions are subject to conditional approval, and an even smaller percentage still are blocked or abandoned.[5] This means that the vast majority of mergers are allowed to proceed as intended by the parties, and for good reason. As the ACCC itself and the Consultation note, most mergers do not raise competition concerns.[6]

But while partially accurate, this statement is only half true. Most mergers are, in fact, either benign or procompetitive. Indeed, mergers are often an effective way to reduce transaction costs and generate economies of scale in production,[7] which can enable companies to bolster innovation post-merger. According to Robert Kulick and Andrew Card, mergers are responsible for increasing research and development expenditure by as much as $13.5 billion annually.[8] And as Francine Lafontaine and Margaret Slade point out in the context of vertical mergers:

In spite of the lack of unified theory, over all a fairly clear empirical picture emerges. The data appear to be telling us that efficiency considerations overwhelm anticompetitive motives in most contexts. Furthermore, even when we limit attention to natural monopolies or tight oligopolies, the evidence of anticompetitive harm is not strong. [9]

While vertical mergers are generally thought to be less likely to harm competition, this does not cast horizontal mergers in a negative light. It is true that the effects of horizontal mergers are empirically less well-documented. But while there is some evidence that horizontal mergers can reduce consumer welfare, at least in the short run, the long-run effects appear to be strongly positive. Dario Focarelli and Fabio Panetta find:

…strong evidence that, although consolidation does generate adverse price changes, these are temporary. In the long run, efficiency gains dominate over the market power effect, leading to more favorable prices for consumers.[10]

Furthermore, and in line with the above, some studies have found that horizontal merger enforcement has even harmed consumers.[11]

It is therefore only natural that merger regimes should be “skewed” toward clearance. But this is no more a flaw of the system than is the presumption that cartels are harmful. Instead, it reflects the well-documented and empirically grounded insight that most mergers do not raise competition concerns and that there are myriad legitimate, procompetitive reasons for firms to merge.[12]

It also reflects the principle that, since errors are inevitable, merger control should prefer Type II over Type I errors. Indeed, legal decision making and enforcement under uncertainty are always difficult and always potentially costly.[13] Given the limits of knowledge, there is always a looming risk of error.[14] Where enforcers or judges are trying to ascertain the likely effects of a business practice, such as a merger, their forward-looking analysis will seek to infer anticompetitive conduct from limited information.[15] To mitigate risks, antitrust law, generally, and merger control, specifically, must rely on certain heuristics to reduce the direct and indirect costs of the error-cost framework,[16] whose objective is to ensure that regulatory rules, enforcement decisions, and judicial outcomes minimize the expected cost of (1) erroneous condemnation and deterrence of beneficial conduct (“false positives,” or “Type I errors”); (2) erroneous allowance and under-deterrence of harmful conduct (“false negatives,” or “Type II errors”); and (3) the costs of administering the system.

Accordingly, “skewing” the merger-analysis framework toward blocking mergers could, in theory, be appropriate where the enforcer or the courts knew that mergers are always or almost always harmful (as in the case of, e.g., cartels). But we have already established that the opposite is, in fact, true: most mergers are either benign or procompetitive. The Consultation’s caveat that this would apply only in cases where “there is sufficient uncertainty about competition impacts” does not carve out a convincing exception to this principle. This is particularly true given that, in a forward-looking exercise, there is, by definition, always some degree of uncertainty about future outcomes. Given that most mergers are procompetitive or benign, any lingering uncertainty should, in any case, be resolved in favor of allowing a merger, not blocking it.

Concrete evidence of a likely substantial lessening of competition post-merger should therefore continue to be the decisive factor in decisions to block a merger, not uncertainty about its effects (see also the response to Question 17). Under uncertainty, the error-cost framework when applied to antitrust leads in most cases to a preference of Type II over Type I errors, and mergers are no exception.[17] The three main reasons can be summarized as follows. First, “mistaken inferences and the resulting false condemnations are especially costly, because they often chill the very conduct the antitrust laws are designed to protect.”[18] The aforementioned procompetitive benefits of mergers, coupled with the general principle that parties should have the latitude in a free-market economy to buy and sell to and from whomever they choose, are cases in point. Second, false positives may be more difficult to correct, especially in light of the weight of judicial precedent.[19] Third, the costs of a wrongly permitted monopoly are small compared to the costs of competition wrongly condemned.[20] As Lionel Robbins once said: monopoly tends to break, tariffs tend to stick.[21] The same is applicable to prohibited mergers.

In sum, Australia should not skew its merger regime toward blocking mergers under uncertainty.

B.   Question 8

Is there evidence of acquisitions by large firms (such as serial or creeping acquisitions, acquisitions of nascent competitors, ‘killer acquisitions’, and acquisitions by digital platforms) having anti-competitive effects in Australia?

We do not know whether there have been any such cases in Australia. We would, however, like to offer more general commentary on the relevance of nascent competition and killer acquisitions in the context of merger control, especially as concerns digital platforms.

One of the most important concerns about acquisitions by the major incumbent tech platforms is that they can be used to eliminate potential competitors that currently do not compete, but could leverage their existing network to compete in the future—a potential that incumbents can better identify than can competition enforcers.[22]

As the Furman Review states:

In mergers involving digital companies, the harms will often centre around the loss of potential competition, which the target company in an adjacent market may provide in the future, once their services develop.[23]

Similar concerns have been raised in the Stigler Report,[24] the expert report commissioned by Commissioner Margrethe Vestager for the European Commission,[25] and in the ACCC’s own Fifth Interim Report of the Digital Platform Services Inquiry.[26] Facebook’s acquisition of Instagram is frequently cited as a paradigmatic example of this phenomenon.

There are, however, a range of issues with using this concern as the basis for a more restrictive merger regime. First, while doubtless this kind of behavior is a risk, and competition enforcers should weigh potential competition as part of the range of considerations in any merger review, potential-competition theories often prove too much. If one firm with a similar but fundamentally different product poses a potential threat to a purchaser, there may be many other firms with similar, but fundamentally different, products that do, too.

If Instagram, with its photo feed and social features, posed a potential or nascent competitive threat to Facebook when Facebook acquired it, then so must other services with products that are clearly distinct from Facebook but have social features. In that case, Facebook faces potential competition from other services like TikTok, Twitch, YouTube, Twitter (X), and Snapchat, all of which have services that are at least as similar to Facebook’s as Instagram’s. In this case, the loss of a single, relatively small potential competitor out of many cannot be counted as a significant loss for competition, since so many other potential and actual competitors remain.

The most compelling version of the potential and nascent competition argument is that offered by Steven Salop, who argues that since a monopolist’s profits will tend to exceed duopolists’ combined profits, a monopolist will normally be willing and able to buy a would-be competitor for more than the competitor would be able to earn if it entered the market and competed directly, earning only duopoly profits.[27]

While theoretically elegant, this model has limited use in understanding real-world scenarios. First, it assumes that entry is only possible once—i.e., that after a monopolist purchases a would-be competitor, it can breathe easy. But if repeat entry is possible, such that another firm can enter the market at some point after an acquisition has taken place, the monopolist will be engaged in a potentially endless series of acquisitions, sharing its monopoly profits with a succession of would-be duopolists until there is no monopoly profit left.

Second, the model does not predict what share of monopoly profits would go to the entrant, as compared to the monopolist. The entrant could hold out for nearly all of the monopolist’s profit share, adjusted for the entrant’s expected success in becoming a duopolist.

Third, apart from being a poor strategy for preserving monopoly profits—since these may largely accrue to the entrants, under this model—this could lead to stronger incentives for entry than in a scenario where the duopolists were left to compete with one another, leading to more startup formation and entry overall.

Finally, acquisitions of potential competitors, far from harming competition, often benefit consumers. The acquisition of Instagram by Facebook, for example, brought the photo-editing technology that Instagram had developed to a much larger market of Facebook users, and provided those services with a powerful monetization mechanism that was otherwise unavailable to Instagram.[28] As Ben Sperry has written:

Facebook has helped to build Instagram into the product it is today, a position that was far from guaranteed, and that most of the commentators who mocked the merger did not even imagine was possible. Instagram’s integration into the Facebook platform in fact did benefit users, as evidenced by the rise of Instagram and other third-party photo apps on Facebook’s platform.[29]

In other words, many supposedly anticompetitive acquisitions appear that way only because of improvements made to the acquired business by the acquiring platform.[30]

As for “killer acquisitions,” this refers to scenarios in which incumbents acquire a firm just to shut down pipelines of products that compete closely with their own. By eliminating these products and research lines, it is feared that “killer acquisitions” could harm consumers by eliminating would-be competitors and their products from the market, and thereby eliminating an innovative rival. A recent study by Marc Ivaldi, Nicolas Petit, and Selçukhan Ünekbas, however, recommends caution surrounding the killer acquisition “hype.” First, despite the disproportionate attention they have been paid in policy circles, “killer acquisitions” are an exceedingly rare phenomenon. In pharmaceuticals, where the risk is arguably the highest, it is they account for between 5.3% and 7.4% of all acquisitions, while in digital markets, the rate is closer to 1 in 175.[31] The authors ultimately find that:

Examining acquisitions by large technology firms in ICT industries screened by the European Commission, [we find] that acquired products are often not killed but scaled, post-merger industry output demonstrably increases, and the relevant markets remain dynamic post-transaction. These findings cast doubt on contemporary calls for tightening of merger control policies.[32]

Thus, acquisitions of potential competitors and smaller rivals more often than not lead to valuable synergies, efficiencies, and the successful scaling of products and integration of technologies.

But there is an arguably even more important reason why the ACCC should not preventively restrict companies’ ability to acquire smaller rivals (or potential rivals). To safeguard incentives to invest and innovate, it is essential that buyouts remain a viable “way out” for startups and small players. As ICLE has argued previously:

Venture capitalists invest on the understanding that many of the businesses in their portfolio will likely fail, but that the returns from a single successful exit could be large enough to offset any failures. Unsurprisingly, this means that exit considerations are the most important factor for VCs when valuing a company. A US survey of VCs found 89% considered exits important and 48% considered it the most important factor. This is particularly important for later-stage VCs.”[33] (emphasis added)

Indeed, the “killer” label obfuscates the fact that acquisitions are frequently a desired exit strategy for founders, especially founders of startups and small companies. Investors and entrepreneurs hope to make money from the products into which they are putting their time and money. While that may come from the product becoming wildly successful and potentially displacing an incumbent, this outcome can be exceedingly difficult to achieve. The prospect of acquisition increases the possibility that these entrepreneurs can earn a return, and thus magnifies their incentives to build and innovate.[34]

In sum, while potential competition and so-called killer acquisitions are important theories for the ACCC to consider when engaging in merger review, neither theory suggests that the burden of proof needed to reject a merger should be changed, much less warranting an overhaul of the existing merger regime. Furthermore, given the paucity of “killer acquisitions” in the real world, it is highly unlikely that any economic woes that Australia currently faces are due to an epidemic of killer acquisitions or acquisitions of potential/nascent competitors. Indeed, a recent paper by Jonathan Barnett finds the concerns around startup acquisitions to have been vastly exaggerated, while their benefits have been underappreciated:

A review of the relevant body of evidence finds that these widely-held views concerning incumbent/startup acquisitions rest on meager support, confined to ambiguous evidence drawn from a small portion of the total universe of acquisitions in the pharmaceutical market and theoretical models of acquisition transactions in information technology markets. Moreover, the emergent regulatory and scholarly consensus fails to take into account the rich body of evidence showing the critical function played by incumbent/startup acquisitions in supplying a monetization mechanism that induces venture-capital investment and promotes startup entry in technology markets.

In addition:

Proposed changes to merger review standards would disrupt these efficient transactional mechanisms and are likely to have counterproductive effects on competitive conditions in innovation markets.[35]

Accordingly, if the Treasury is going to adopt any rules to address these theories of harm, it should do so in a way consistent with the error-cost framework (see reply to Question 6); that does not undercut the benefits and incentives that derive from the prospect of acquisition by a larger player; and that accurately reflects the real (modest) anticompetitive threat posed by killer acquisitions, rather than one animated by dystopic hyperbole.[36]

C.   Question 9

Should Australia’s merger regime focus more on acquisitions by firms with market power, and/or the effect of the acquisitions on the overall structure of the market?

Merger control should remain tethered to analysis of competitive effects within the framework of the SLC test, rather than on fostering any particular market structure. Market structure is, at best, an imperfect proxy for competitive effects and, at worst, a misleading one. As such, it should be considered just one tool among many for scrutinizing mergers, not an end in itself.

To start, the assumption that “too much” concentration is harmful presumes both that the structure of a market is what determines economic outcomes, and that anyone knows what the “right” amount of concentration is.[37] But as economists have understood since at least the 1970s, (despite an extremely vigorous, but ultimately futile, effort to show otherwise), market structure is not outcome determinative.[38] As Harold Demsetz has written:

Once perfect knowledge of technology and price is abandoned, [competitive intensity] may increase, decrease, or remain unchanged as the number of firms in the market is increased.… [I]t is presumptuous to conclude… that markets populated by fewer firms perform less well or offer competition that is less intense.[39]

This view is well-supported, and held by scholars across the political spectrum.[40] To take one prominent recent example, professors Fiona Scott Morton (deputy assistant attorney general for economics in the U.S. Justice Department Antitrust Division under President Barack Obama), Martin Gaynor (former director of the Federal Trade Commission Bureau of Economics under President Obama), and Steven Berry surveyed the industrial-organization literature and found that presumptions based on measures of concentration are unlikely to provide sound guidance for public policy:

In short, there is no well-defined “causal effect of concentration on price,” but rather a set of hypotheses that can explain observed correlations of the joint outcomes of price, measured markups, market share, and concentration.… Our own view, based on the well-established mainstream wisdom in the field of industrial organization for several decades, is that regressions of market outcomes on measures of industry structure like the Herfindahl Hirschman Index should be given little weight in policy debates.[41]

The absence of correlation between increased concentration and both anticompetitive causes and deleterious economic effects is also demonstrated by a recent, influential empirical paper by Shanat Ganapati. Ganapati finds that the increase in industry concentration in U.S. non-manufacturing sectors between 1972 and 2012 was “related to an offsetting and positive force—these oligopolies are likely due to technical innovation or scale economies. [The] data suggests that national oligopolies are strongly correlated with innovations in productivity.”[42] In the end, Ganapati found, increased concentration resulted from a beneficial growth in firm size in productive industries that “expand[s] real output and hold[s] down prices, raising consumer welfare, while maintaining or reducing [these firms’] workforces.”[43] Sam Peltzman’s research on increasing concentration in manufacturing finds that it has, on average, been associated with both increased productivity growth and widening margins of price over input costs. These two effects offset each other, leading to “trivial” net price effects.[44]

Further, the presence of harmful effects in industries with increased concentration cannot readily be extrapolated to other industries. Thus, while some studies have plausibly shown that an increase in concentration in a particular case led to higher prices (although this is true in only a minority of the relevant literature), assuming the same result from an increase in concentration in other industries or other contexts is simply not justified:

The most plausible competitive or efficiency theory of any particular industry’s structure and business practices is as likely to be idiosyncratic to that industry as the most plausible strategic theory with market power.[45]

As Chad Syverson recently summarized:

Perhaps the deepest conceptual problem with concentration as a measure of market power is that it is an outcome, not an immutable core determinant of how competitive an industry or market is… As a result, concentration is worse than just a noisy barometer of market power. Instead, we cannot even generally know which way the barometer is oriented.[46]

In other words, depending on the nature and dynamics of the market, competition may well be protected under conditions that preserve a certain number of competitors in the relevant market. But competition may also be protected under conditions in which a single winner takes all on the merits of their business.[47] It is reductive, and bad policy, to presume that a certain number of competitors is always and everywhere conducive to better economic outcomes, or indicative of anticompetitive harm.

This does not mean that concentration measures have no use in merger enforcement. Instead, it demonstrates that market concentration is often unrelated to antitrust enforcement because it is driven by factors that are endogenous to each industry. In revamping its merger-control rules, Australia should be careful not to rely too heavily on structural presumptions based on concentration measures, as these may be poor indicators of those cases where antitrust enforcement would be most beneficial to consumers.

In sum, market structure should remain only a proxy for determining whether a transaction significantly lessens competition. It should not be at the forefront of merger review. And it should certainly not be the determining factor in deciding whether to block a merger.

D.   Question 13

Should Australia introduce a mandatory notification regime, and what would be the key considerations for designing notification thresholds?

The ACCC has argued that Australia is an “international outlier” in not requiring mandatory notification of mergers.[48] While it is true that most countries with merger-control rules also require mandatory notification of mergers when these exceed a certain threshold, there are also notable examples where this is not the case. For example, the United Kingdom, one of the leading competition jurisdictions in the world, does not require mandatory notification of mergers.

In deciding whether to impose a mandatory-notification regime and accompanying notification thresholds, Australia should not—as a matter of principle—be guided by international trends. International trends may be a useful indicator, but they can also be misleading. Instead, Australia’s decision should be informed by close analysis of error costs. In particular, Australia should seek to understand how a notification regime would affect the balance between Type I and Type II errors in this context. A notification regime would presumably reduce false negatives without necessarily increasing false positives, which is a good outcome.

In its calculation, however, the Treasury cannot ignore the costs of filing mergers and of reviewing them. If designed poorly, mandatory notifications can be a burden for the merging firms, for third parties, and for the reviewing authorities, siphoning resources that could be better deployed elsewhere. It is here where a voluntary-notification regime could have an edge over the alternative. For instance, a study by Chongwoo Choe comparing systems of compulsory pre-merger notification with the Australian system of voluntary pre-merger notification found that:

Thanks to the signaling opportunity that arises when notification is voluntary, voluntary notification leads to lower enforcement costs for the regulator and lower notification costs for the merging parties. Some of the theoretical predictions are supported by exploratory empirical tests using merger data from Australia. Overall, our results suggest that voluntary merger notification may achieve objectives similar to those achieved by compulsory systems at lower costs to the merging parties as well as to the regulator.[49] (emphasis added).

If the Treasury nonetheless decides to mandate merger notification, the next step would be to establish a notification threshold, as it is evident that not all mergers can, or should, be notified to the Australian authorities. Indeed, many mergers may be patently uninteresting from a competition perspective (e.g., one small supermarket in Perth buying another), while others might not have a significant nexus with Australia (e.g., where an international company that does modest business in Australia buys a shop in Spain).[50] Too many merger notifications strain the public’s limited resources and disproportionately affect smaller companies, as these companies are less capable of covering administrative costs and filing fees. To mitigate such unnecessary costs, the Treasury should establish reasonable thresholds that help filter out transactions where the merging parties are unlikely to have significant market power post-merger.

But what constitutes a reasonable threshold? Our view is that there is no need to reinvent the wheel here. Turnover has typically been used as a proxy for a merger’s competitive impact because it offers a first indicator of the parties’ relative position on the market. Despite the Consultation’s claim that “mergers of all sizes are potentially capable of raising competition concerns,”[51] where the parties (and especially the target company) have either no or only negligible turnover in Australia, it is highly unlikely that the merger will significantly lessen competition. If the Treasury decides to impose mandatory notification for mergers, it should therefore consider using a turnover-based threshold.

E.    Question 17

Should Australia’s merger control regime require the decision-maker to be satisfied that a proposed merger:

  • would be likely to substantially lessen competition before blocking it; or

  • would not be likely to substantially lessen competition before clearing it?

The second option would essentially reverse the burden of proof in merger control. Instead of requiring the authority to prove that a merger would substantially lessen competition, it would fall on the merging parties to prove a negative—i.e., that the merger would not be likely to substantially lessen competition.

The ACCC has made this proposal because it:

Means that the risk of error is borne by the merger parties rather than the public. In the cases where this difference matters (for example where there is uncertainty or a number of possible future outcomes), the default position should be to leave the risk with the merger parties, not to put at risk the public interest in maintaining the state of competition into the future.[52]

The Consultation sympathizes. It recognizes that “there are trade-offs between the risks of false positives and false negatives in designing a merger test,” but contends that, while both lead to lower output, higher prices, lower quality, and less innovation, “allowing anti-competitive mergers means that merging parties benefit at the expense of consumers.”[53]

But this argument is based on a flawed premise. The risk of error—whether Type I or Type II error—is always borne by the public. The public is harmed by false positives in at least two ways. First, and most directly, it suffers harm through the foregone benefits that could have accrued from a procompetitive merger. As we have shown in our responses to Questions 6, 8, and 9, these benefits are common and can be economically substantial. Second, but no less important, false positives chill merger activity and discourage future mergers. This also negatively affects the public.

The extent to which chilling merger activity harms the public has, however, been obfuscated by a contrived dichotomy between “the public” and the merging parties, which taints the ACCC’s argumentation and skews the Conclusion. The merging parties are also part of society and, therefore, also part of “the public.” An unduly restrictive merger regime that prioritizes avoiding false negatives over false positives harms consumers. But it also harms the “public” more broadly, insofar as anyone could, potentially, have a direct interest in a merger, either as a stakeholder or a party to that merger.

In addition, a regime that requires companies to prove that a deal is not harmful (with the usual caveats about the difficulty of proving a negative) before being allowed to proceed unduly restricts economic freedom and the rights of defense—both of which are very “public” benefits, as everyone, in principle, benefits from them. These elements should also be taken into consideration when weighing the costs and benefits of Type I and Type II errors. That balancing test should, in our view, generally favor false negatives, as argued in our response to Question 6.

Finally, there is no objective, material justification for “[shifting] the default position from allowing mergers to proceed where there is uncertainty [which is, by definition, always in a merger review process that is forward-looking] to a position where, if there is sufficient uncertainty about the effects of a merger, it would not be cleared.” As discussed in our answer to Question 6, the vast majority of mergers are procompetitive, including mergers in the digital sector, or mergers that involve digital platforms. This presumption is reflected in the requirement, common across antitrust jurisdictions, that enforcers must make a prima facie case that a merger will be anticompetitive before the merging parties have a duty to respond. There has been no major empirical finding or theoretical revelation in recent years that would justify reversing this burden of proof. Indeed, any change along these lines would be guided by ephemeral political and industrial-policy exigencies, rather than by robust principles of law and economics. In our view, these are not sound reasons for flipping merger review on its head.

In sum, Australian merger control should require that a decisionmaker be satisfied that a merger would be likely to substantially lessen competition before blocking it.

F.    Question 18

Should Australia’s substantial lessening of competition test be amended to include acquisitions that ‘entrench, materially increase or materially extend a position of substantial market power’?

According to the ACCC:

Under the current substantial lessening of competition test, it may be difficult to stop acquisitions that lead to a dominant firm extending their market power into related or adjacent markets.[54]

The ACCC imagines this is a problem, particularly in digital markets. Preventing dominant firms from leveraging their market power in one market to restrict competition in an adjacent one is a legitimate concern. We should, however, be clear about what is meant by “materially increase or materially extend a position of substantial market power.”

Merger control should not, as a matter of principle, seek to prevent incumbents from entering adjacent markets. Large firms moving into the core business of competitors from adjacent markets often represents the biggest source of competition for incumbents, as it is often precisely these firms who have the capacity to contest competitors’ dominance in their core businesses effectively. This scenario is prevalent in digital markets, where incumbents must enter multiple adjacent markets, most often by supplying highly differentiated products, complements, or “new combinations” of existing offerings.[55]

Moreover, it is unclear why the SLC test in its current state is insufficient to curb the misuse of market power. The SLC test is a standard used by regulatory authorities to assess the legality of proposed mergers and acquisitions. Simply put, it examines whether a prospective merger is likely to substantially lessen competition in a given market, with the purpose of preventing mergers that increase prices, reduce output, limit consumer choice, or stifle innovation as a result of a decrease in competition.

The SLC test is one of the two major tests deployed by competition authorities to determine whether a merger is anticompetitive, the other being the dominance test. Most merger-control regimes today use the SLC test, and for two good reasons. The first is that, under the dominance test, it is difficult to assess coordinated effects and non-horizontal mergers.[56] The other, mentioned in the Consultation, is that the SLC test allows for more robust effects-based economic analysis.[57]

The SLC test examines likely coordinated and non-coordinated effects in all three types of mergers: horizontal, vertical, and conglomerate. Horizontal mergers may substantially lessen competition by eliminating a significant competitive constraint on one or more firms, or by changing the nature of competition such that firms that had not previously coordinating their behavior will be more likely to do so. Vertical and conglomerate mergers tend to pose less of a risk to competition.[58] Still, there are facts and circumstances under which they can substantially lessen competition by, for example, foreclosing rivals from necessary inputs, supplies, or markets. These outcomes will often be associated with an increase in market power. As the OECD has written:

The focus of the SLC test lies predominantly on the impact of the merger on existing competitive constraints and on measuring market power post-merger.[59]

In other words, the SLC test already accounts for increases in market power that are capable and likely of harming competition. As to whether the “entrenchment” of market power—in line with the 2022 amendments to Canadian competition law—should be added to the SLC test, there is no reason to believe that this is either necessary or appropriate in the Australian context. The 2022 amendments to the Canadian competition law mentioned in the Consultation[60] largely align Canada’s merger control with its abuse-of-dominance provision, which prohibits anti-competitive activities that damage or eliminate competitors and that “preserve, entrench or enhance their market power.”[61] But in Australia, Section 46 (the equivalent of the Canadian abuse-of-dominance provision) prohibits conduct “that has the purpose, or has or is likely to have the effect, of substantially lessening competition.” The proposed amendment would thus create a discrepancy between merger control and Section 46, where the latter would remain tethered to an SLC test, and the former would shift to a new standard. Additionally, since it remains unclear what the results of Canada’s 2022 merger-control amendments have been or will be, it would be wiser for Australia to adopt a “wait and see” approach before rushing to replicate them.

Lastly, there is the question of defining “materiality” in the context of an increase or entrenchment of market power. Currently, Section 50 prohibits mergers that “substantially lessen competition,” with no mention of materiality.[62] The Merger Guidelines do, however, state that:

The term “substantial” has been variously interpreted as meaning real or of substance, not merely discernible but material in a relative sense and meaningful.[63] (emphasis added)

The proposed amendment follows suit, referring to the concepts of “material increase” and “material extension” of market power. What does this mean? How does a “material increase” in market power differ from a non-material one? In its comments to the American Innovation and Choice Online Act (“AICOA”), the American Bar Association’s Antitrust Law Section criticized the bill for using amorphous terms such as “fairness,” “preferencing,” and “materiality,” or the “intrinsic” value of a product. Because these concepts were not defined either in the legislation or in existing case law, the ABA argued that they injected variability and indeterminacy into how the legislation would be administered.[64] The same argument applies here.

Accordingly, the SLC test should not be amended to include acquisitions that “entrench, materially increase or materially extend a position of substantial market power.”

G.   Question 19

Should the merger factors in section 50(3) be amended to increase the focus on changes to market structure as a result of a merger? Or should the merger factors be removed entirely?

On market structure, see our responses to Question 9 and Question 18.

The merger factors under Section 50(3) already overlap with the factors typically used under the SLC test. These include the structure of related markets; the merger’s underlying economic rationale; market accessibility for potential entrants; the market shares of involved undertakings; whether the market is capacity constrained; the presence of competitors (existing and potential); consumer behavior (the willingness and ability of consumers to switch to alternative products); the likely effect on consumers; the financial investment required for market entry; and the market share necessary for a buyer or seller to achieve profitability or economies of scale.

Similarly, Section 50(3) contains a list of the factors to be considered under the SLC test, including barriers to entry, the intensity of competition on the market, the likely effects on price and profit margins, and the extent of vertical integration, among others. Structural questions, such as the degree of concentration on the market, are also one of the listed factors under Section 50(3).

As a result, it is unclear how eliminating the merger factors would transform the SLC test, or why there should be more emphasis on market structure (on the proper role of market structure in merger-control analysis, see our answers to Question 9 and Question 18).

In sum, Section 50(3) should not be amended to increase the focus on changes to market structure as a result of a merger. It is also not clear what is gained from removing the factors in Section 50(3). More than a “modernization” (as the Consultation calls it),[65] the change appears redundant. To the extent that these factors place a “straitjacket” on courts (though, in principle, they are broad enough to be sufficiently flexible), however, they could be removed, so long as merger analysis remains tethered to the SLC test.

H.  Question 20

 Should a public benefit test be retained if a new merger control regime was introduced?

Antitrust law, including merger control, is not a “Swiss Army knife.”[66] Public-interest considerations should generally have limited to no weight in merger analysis, except in extremely specific cases proscribed by the law (e.g., public security and defense considerations). Expanding merger analysis to encompass non-competition concerns risks undermining the rule of law, diminishing legal certainty, and harming consumers.

In Australia, the Competition Act currently does not expressly limit the range of public benefits (or detriments) that may be taken into account by the ACCC when deciding whether to block or allow a merger (this includes not limiting them to those that address market failure or improve economic efficiency).[67] Thus, “anything of value to the community generally, any contribution to the aims pursued by the society” could, in theory, be considered a public benefit for the purpose of the public-benefit test.[68] The authorization regime also does not require the ACCC to quantify the level of public benefits and detriments.

Competition authorities are, in principle, ill-suited to rank, weigh, and prioritize complex, incommensurable goals and values against one other. They lack the expertise to meaningfully evaluate political, social, environmental, and other goals. They are independent agencies with a strict, narrow mandate, not political decision makers tasked with redistributing wealth or guiding society forward. Requiring them to consider broad public considerations when deciding on mergers magnifies the risk of discretionary and arbitrary decision making and undercuts legal certainty. This is as true for blocking mergers on the basis of public detriments as it is for allowing them on the basis of public benefits. By contrast, the consumer-welfare standard, which forms the basis of the SLC, is properly understood as:

Offer[ing] a tractable test that is broad enough to contemplate a variety of evidence related to consumer welfare but also sufficiently objective and clear to cabin discretion and honor the principle of the rule of law. Perhaps most significantly, it is inherently an economic approach to antitrust that benefits from new economic learning and is capable of evaluating an evolving set of commercial practices and business models.[69]

Consequently, we recommend that the public-interest test be jettisoned from merger analysis, or at least very narrowly circumscribed, if a new merger-control regime is introduced in Australia.

I.      Question 24

What is the preferred option or combination of elements outlined above? What implementation considerations would need to be taken into account?

In our opinion, and based on the arguments espoused in this submission, the best options would be as follows:

[1] International Center for Law & Economics,

[2] Australian Competition and Consumer Commission v Pacific National Pty Limited [2020] FCAFC 77, [246].

[3] Australian Competition and Consumer Commission v Pacific National Pty Limited [2020] FCAFC 77, [104].

[4] Outline to Treasury: ACCC’s Proposals for Merger Reform, Australian Competition and Consumer Commission (2023), 5, 8, available at

[5] For example, in the EU, 94% of mergers are cleared without commitments, whereas only about 6% are allowed with remedies, and less than 0.5% of mergers are blocked or withdrawn by the parties. See Joanna Piechucka, Tomaso Duso, Klaus Gugler, & Pauline Affeldt, Using Compensating Efficiencies to Assess EU Merger Policy, VoxEU (10 Jan. 2022),

[6] Consultation, 4; ACCC 2023: 2, point 8e.

[7] Ronald Coase, The Nature of the Firm, 4(16) Economica 386-405 (Nov. 1937).

[8] Robert Kulick & Andre Card, Mergers, Industries, and Innovation: Evidence from R&D Expenditure and Patent Applications, NERA Economic Consulting (Feb. 2023), available at

[9] Francine Lafontaine & Margaret Slade, Vertical Integration and Firm Boundaries: The Evidence, 45(3) Journal of Economic Literature 677 (Sep. 2007).

[10] Dario Focarelli & Fabio Panetta, Are Mergers Beneficial to Consumers? Evidence from the Market for Bank Deposits, 93(4) American Economic Review 1152 (Sep. 2003).

[11] B. Espen Eckbo & Peggy Wier, Antimerger Policy Under the Hart-Scott-Rodino Act: A Reexamination of the Market Power Hypothesis, 28(1) Journal of Law & Economics 121 (Apr. 1985).

[12] See, e.g., in the context of tech mergers: Sam Bowman & Sam Dumitriu, Better Together: The Procompetitive Effects of Mergers in Tech, The Entrepreneurs Network & International Center for Law & Economics (Oct. 2021), available at

[13] Geoffrey A. Manne, Error Costs in Digital Markets, in Joshua D. Wright & Douglas H. Ginsburg (eds.), The Global Antitrust Institute Report on the Digital Economy, 33-108 (2020).

[14] Robert H. Mnookin & Lewis Kornhauser, Bargaining in the Shadow of the Law: The Case of Divorce, 88(5) Yale Law Journal 950-97, 968 (Apr. 1979).

[15] See, e.g., in the context of predatory pricing, Paul L. Joskow & Alvin K. Klevorick, A Framework for Analyzing Predatory Pricing Policy, 89(2) Yale Law Journal 213-70 (Dec. 1979).

[16] Manne, supra note 13, at 34, 41.

[17] Id.

[18] Verizon Comm’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 414 (2004) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 594 (1986)).

[19] Frank H. Easterbrook, The Limits of Antitrust, 63(1) Texas Law Review 1-40, 2-3, 15-16 (Aug. 1984).

[20] Id., (“Other things equal, we should prefer the error of tolerating questionable conduct, which imposes losses over a part of the range of output, to the error of condemning beneficial conduct, which imposes losses over the whole range of output.”)

[21] Lionel Robbins, Economic Planning and International Order, 116, (1937).

[22] This section is adapted, in part, from Bowman & Dumitriu, supra note 12.

[23] Jason Furman, et al., Unlocking Digital Competition: Report of the Digital Competition Expert Panel (Mar. 2019), 98, available at (“Furman Review”).

[24] Committee for the Study of Digital Platforms Market Structure and Antitrust Subcommittee Report, Stigler Center for the Study of the Economy and the State (2019), 75, 88, available at—report-as-of-15-may-2019.pdf (“Stigler Report”).

[25] Yves-Alexandre de Motjoye, Heike Schweitzer, & Jacques Crémer, Competition Policy for the Digital Era, European Commission Directorate-General for Competition (2019), 110-112,

[26] See Sections 3.2., 6.2.2. of the Digital Services Platform Inquiry of September 2022, which finds a “high risk of anticompetitive acquisitions by digital platforms,” available at

[27] Steven Salop, Potential Competition and Antitrust Analysis: Monopoly Profits Exceed Duopoly Profits, Georgetown Law Faculty Publications and Other Works 2380 (Apr. 2021), available at

[28] Geoffrey A. Manne, et al., Comments of the International Center for Law & Economics on the FTC & DOJ Draft Merger Guidelines, International Center for Law & Economics (18 Sep. 2023), 38, available at

[29] Ben Sperry, Killer Acquisition of Successful Integration: The Case of the Facebook/Instagram Merger, The Hill (8 Oct. 2020),

[30] Sam Bowman & Geoffrey A. Manne, Killer Acquisitions: An Exit Strategy for Founders, International Center for Law & Economics (Jul. 2020), available at

[31] See Colleen Cunningham, Florida Ederer, & Song Ma, Killer Acquisitions, 129(3) Journal of Political Economy 649-702 (Mar. 2021); see also Axel Gautier & Joe Lamesch, Mergers in the Digital Economy 54 Information Economics and Policy 100890 (2 Sep. 2020).

[32] Marc Ivaldi, Nicolas Petit, & Selçukhan Ünekbas, Killer Acquisitions in Digital Markets May be More Hype than Reality, VoxEU (15 Sep. 2023), (“The majority of transactions triggered increasing levels of competition in their respective markets.”)

[33] Bowman & Dumitriu, supra note 12.

[34] Bowman & Manne, supra note 30.

[35] Jonathan Barnett, “Killer Acquisitions” Reexamined: Economic Hyperbole in the Age of Populist Antitrust, USC Class Research Paper 23-1 (28 Aug. 2023),

[36] On the current wave of dystopian thinking in antitrust law, especially surrounding anything “digital,” see Dirk Auer & Geoffrey A. Manne, Antitrust Dystopia and Antitrust Nostalgia: Alarmist Theories of Harm in Digital Markets and their Origins, 28(4) George Mason Law Review 1281 (9 Sep. 2021).

[37] The response to this question is adapted from Manne, et al., supra note 28.

[38] See, e.g., Harold Demsetz, Industry Structure, Market Rivalry, and Public Policy, 16(1) Journal of Law & Economics 1-9 (Apr. 1973).

[39] See Harold Demsetz, The Intensity and Dimensionality of Competition, in Harold Demsetz, The Economics of the Business Firm: Seven Critical Commentaries 137, 140-41 (1995).

[40] Nathan Miller, et al., On the Misuse of Regressions of Price on the HHI in Merger Review, 10(2) Journal of Antitrust Enforcement 248-259 (28 May 2022).

[41] Steven Berry, Martin Gaynor, & Fiona Scott Morton, Do Increasing Markups Matter? Lessons from Empirical Industrial Organization, 33(3) Journal of Economic Perspectives 44-68, 48 (2019).

[42] Shanat Ganapati, Growing Oligopolies, Prices, Output, and Productivity, 13(3) American Economic Journal: Microeconomics 309-327, 324 (Aug. 2021).

[43] Id., 309.

[44] Sam Peltzman, Productivity, Prices and Productivity in Manufacturing: a Demsetzian Perspective, Coase-Sandor Working Paper Series in Law and Economics 917, (19 Jul. 2021).

[45] Timothy F. Bresnahan, Empirical Studies of Industries with Market Power, in Richard Schmalensee & Robert Willig (eds.), Handbook of Industrial Organization, 1011, 1053-54 (1989).

[46] Chad Syverson, Macroeconomics and Market Power: Context, Implications, and Open Questions, 33(3) Journal of Economic Perspectives 23-43, 26 (2019).

[47] Nicolas Petit & Lazar Radic, The Necessity of the Consumer Welfare Standard in Antitrust Analysis, ProMarket (18 Dec. 2023),

[48] ACCC, 2023: 5.

[49] Chongwoo Choe, Compulsory or Voluntary Pre-Merger Notification? Theory and Some Evidence, 28(1) International Journal of Industrial Organization 10-20 (Jan. 2010).

[50] For an overview of the impact of unnecessary transaction costs in merger notification in the context of Ireland, see  Paul K. Gorecki, Merger Control in Ireland: Too Many Unnecessary Notifications?, ESRI Working Paper No. 383 (2011),

[51] Consultation, 24.

[52] ACCC, 2023, 9.

[53] Consultation, 29.

[54] Consultation, 19; ACCC, 2023: 6-7.

[55] Nicolas Petit, Big Tech and the Digital Economy: The Moligopoly Scenario (2020); see also Walid Chaiehoudj, On “Big Tech and the Digital Economy”: Interview with Professor Nicolas Petit, Competition Forum (11 Jan. 2021),

[56] Standard for Merger Review, Organisation for Economic Co-operation and Development (11 May 2010), 6, available at

[57] Id.; see also Consultation, 31, indicating that “[SLC test] would enable mergers to be assessed on competition criteria but not prescriptively identify which competition criteria should be taken into account. It may permit more flexible application of the law and a greater degree of economic analysis in merger decision-making” (emphasis added).

[58] See, e.g., European Commission, Guidelines on the Assessment of Non-Horizontal Mergers Under the Council Regulation on the Control of Concentrations Between Undertakings (2008/C 265/07), paras. 11-13.

[59] OECD, supra note 56, at 16; see also European Commission, Guidelines on the Assessment of Horizontal Mergers Under the Council Regulation on the Control of Concentrations between Undertakings (2004/C 31/03).

[60] Consultation, 30-31.

[61] Canadian Competition Act, Sections 78 and 79.

[62] Section 44G, however, does mention a “material increase in competition.” (emphasis added).

[63] ACCC, Merger Guidelines (2008), available at ; see also Australia, Senate 1992, Debates, vol. S157, p. 4776, as cited in the Merger Guidelines (2008).

[64] Geoffrey A. Manne & Lazar Radic, The ABA’s Antitrust Law Section Sounds the Alarm on Klobuchar-Grassley, Truth on the Market (12 May 2022),

[65] Consultation, 39.

[66] Geoffrey A. Manne, Hearing on “Reviving Competition, Part 5: Addressing the Effects of Economic Concentration on America’s Food Supply,” U.S. House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law (19 Jan. 2021), available at

[67] Out-of-Market Efficiencies in Competition Enforcement – Note by Australia, Organisation for Economic Co-operation and Development (6 Dec. 2023), available at

[68] Re Queensland Co-Op Milling Association Limited and Defiance Holdings Limited (QCMA) (1976) ATPR 40-012.

[69] Elyse Dorsey, et al., Consumer Welfare & The Rule of Law: The Case Against the New Populist Antitrust Movement, 47 Pepperdine Law Review 861 (1 Jun. 2020).

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Antitrust & Consumer Protection

Playing the Imitation Game in Digital Market Regulation – A Cautionary Analysis for Brazil

Regulatory Comments Introduction On 11 October 2022, João Maia (Federal Deputy, Partido Liberal) proposed Bill 2768/22 (“Bill 2768” or “Bill”) on digital market regulation.[1] Bill 2768 is . . .


On 11 October 2022, João Maia (Federal Deputy, Partido Liberal) proposed Bill 2768/22 (“Bill 2768” or “Bill”) on digital market regulation.[1] Bill 2768 is Brazil’s response to global trends toward the ex-ante regulation of digital platforms, and was at least partially inspired by the EU’s Digital Markets Act (“DMA”).[2] In our contribution to the public consultation on Bill 2768 (“Consultation”),[3] however, we argue that Brazil should be wary of importing untested regulation into its own, unique context. Rather than impulsively replicating the EU’s latest regulatory whim, Brazil should adopt a more methodical, evidence-based approach. Sound regulation requires that new rules be underpinned by a clear vision of the specific market failures they aim to address, as well as an understanding of the costs and potential unintended consequences. Unfortunately, Bill 2768 fails to meet these prerequisites. As we show in our response to the Consultation, it is far from clear that competition law in Brazil has failed to address issues in digital markets to the extent that would make sui generis digital regulation necessary. Indeed, it is unlikely that there are any truly “essential facilities” in the Brazilian digital market that would make access regulation necessary, or that “data” represents an unsurmountable barrier to entry. Other aspects of the Bill—such as the designation of Anatel as the relevant enforcer, the extremely low turnover thresholds used to ascertain gatekeeper status, and the lack of consideration given to consumer welfare as a relevant parameter in establishing harm or claiming an exemption—are also misguided. As it stands, therefore, Bill 2768 not only risks straining Brazil’s limited public resources, but also harming innovation, consumer prices, and the country’s thriving startup ecosystem.

Question 1

Identification of “essential facilities” in the universe of digital markets. Give examples of platform assets in the digital market operating in Brazil where at the same time: a) there are no digital platforms with substitute assets close to these assets b) these assets are difficult to duplicate efficiently at least close to the owning company c) without access to this asset, it would not be possible to operate in one or more markets, as it constitutes a fundamental input. Justify each of the examples given.

For the reasons we discuss below, it is unlikely that there are any examples of true “essential facilities” in digital markets in Brazil.

It important to define the meaning of “essential facility” precisely. The concept of essential facility is a state-of-the-art term used in competition law, which has been defined differently across jurisdictions. Still, the overarching idea of the essential facilities doctrines is that there are instances in which denial of access to a facility by an incumbent can distort competition. To demarcate between cases where denial of access constitutes a legitimate expression of competition on the merits from instances in which it indicates anticompetitive conduct, however, courts and competition authorities have devised a series of tests.

Thus, in the EU, the seminal Bronner case established that the essential facilities doctrine applies in Art. 102 TFEU cases when:

  1. The refusal is likely to eliminate all competition in the market on the part of the person requesting the service;
  2. The refusal is incapable of being objectively justified; and
  3. The service in itself is indispensable to carrying out that person’s business, i.e., there is no actual or potential substitute for the requested input.[4]

In addition, the facility must be genuinely “essential” to compete, not merely convenient.

Similarly, CADE has incorporated the essential facilities doctrine into Brazilian competition policy by imposing a duty to deal with competitors.[5]

The definition of “essential facilities” and, consequently, the breadth and limits of the essential facilities doctrine under Bill 2768/2022 (“Bill 2768”) should reflect tried and tested principles from competition law. There is no reason why essential facilities should be treated differently in “digital” markets, i.e., markets involving digital platforms, than in other markets. In this sense, we are concerned that the framing of Question 1 reveals an inconsistency that should be addressed before moving forward; namely, when a company’s assets are “difficult” to replicate efficiently, it is justified to force a competitor to grant access to those assets. This is misguided and could even produce the opposite of what Bill 2768 presumably aims to achieve.

As indicated above, the fundamental concept underpinning the essential facilities doctrine is that it applies to a product or service that is uneconomic or impossible to duplicate. Typically, this has applied to infrastructure, such as telecommunications or railways. For instance, expecting competitors to duplicate transport routes, such as railways, would be unrealistic — and economically wasteful. Instead, governments have often chosen to regulate these sectors as natural monopoly public utilities. Predominantly, this includes mandating access to all comers to such essential facilities under regulated prices and non-discriminatory conditions that make the activity of other companies viable and competitive—thus facilitating competition on a secondary market in situations in which competition might otherwise be impossible.

The government should ask itself to what extent this logic applies to so-called digital platforms, however.

Online search engines, for example, are not impossible or excessively difficult to replicate—nor is access to any one of them indispensable. Today, many search engines are on the market: Bing, Yandex, Ecosia, DuckDuckGo, Yahoo!, Google, Baidu,, and Swisscows, among others.

More to the point, mere access to search engines isn’t really a problem. Rather, in most cases, those complaining about a search engine’s activity typically complain about access to the very first results, or they complain about the search engine prioritizing its own secondary-market services over those of the competitor. But this space is vanishingly scarce; there is no way for it to be allocated to all comers. Nor can it be allocated on neutral terms; by definition, a search engine must prioritize results.

Treating a search engine as an essential facility would generate problematic outcomes. For example, mandating non-discriminatory access to a search engine’s top results would be like requiring that a railroad offer service to all shippers at whatever time the shipper liked, regardless of railroad congestion, other shippers’ timetables, and the railroad’s optimization of its schedule. Not only would this be impossible, but it isn’t even required of traditional essential facilities.

Notably, while ranking high on a search engine results page is undoubtedly a boon for business, there are other ways of reaching customers. Indeed, as CADE ruled in a case concerning Google Shopping, even if the first page of Google’s result is relevant and important to ranked websites, it is not irreplaceable to the extent that there are other ways for consumers to find websites online. Google is not a mandatory intermediary for website access.[6] Moreover, as noted, search results pages must, by definition, discriminate in order to function correctly. Deeming them essential facilities would entail endless wrangling (and technically complicated determinations) to decide if the search engine’s prioritization decisions were “proper” or not.

Similarly, online retail platforms like Amazon and Mercado Livre are very successful and convenient, but sellers can use other methods to reach customers. For example, they can sell from brick-and-mortar stores or easily set up their own retail websites using myriad software-as-a-service (“SaaS”) providers to facilitate processing and fulfilling orders. Furthermore, the concurrent presence and success of Mercado Livre, B2W (,, Shoptime, Soubarato), Cnova (,,, Magazine Louiza, and Amazon on the Brazilian market belies the claim that any one of these platforms is indispensable or irreplicable.[7]

Similar arguments can be made about the other digital platforms covered by Art. 6, paragraph II of Bill 2768. For example, WhatsApp may be by far the most popular interpersonal communication service in the country. Still, there are plenty of alternatives within easy (and mostly free) reach for Brazilian consumers, such as Messenger (62 million users), Telegram (30 million), Instagram (64 million), Viber (3 million), Hangouts (2 million), WeChat (1 million), Kik (500,000 users), and Line (1 million users). The sheer number of users of every app suggests that multi-homing is widespread.

In sum, while access to a particular digital platform may be convenient, especially if it is currently the most popular among users, it is highly questionable whether such access is essential. And, as Advocate General Jacobs noted in his opinion in Bronner, mere convenience does not create a right of access under the essential facilities doctrine.[8]

Recommendation: Bill 2768 should make it clear that the principles and requirements of “essential facilities” within the meaning of competition law apply in full to the duties and obligations contemplated in Art. 10 — and that the finding of an “essential facility” is a prerequisite to the imposition of any such duties or obligations.

Question 2

Is regulation necessary to guarantee access to the asset(s) of the example(s) from Question 1? What should such regulation guarantee so that access to the asset enables third parties to enter those digital markets?

Before considering whether regulation is necessary to guarantee access to assets of certain companies, the government should first consider whether guaranteeing any such access is necessary and legitimate. In our response to Question 1, we have argued that it is unlikely to be. If the government nevertheless decides to the contrary, the next logical question should be whether competition law, including the essential facilities doctrine itself, are sufficient to address any such alleged problems as are identified in Question 2.

Arguably, the best way to answer this question would be through the natural experiment of letting CADE bring cases against digital platforms — assuming it can construct a prima facie case in each instance — and seeing whether or not traditional competition law tools provide a viable solution and, if not, whether these tools can be sharpened by reforming Brazil’s competition law or whether new, comprehensive ex-ante regulation is needed.

By comparison, the EU experimented with EU competition law before passing the DMA. In fact, most if not all the prohibitions and obligations of the DMA stem from competition law cases.[9] The EU eventually decided that it preferred to pass blanket ex-ante rules against certain practices rather than having to litigate through competition law. Whether or not this was the right decision is up for debate, but one thing is certain: The EU tried its competition toolkit extensively against digital platforms before learning from the outcomes and deciding it needed to be complemented with a new set of broader, enforcer-friendly, bright-line rules.

By contrast, Brazil has initiated only a handful of antitrust cases against digital platforms. According to numbers published by CADE,[10] CADE has reviewed 233 merger cases related to digital platform markets between 1995 and 2023 and, regarding unilateral conduct (monopolization cases)—those most relevant for the discussion on Bill 2768—opened 23 conduct cases. Regarding those 23 cases, 9 are still being investigated, 11 were dismissed, and only 3 were settled by the signature of a Cease-and-Desist Agreement (TCC). In this sense, only 3 cases (TCCs) out of 23 could be said to have been, to some extent, “condemned”. It is questionable whether these cases provide the sort of evidence of the existence of intrinsic competition problems in the eight service markets identified in Art. 6, paragraph II of Bill 2768 that would justify new, “sector-specific” access rules.[11]

In fact, the recent entry of companies into many of those markets suggests that the opposite is closer to the truth. There are numerous examples of entry in a variety of digital services, including the likes of TikTok, Shein, Shopee, and Daki, to name just a few.

Serious problems can arise when products that are not essential facilities are treated as such, of which we name two.

First, over-extending the essential facilities doctrine can encourage free riding.[12] This is not what the essential facilities doctrine, properly understood, aims to achieve, nor what it should be used for:

Consequently, the [European Court of Justice] implies that the [essential facilities doctrine] is not designed for the convenience of undertakings to free ride dominant undertakings, but only for the necessity of survival on the secondary market in situations where there are no effective substitutes.[13]

Why develop a competing online retail platform when access to Mercado Livre or Amazon is guaranteed by law? Free riding can discourage investments from third companies and targeted “gatekeepers,” especially in the development and improvement of competing business platforms (or alternative business models that are not exact replicas of existing platforms). Contrary to the stated goals of Bill 2768, this could further entrench incumbents, as the ability to free ride on others’ investments incentivizes companies to pivot away from contesting incumbents’ core markets to acting as complementors in those markets.

Indeed, a serious—and underappreciated—concern is the cost of excessive risk-taking by companies that can rely on regulatory protections to ensure continued viability even when it is not warranted.

Businesses must develop their business models and operate their businesses in recognition of the risk involved. A complementor that makes itself dependent upon a platform for distribution of its content does take a risk. Although it may benefit from greater access to users, it places itself at the mercy of the other — or at least faces great difficulty (and great cost) adapting to unanticipated platform changes over which it has no control. This is a species of the “asset specificity” problem that animates much of the Transaction Cost Economics literature.[14]

But the risk may be a calculated one. Firms occupy specialized positions in supply chains throughout the economy, and they make risky, asset-specific investments all the time. In most circumstances, firms use contracts to allocate both risk and responsibility in a way that makes the relationship viable. When it is too difficult to manage risk by contract, firms may vertically integrate (thus aligning their incentives) or simply go their separate ways.

The fact that a platform creates an opportunity for complementors to rely upon it does not mean that a firm’s decision to do so — and to do so without a viable contingency plan — makes good business sense. In the case of the comparison-shopping sites at issue in the EU’s Google Shopping decision,[15] for example, it was entirely predictable that Google’s algorithm would evolve. It was also entirely predictable that it would evolve in ways that could diminish or even eviscerate their traffic. As one online marketing expert put it, “counting on search engine traffic as your primary traffic source is a bit foolish, to say the least.”[16]

Providing guarantees (which is what a “gatekeeper” access rule accomplishes) in this situation creates a significant problem: Protecting complementors from the inherent risk in a business model in which they are entirely dependent upon another company with which they have no contractual relationship is at least as likely to encourage excessive risk taking and inefficient over-investment as it is to ensure that investment and innovation are not too low.[17]

Second, granting companies and competitors access to goods or services except in the very few and narrow cases[18] in which access to such goods and services is truly essential to sustain competition on the market sends platforms the wrong message. The message is that, after being encouraged to compete, successful companies will be punished for thriving. This is contrary to the spirit of competition law and the principle of free competition, which Bill 2768 should be careful not to eviscerate. As the great U.S. jurist Learned Hand observed in U.S. v. Aluminum Co. of America: “The successful competitor, having been urged to compete, must not be turned upon when he wins.”[19]

Furthermore, forcing companies to do business with third parties is at odds with the principle that, unless a violation of antitrust law can be ascertained, companies should be free to do business with whomever they choose.[20] Indeed, it is a cornerstone of the free market economy that “the antitrust laws [do] not impose a duty on [firms] . . . to assist [competitors] . . . to ‘survive or expand.’”[21]

Question 3

Describe cases in digital markets where there is at least one other company with substitute assets close to these assets of the main company, but none of the digital platforms that hold the asset provide access to it. In other words, even if there is more than one asset in the market, there is still a problem of accessing the asset. How could Bill 2768/2022, especially its article 10, be improved to improve access to essential supplies?

We are aware of no such cases.

Question 4

Describe cases in which the ownership of data in digital markets creates a barrier to entry that makes it very difficult or even impossible for incumbent digital platforms to enter the market. How could Bill 2768/2022 mitigate this problem, reducing the barrier to entry represented by access to data?

The extent to which data represents a barrier to entry is, in our opinion, vastly overstated. Bill 2768 should not assume that data is a barrier to entry and should assess claims to the contrary critically — especially if it intends to build a new, comprehensive regulatory regime on that assumption.[22]

In a nutshell, theories of “data as a barrier to entry” make the assertion that online data can amount to a barrier to entry, insulating incumbent services from competition and ensuring that only the largest providers thrive. This data barrier to entry, it is alleged, can then allow firms with monopoly power to harm consumers, either directly through “bad acts” like price discrimination, or indirectly by raising the costs of advertising, which then get passed on to consumers.[23]

However, the notion of data as an antitrust-relevant barrier to entry is more supposition than reality.

First, despite the rush to embrace “digital platform exceptionalism,” data is useful to all industries. “Data” is not some new phenomenon particular to online companies. It bears repeating that offline retailers also receive substantial benefit from, and greatly benefit consumers by, knowing more about what consumers want and when they want it. Through devices like coupons, membership discounts and loyalty cards (to say nothing of targeted mailing lists and the age-old practice of data mining check-out receipts), brick-and-mortar retailers can track purchase data and better serve consumers. Not only do consumers receive better deals for using them, but retailers know what products to stock and advertise and when and on what products to run sales.[24]

Of course, there are a host of other uses for data, as well, including security, fraud prevention, product optimization, risk reduction to the insured, knowing what content is most interesting to readers, etc. The importance of data stretches far beyond the online world, and far beyond mere retail uses more generally. To describe any one company as having a monopoly on data is therefore mistaken.

Second, it is not the amount of data that leads to success, but how that data is used to craft attractive products or services for users. In other words: information is important to companies because of the value that can be drawn from it, not for the inherent value of the data itself. Thus, many companies that accumulated vast amounts of data were subsequently unable to turn that data into a competitive advantage to succeed on the market. For instance, Orkut, AOL, Friendster, Myspace, Yahoo! and Flicker — to name a few — all gained immense popularity and access to significant amounts of data, but failed to retain their users because their products were ultimately lackluster.

Data is not only less important than what can be drawn from it, but data is also less important than the underlying product it informs. For instance, Snapchat created a challenger to Facebook so successfully (and in such a short time) that Facebook attempted to buy it for $3 billion (Google offered $4 billion). But Facebook’s interest in Snapchat was not about its data. Instead, Snapchat was valuable — and a competitive challenge to Facebook — because it cleverly incorporated the (apparently novel) insight that many people wanted to share information in a more private way.

Relatedly, Twitter, Instagram, LinkedIn, Yelp, TikTok (and Facebook itself) all started with little (or no) data but nevertheless found success. Meanwhile, despite its supposed data advantages, Google’s attempt at social networking, Google+, never caught up to Facebook in terms of popularity to users (and thus not to advertisers either) and shut down in 2019.

At the same, it is not the case that the alleged data giants — the ones supposedly insulating themselves behind data barriers to entry — actually have the type of data most relevant to startups anyway. As Andres Lerner has argued, if you wanted to start a travel business, the data from Kayak or Priceline (or local would be far more relevant.[25] Or if you wanted to start a ride-sharing business, data from cab companies would be more useful than the broad, market-cross-cutting profiles Google and Facebook have. Consider companies like Uber and 99 that had no customer data when they began to challenge established cab companies that did possess such data. If data were really so significant, they could never have competed successfully. But Uber and 99 have been able to effectively compete because they built products that users wanted to use — they came up with an idea for a better mousetrap. The data they have accrued came after they innovated, entered the market, and mounted their successful challenges — not before.

Complaints about data facilitating unassailable competitive advantages thus have it exactly backwards. Companies need to innovate to attract consumer data, otherwise consumers will switch to competitors (including both new entrants and established incumbents). As a result, the desire to make use of more and better data drives competitive innovation, with manifestly impressive results: The continued explosion of new products, services and other apps is evidence that data is not a bottleneck to competition but a spur to drive it.

Third, competition online is (metaphorically—but not by much) one click or thumb swipe away. That is, barriers to entry and switching costs are low. Indeed, despite the alleged prevalence of data barriers to entry, competition online continues to soar, with newcomers constantly emerging and triumphing. The entry of online retailers and other digital platforms in Brazil is a case in point (See Questions 1 and 2). This suggests that the barriers to entry are not so high as to prevent robust competition.

Again, despite the supposed data-based monopolies of Facebook, Google, Amazon, Apple, and others, there exist powerful competitors in the markets they compete in:

  • If consumers want to make a purchase, they are more likely to do their research on Mercado Livre or Amazon than Google or Facebook, even with Facebook’s launch of Facebook Marketplace.
  • Google flight search has failed to seriously challenge — let alone displace — its competitors, as critics feared., Kayak, Expedia, and the like remain the most prominent travel search sites — despite Google having literally purchased ITA’s trove of flight data and data-processing acumen.
  • ChatGPT, one of the most highly valued startups today, is now a serious challenger to traditional search engines.
  • TikTok has rapidly risen to challenge popular social media apps like Instagram and Facebook.

Even assuming for the sake of argument that data creates a barrier to entry, there is little evidence that consumers cannot easily switch to a competitor. While there are sometimes network effects online, like with social networking, history still shows that people will switch. Myspace was considered a dominant network until it made a series of bad business decisions, and users ended up on Facebook instead; Orkut had a similar fate. Similarly, Internet users can and do use Bing, DuckDuckGo, Yahoo!, and a plethora of more specialized search engines on top of and instead of Google, and increasingly also turn to other ways to find information online (such as searching for a brand or restaurant directly on Instagram or TikTok, or asking ChatGPT a question). In fact, Google itself was once an upstart new entrant that replaced once-household names like Yahoo! and AltaVista.

Fourth, access to data is not exclusive. Data is not like oil. If, for example, Petrobras drills and extracts oil from the ground, that oil is no longer available to other companies. Data is not finite in the same way. Google knowing someone’s birthday doesn’t limit the ability of Facebook to know the same person’s birthday, as well. While databases may be proprietary, the underlying data is not. And what matters more than the data itself is how well it is analyzed (see first point). Because data is not exclusive like oil, any attempt to force the sharing of data in an attempt to help competitors creates a free-riding problem. Why go through the work of collecting valuable data on customers to learn what they want so you can better serve them when regulation mandates that Apple effectively give you the data?

In conclusion, the problem with granting competitors access to data is that data is a consequence of competition, not a prerequisite for it. Thus, rather than enhancing their ability to compete, “gifting” competitors the fruits of others’ successful attempts at competition risks destroying both groups’ incentives to design attractive products to accrue such data in the first place. By reversing the competition-data causality, Bill 2768 ultimately risks inadvertently stifling the same competition that it purportedly seeks to bolster.

Question 5

Cite cases in which a company in the digital market in Brazil used third-party data because of its characteristic as an essential input provider, harming the third party competitively?

We are not aware of any such cases.

However, the framing of this question should be clear about what is meant by “harming a third party competitively.” The use of third-party data is a key driver of competition. Even if competitors are “harmed” as a result, they are harmed only insofar as they do not match the price or quality offered by the platform.

Competition is, to a large extent, driven by the use of knowledge of rivals’ products — including their price, quality, quantity, and how they are sold and presented to consumers. In fact, the model of perfect competition largely assumes that all the products on the market are homogeneous (even if this is rarely borne out in practice). The use of third-party data to match and beat competitor’s offerings can be seen as a modern expression of this dynamic. Indeed, as we have written before:

We cannot assume that something is bad for competition just because it is bad for certain competitors. A lot of unambiguously procompetitive behavior, like cutting prices, also tends to make life difficult for competitors. The same is true when a digital platform provides a service that is better than alternatives provided by the site’s third-party sellers. […].

There’s no doubt this is unpleasant for merchants that have to compete with these offerings. But it is also no different from having to compete with more efficient rivals who have lower costs or better insight into consumer demand. Copying products and seeking ways to offer them with better features or at a lower price, which critics of self-preferencing highlight as a particular concern, has always been a fundamental part of market competition—indeed, it is the primary way competition occurs in most markets.[26]

Any per se prohibition of the use of third-party data would preclude digital platforms from using data to improve their product offering in ways that could benefit consumers.

Recommendation: Assuming that competition law and IP law are not up to the task of curbing abuses of third-party data, Bill 2768 should ensure that such prohibitions are tailor-made to cover conduct that has no other rational explanation other than seeking to exclude a competitor. It should not capture uses of third-party data that drives competition and benefit consumers, even if this results in the exit of a competitor from the market.

Question 6

Describe cases in which a difficulty in interoperability with a company’s systems makes it very difficult or impossible to enter one or more digital markets. How could Bill 2768/2022 mitigate this problem, reducing the barrier to entry represented by lack of interoperability?

We are not aware of any such cases.

However, when considering potential interoperability mandates, the government should be aware of the risks and trade-offs that come with such measures, especially in terms of safety, security, and privacy (see Question 8 for a more detailed discussion).

Question 7

The European Digital Market Act (DMA) chose to implement absolute prohibitions (per se) on some conduct in digital markets, such as self-preferencing, among others. Bill 2768/2022, on the other hand, chose not to do any prohibited conduct ex ante. Should there be one or more conducts with absolute prohibitions (per se) in Bill 2768/2022? Why? Please propose wording, explaining where in the bill it would be located?

No, there should not be absolute prohibitions on these sorts of conduct, especially without substantive experience suggesting that such conduct is always or almost always harmful and largely irredeemable (in this item, we answer the question in general terms; please see Question 8 for a discussion of why particular conduct (e.g., self-preferencing) should not be prohibited).

Regardless of the harm to the business of the targeted companies, overly broad prohibitions (or mandates) can harm consumers by chilling procompetitive conduct and discouraging innovation and investment, especially when no showing of harm is required and the law is not amenable to efficiencies arguments (like in the case of the DMA). The fact that such prohibitions apply to vastly different markets (for example, cloud services have little to do with search engines) regardless of context is also a sure sign that they are overly broad and poorly designed.

In fact, there are indications that where the DMA has been introduced, it has delayed the advance of technology. For example, Google’s “Bard” AI was rolled out later in Europe due to the EU’s uncertain and strict AI And privacy regulations.[27] Similarly, Meta’s “Threads” is not available in the EU precisely due to the constraints imposed by the DMA and the EU’s data privacy regulation (GDPR).[28] Elon Musk, X’s (formerly Twitter) CEO, has indicated that the cost of complying with EU digital regulations, such as the DSA, could prompt it to exit the European market.[29] Recently, Microsoft delayed the European rollout of its new AI, “Copilot,” because of the DMA.[30]

Apart from capturing pro-competitive conduct that benefits consumers and freezing technology in time (which would ultimately exacerbate the technological chasm between more and less advanced countries), rigid per se rules could also capture many budding companies that cannot be considered “gatekeepers” by any stretch of the imagination. This risk is especially real in the case of Brazil given the extremely low threshold for what constitutes a “gatekeeper” enshrined in Article 9 (R$70 million, or approximately USD$14 million). Thus, many Brazilian unicorns could, either immediately or in the near future, be captured by the new, restrictive rules, which could stunt their growth and chill innovative products. Ultimately, this could imperil Brazil’s current status as “[Latin America’s] most established startup hub” and cast a shadow on what The Economist has referred to as the bright future of Latin American startups.[31]

The list of harmed companies could include some of Brazil’s most promising unicorns, such as:

  • 99 (transport app)
  • Neon Bank (digital bank)
  • C6 Bank (digital bank)
  • CloudWalk (payment method)
  • Creditas (lending platform)
  • Ebanx (payment solutions)
  • Facily (social commerce)
  • com (road freight)
  • Gympass (gym aggregator and corporate benefits)
  • Hotmart (platform for selling digital products)
  • iFood (delivery)
  • Loft (real estate platform)
  • Loggi (logistics)
  • Mercado Bitcoin (cryptocurrency broker)
  • Merama (e-commerce)
  • Madeira Madeira (home and decoration products store)
  • Nubank (bank)
  • Olist (e-commerce)
  • Wildlife Studios (game developer)
  • Quinto Andar (rental platform)
  • Vtex (technology and digital commerce)
  • Unico (biometrics)
  • Dock (infrastructure)
  • Pismo (technology for payments and banking services)[32]

Question 8

Would there be behaviors in digital markets that would have a high potential to entail competitive problems, but which can be justified as generating greater efficiency for companies, transactions, and markets? Give examples of these behaviors? How should these behaviors be treated in Bill 2768/2022? In particular, a “reversal of the burden of proof” would be appropriate, in which such conduct would presumably be anti-competitive, but would it be appropriate to authorize a defense of digital platforms based on these efficiencies? Should these behaviors be considered not prohibited per se, but as a “reversal of the burden of proof” in Bill 2768/2022?

There are certain types of behavior in digital markets that have been targeted by ex-ante regulations but which are nevertheless capable of, or even central to, delivering significant procompetitive benefits. It would be unjustified and harmful to subject such conduct to per se prohibitions or to reverse the burden of proof. Instead, this type of conduct should be approached neutrally, and examined on a case-by-case basis.[33]

A.       Self-Preferencing

Self-preferencing occurs when a company gives preferential treatment to one of its own products (presumably, this type of behavior could be caught by Art. 10, paragraph II of Bill 2768). An example would be Google displaying its shopping service at the top of search results ahead of alternative shopping services. Critics of this practice argue that it puts dominant firms in competition with other firms that depend on their services, and this allows companies to leverage their power in one market to gain a foothold in an adjacent market, thus expanding and consolidating their dominance. However, this behavior can also be procompetitive and beneficial to users.

Over the past several years, a growing number of critics have argued that big tech platforms harm competition by favoring their own content over that of their complementors. Over time, this argument against self-preferencing has become one of the most prominent among those seeking to impose novel regulatory restrictions on these platforms.

According to this line of argument, complementors would be “at the mercy” of tech platforms. By discriminating in favor of their own content and against independent “edge providers,” tech platforms cause “the rewards for edge innovation [to be] dampened by runaway appropriation,” leading to “dismal” prospects “for independents in the internet economy—and edge innovation generally.”[34]

The problem, however, is that the claims of presumptive harm from self-preferencing (also known as “vertical discrimination”) are based neither on sound economics nor evidence.

The notion that platform entry into competition with edge providers is harmful to innovation is entirely speculative. Moreover, it is flatly contrary to a range of studies showing that the opposite is likely true. In reality, platform competition is more complicated than simple theories of vertical discrimination would have it,[35] and the literature establishes that there is certainly no basis for a presumption of harm.[36]

The notion that platforms should be forced to allow complementors to compete on their own terms, free of constraints or competition from platforms is a species of the idea that platforms are most socially valuable when they are most “open.” But mandating openness is not without costs, most importantly in terms of the effective operation of the platform and its own incentives for innovation.

“Open” and “closed” platforms are different ways of supplying similar services, and there is scope for competition between these alternative approaches. By prohibiting self-preferencing, a regulator might therefore close down competition to the detriment of consumers. As we have noted elsewhere:

For Apple (and its users), the touchstone of a good platform is not ‘openness,’ but carefully curated selection and security, understood broadly as encompassing the removal of objectionable content, protection of privacy, and protection from ‘social engineering’ and the like. By contrast, Android’s bet is on the open platform model, which sacrifices some degree of security for the greater variety and customization associated with more open distribution. These are legitimate differences in product design and business philosophy.[37]

Moreover, it is important to note that the appropriation of edge innovation and its incorporation into the platform (a commonly decried form of platform self-preferencing) greatly enhances the innovation’s value by sharing it more broadly, ensuring its coherence with the platform, incentivizing optimal marketing and promotion, and the like. Smartphones are now a collection of many features that used to be offered separately, such as phones, calculators, cameras and gaming consoles, and it is clear that the incorporation of these features in a single device has brought immense benefits to consumers and society as a whole. In other words, even if there is a cost in terms of reduced edge innovation, the immediate consumer welfare gains from platform appropriation may well outweigh those (speculative) losses.

Crucially, platforms have an incentive to optimize openness (and to assure complementors of sufficient returns on their platform-specific investments). This does not mean that maximum openness is optimal, however; in fact, typically a well-managed platform will exert top-down control where doing so is most important, and openness where control is least meaningful.[38]

But this means that it is impossible to know whether any particular platform constraint (including self-prioritization) on edge provider conduct is deleterious, and similarly whether any move from more to less openness (or the reverse) is harmful.

This is the situation that leads to the indeterminate and complex structure of platform enterprises. Consider the big online platforms like Google and Facebook, for example. These entities elicit participation from users and complementors by making access to their platforms freely available for a wide range of uses, exerting control over access only in limited ways to ensure high quality and performance. At the same time, however, these platform operators also offer proprietary services in competition with complementors or offer portions of the platform for sale or use only under more restrictive terms that facilitate a financial return to the platform.

The key is understanding that, while constraints on complementors’ access and use may look restrictive compared to an imaginary world without any restrictions, in such a world the platform would not be built in the first place. Moreover, compared to the other extreme — full appropriation (under which circumstances the platform also would not be built…) — such constraints are relatively minor and represent far less than full appropriation of value or restriction on access. As Jonathan Barnett aptly sums it up:

The [platform] therefore faces a basic trade-off. On the one hand, it must forfeit control over a portion of the platform in order to elicit user adoption. On the other hand, it must exert control over some other portion of the platform, or some set of complementary goods or services, in order to accrue revenues to cover development and maintenance costs (and, in the case of a for-profit entity, in order to capture any remaining profits).[39]

For instance, companies may choose to favor their own products or services because they are better able to guarantee their quality or quick delivery.[40] Mercado Livre, for instance, may be better placed to ensure that products provided by the ‘Mercado Envios logistics service are delivered in a timely manner compared to other services. Consumers may benefit from self-preferencing in other ways, too. If, for instance, Google were prevented from prioritizing Google Maps or YouTube videos in its search queries, it could be harder for users to find optimal and relevant results. If Amazon is prohibited from preferencing its own line of products on the marketplace, it may instead opt not to sell competitors’ products at all.

The power to prohibit the requiring or incentivizing of customers of one product to use another would enable the limiting or prevention of self-preferencing and other similar behavior. Granted, traditional competition law has sought to restrict the ‘bundling’ of products by requiring them to be purchased together, but to prohibit incentivization as well goes much further.

B.        Interoperability

Another mot du jour is interoperability, which might fall under Art. 10, paragraph IV of Bill 2768. In the context of digital ex ante regulation, ‘interoperability’ means that covered companies could be forced to ensure that their products integrate with those of other firms. For example, requiring a social network to be open to integration with other services and apps, a mobile operating system to be open to third-party app stores, or a messaging service to be compatible with other messaging services. Without regulation, firms may or may not choose to make their software interoperable. However, Europe’s DMA and the UK’s prospective Digital Markets, Competition and Consumer Bill (“DMCC”),[41] will allow authorities to require it. Another example is data ‘portability,’ which allows customers to move their data from one supplier to another, in the same way that a telephone number can be kept when one changes network.

The usual argument is that the power to require interoperability might be necessary to ‘overcome network effects and barriers to entry/expansion.’ However, the Brazilian government should not overlook that this solution comes with costs to consumer choice, in particular by raising difficulties with security and privacy, as well as having questionable benefits for competition. In fact, it is not as though competition disappears when customers cannot switch as easily as they turn on a light. Companies compete upfront to attract such consumers through tactics like penetration pricing, introductory offers, and price wars.[42]

A closed system, that is, one with comparatively limited interoperability, can help limit security and privacy risks. This can encourage use of the platform and enhance the user experience. For example, by remaining relatively closed and curated, Apple’s App Store gives users the assurance that apps will meet a certain standard of security and trustworthiness. Thus, ‘open’ and ‘closed’ ecosystems are not synonymous with ‘good’ and ‘bad,’ and instead represent two different product design philosophies, either of which might be preferred by consumers. By forcing companies to operate ‘open’ platforms, interoperability obligations could thus undermine this kind of inter-brand competition and override consumer choices.

Apart from potentially damaging user experience, it is also doubtful whether some of the interoperability mandates, such as those between social media or messaging services, can achieve their stated objective of lowering barriers to entry and promoting greater competition. Consumers are not necessarily more likely to switch platforms simply because they are interoperable. In fact, there is an argument to be made that making messaging apps interoperable in fact reduces the incentive to download competing apps, as users can already interact with competitors’ apps from the incumbent messaging app.

C.       Choice Screens

Some ex-ante rules seek to address firms’ ability to influence user choice of apps through pre-installation, defaults, and the design of app stores (this could fall under Art. 10, paragraph II of Bill 2768). This has sometimes resulted in the imposition of requirements to provide users with ‘choice screens,’ for instance requiring users to choose which search engine or mapping service is installed on their phone. In this sense, it is important to understand the trade-offs at play here: choice screens may facilitate competition, but they may do so at the expense of the user experience, in terms of the time taken to make such choices. There is a risk, without evidence of consumer demand for ‘choice screens,’ that such rules impose the legislator’s preference for greater optionality over what is most convenient for users. Unless there is explicit public demand in Brazil for such measures, it would be ill-advised to implement a choice screen obligation.

D.       Size and Market Power

In general, many of the prohibitions and obligations contemplated in ex-ante rules target incumbents’ size, scalability, and “strategic significance.”

It is widely claimed that because of network effects, digital markets are prone to ‘tipping’ whereby when one producer gains a sufficient share of the market, it quickly becomes a complete or near-complete monopolist. Although they may begin as very competitive, these markets therefore exhibit a marked ‘winner takes all’ characteristic. Ex ante rules often try to avert or revert this outcome by targeting a company’s size, or by targeting companies with market power.

However, there are many investments and innovations that will – if permitted – benefit consumers, either immediately or in the longer term, but which may have some effect on enhancing market power, a companies’ size, or its strategic significance. Indeed, improving a firm’s products and thereby increasing its sales will often lead to increased market power.

Accordingly, targeting “size” or conduct which bolsters market power, without any accompanying evidence of harm, creates a serious danger of a very broad inhibition of research, innovation, and investment – all to the detriment of consumers. Insofar as such rules prevent the growth and development of incumbent firms, they may also harm competition, since it may well be these firms that – if permitted – are most likely to challenge the market power of other firms in other, adjacent markets. The cases of Disney, Apple, Amazon and Globo’s launch of video-on-demand services to compete with Netflix, and Meta’s introduction of ‘Threads’ as a challenge to Twitter (or ‘X’), appear to be an example. Here, per se rules that have the aim of prohibiting the bolstering of size or market power in one area may in fact prevent entry by one firm into a market dominated by another. In that case, policymaker action protects monopoly power. Therefore, a much subtler approach to regulation is required.

Bill 2768’s reference to Tim Wu’s The Curse of Bigness, which notoriously adopts a reductive “big is bad” ethos, suggests that it could be making a similarly flawed assumption.[43]

E.        Conclusion

We do not think it is appropriate to reverse the burden of proof in any instances in the context of digital platforms. Without substantive evidence that such conduct causes widespread harm to a well-defined public interest (e.g., similar to cartels in the context of antitrust law), there is no justification for a reversal of the burden of proof, and any such reversal of the burden of proof risks undermining consumer benefits, innovation, and discouraging investment in the Brazilian economy for a justified fear that procompetitive conduct will result in fines and remedies. By the same token, we do think that where the appointed enforcer makes a prima facie case of harm, whether in the context of antitrust law or ex-ante digital regulation, it should also be prepared to address arguments related to efficiencies.

Question 9

Is there a need for a regulator? If so, which regulator would be better able to implement the regulation provided for in Bill 2768/2022? Anatel, CADE, ANPD, another existing or new regulator? Justify.

Despite the lack of clarity concerning the law’s goals and objectives, the rules proposed by Bill 2768 appear to be competition based, at least insofar as they seek to bolster free competition, consumer protection, and tackle “abuse of economic power” (Art. 4). Therefore, the agency best positioned to enforce it would, in principle, be CADE (the goals of Act 12.529/11, the Brazilian Competition Law, overlap significantly with those under Bill 2768). Conversely, there is a palpable risk that, in discharging its duties under Bill 2768, Anatel would transpose the logic and principles of telecommunications regulation to “digital” markets, which is misguided as these are two very different things.

Not only are “digital” markets substantively different from telecommunications markets, but there is really no such thing as a clearly demarcated concept of “digital market.” For example, the digital platforms described in Art. 6, paragraph II of Bill 2768 are not homogenous, and cover a range of different business models. In addition, virtually every market today incorporates “digital” elements, such as data. Indeed, companies operating in sectors as divergent as retail, insurance, healthcare, pharma, production, and distribution have all been “digitalized.” Thus, an enforcer with a nuanced understanding of the dynamics of digitalization and, especially, the idiosyncrasies of digital platforms as two-sided markets, appears necessary. While CADE arguably lacks substantive experience with digital platforms, it is better placed to enforce Bill 2768 than Anatel because of its deep experience with the enforcement of competition policy.

Question 10

Do you think that there could be any risk of bis in idem between the regulator and the competition authority with the same conduct being analyzed by both?

Based on the EU experience, there is a risk of double jeopardy at the intersection of traditional competition law and ex-ante digital regulation.

By way of comparison, and as Giuseppe Colangelo has written, the DMA is grounded explicitly on the notion that competition law alone is insufficient to effectively address the challenges and systemic problems posed by the digital platform economy.[44] Indeed, the scope of antitrust is limited to certain instances of market power (e.g., dominance on specific markets) and of anti-competitive behavior. Further, its enforcement occurs ex post and requires extensive investigation on a case-by-case basis of what are often very complex sets of facts and may not effectively address the challenges to well-functioning markets posed by the conduct of gatekeepers, who are not necessarily dominant in competition-law terms — or so its proponents argue. As a result, regimes like the DMA invoke regulatory intervention to complement traditional antitrust rules by introducing a set of ex ante obligations for online platforms designated as gatekeepers. This also allows enforcers to dispense with the laborious process of defining relevant markets, proving dominance, and measuring market effects.

However, despite claims that the DMA is not an instrument of competition law, and thus would not affect how antitrust rules apply in digital markets, the regime does appear to blur the line between regulation and antitrust by mixing their respective features and goals. Indeed, the DMA shares the same aims and protects the same legal interests as competition law.

Further, its list of prohibitions is effectively a synopsis of past and ongoing antitrust cases, such as Google Shopping (Case T-612/17), Apple (AT.40437) and Amazon (Cases AT.40462 and AT.40703).[45] Acknowledging the continuum between competition law and the DMA, the European Competition Network (ECN) and some EU member states (self-anointed “friends of an effective DMA”) initially proposed empowering national competition authorities (NCAs) to enforce DMA obligations.[46]

Similarly, the prohibitions and obligations contemplated in Art. 10 of Bill 2768 could, in theory, all be imposed by CADE. In fact, CADE has investigated, and is still investigating, several large companies which would (likely) fall within the purview of Bill 2768, such as Google, Apple, Meta, (still under investigation),, Expedia and iFood (settled through case-and-desist agreements), and Uber (all investigations closed without penalties; following an economic study, CADE found that Uber’s entry benefitted consumers[47]). CADE’s past and current investigations against these companies already covered conducts that are targeted by the DMA and Bill 2768, such as refusal to deal, self-preferencing, and discrimination.[48] Existing competition law under Act 12.529/11, the Brazilian Competition Law, thus clearly already captures the sort of conduct which is included under Bill 2768. In addition, the requirement to use data “adequately” is likely covered by data protection regulation in Brazil (Lei Geral de Proteção de Dados, LGPD, Lei Federal Nº 13.709/2018).

The difference between the two regimes is that, while general antitrust law requires a showing of harm (even if potential) and exempts conduct with net benefits to consumers, Bill 2768 in principle does not. The only limiting principle to the prohibitions and obligations contained in Art. 10 Art. 11 (III) is the principle of proportionality — which is a general principle of constitutional law and should, in any case, apply regardless of Bill 2768. Thus, the only limiting principle of Art. 10, framed broadly, is redundant.

There is one additional complication. Bill 2768 pursues many (though not all) of the same objectives as Act 12.529/11. Insofar as these objectives are shared, it could lead to double jeopardy i.e., the same conduct being punished twice under slightly different regimes. But it could also produce contradictory results because, as pointed out above, the objectives pursued by the two bills are not identical. Act 12.529/11 is guided by the goals of “free competition, freedom of initiative, social role of property, consumer protection and prevention of the abuse of economic power” (Art. 1). To these objectives, Bill 2768 adds “reduction of regional and social inequalities,” and “increase of social participation in matters of public interest.” While it is true that these principles derive from Art. 170 of the Brazilian Constitution (“economic order”), the mismatch between the goals of Act 12.529/11 and Bill 2768 and their enforcing authorities is sufficient as to lead to situations in which conduct that is allowed or even encouraged under Act 12.529/11 is prohibited under Bill 2768. For instance, procompetitive conduct by a covered platform could nevertheless exacerbate “regional or social inequalities” because it invests heavily in one region, but not others. In a similar vein, safety, privacy, and security measures implemented by, say, an operator of an App Store, which would typically be considered beneficial for consumers under antitrust law,[49] could feasibly lead to less participation in discussions of public interest (assuming one could easily define the meaning of such a term).

Accordingly, Bill 2768 could fragment Brazil´s legal framework due to overlaps with competition law, stifle procompetitive conduct, and lead to contradictory results. This, in turn, is likely to impact legal certainty and the rule of law in Brazil, which could adversely affect Foreign Direct Investment.[50] Furthermore, coordination between CADE and Anatel is likely to be costly, if the latter ends up being the designated enforcer of Bill 2768. Brazil would essentially have two Acts pursuing the same or similar goals being implemented by two different agencies, with all the extra compliance and coordination costs that come with such duplicity.

Question 11

What is your assessment of the criteria of art. 9 of Bill 2768/2022? Should it be changed? By what criteria? Is it necessary to designate the essential service-to-service access control power holder?

This criterion seems arbitrary and, in any case, extremely low. There is no objective reason that would link “power to control access” with turnover. Furthermore, even if one admits, for the sake of argument, that turnover is a relevant indication of gatekeeper power, a R$70 million threshold would capture dozens, if not hundreds of companies active in a range of industries. This can lead to a situation in which a law that was initially — and purportedly — aimed at very specific “digital” firms, like Google, Amazon, Apple, Microsoft, etc., ends up, by and large, covering a host of other, comparatively small firms, including some of Brazil’s most valuable unicorns (see Question 7). On the other hand, it is also questionable from a rule of law perspective whether a law should seek to identify the specific companies it will apply to in advance.

Lessons can be drawn from the UK’s DMCC, which has made a similar mistake. Pursuant to the current proposal for a DMCC, the UK’s CMA will be able to designate a company as having “significant market status” (“SMS”) where it takes part in a ‘digital activity linked to the United Kingdom’, and, in relation to this digital activity, has ‘substantial and entrenched market power’ and is in ‘a position of strategic significance’ (s. 2), and has a turnover of at least £1 billion in the UK or £25 billion globally (s. 7).[51] The British government has previously stated that the ‘regime will be targeted at a small number of firms’.

However, except for the monetary threshold, the SMS criteria are all broadly defined, and could in theory capture as many as 530 companies (as of March 2022, there were 530 companies with more than £1 billion in revenue in the United Kingdom, according to the Office for National Statistics).[52] Thus, although the government claims that the new regime is aimed at a handful of companies, in practice the CMA will have the power to interfere in a variety of new ways across wide swaths of the economy.

Article 9 of Bill 2768 runs into a similar problem. Granted, it identifies the types of services to which the Bill would apply in a way that the DMCC does not. However, some of the categories envisaged are still very broad: for example, online intermediation services could cover any website that connects buyers and sellers or facilitates transactions between two parties. “Operating systems” are prevalent electronic devices well beyond Apple’s iOS and Google’s Android. Indeed, an operating system is just a program or set of programs of a computer system, which manages the physical resources (hardware), the execution protocols of the rest of the content (software), as well as the user interface. They can be found in many everyday devices, either through graphical user interfaces, desktop environments, window managers or command lines, depending on the nature of the device.

Companies delivering these services, no matter their competitive position, market share, the industry they are a part of, or any other economic or factual considerations, would all be caught by Bill 2768, as long as they fulfilled the (low) R$70 million threshold. The upshot is that the enforcer will be able to apply Bill 2768 against a host of wildly different companies, some of which might not really be in a position to harm competition or misuse their market power. As a consequence, the Bill risks discouraging growth, innovation and, indeed, success, as companies become wary of growing past a certain threshold for fear of being caught in the regulator’s crosshairs. Coupled with a reversal of the burden of proof and the possibility of ignoring efficiencies arguments, the Bill would give the enforcer massive, unchecked powers, which could raise rule of law issues.

This problem can be remedied, at least to some extent, by adding a series of qualitative criteria that may or may not work cumulatively with the quantitative thresholds laid down in the Bill. These criteria should require a showing that the companies in question control access to essential facilities, that such facilities cannot be reasonably replicated, and that access is being denied with the threat that competition on the market may be eliminated (refer to Question 1 for discussion on integrating the essential facilities doctrine into Bill 2768). In addition, Bill 2768 should leverage existing measurements of market power from competition law, such as the ability to control output and increase prices. Quantitative criteria, if used, should be significantly higher and also refer to the number of active users on each platform service covered. “Active user” should in this sense be defined as a user who uses a specific service at least once daily and, at a minimum, once weekly.

Question 12

What did you think of the rules on the Digital Platforms Supervisory Fund in art. 15 of Bill 2768/2022? Is there another way to finance this type of government regulatory activity?

There are many ways of financing governmental regulatory activity that do not require the targeted companies to pay an annual tax. Government agencies are typically financed from the general government budget — and it should be the same for the agency enforcing Bill 2768.

There are at least two issues with the current approach under Art. 15. The first is capture. If an agency’s activity is funded by the regulated companies, this can lead to the capture of the agency by the regulated company and facilitate rent-seeking — i.e., the situation in which a company uses the regulator to gain an unfair advantage over rivals. Second, it also creates an incentive on the part of the agency, and the government, to widen the scope of the targeted companies, as a way to secure more funding and resources. This creates a perverse incentive that does not align with the public interest. It also discourages investment and, in a sense, is tantamount to a racket by the government.

Moreover, to the extent that the Bill operates as a direct and targeted constraint on certain companies’ exercise of their economic liberty and private property rights for the presumed benefit of the public welfare, it seems appropriate that it should be funded by general-revenue funds, apportioned according to current tax policy over the entire tax-paying population.

Question 13

To what extent do you believe that all the problems addressed in Bill 2768/2022 are already adequately addressed by competition law, more specifically by CADE, with the instruments of Law No. 12,529 of 2011?

Please see the response to Question 10.

The fact that the government is asking this question at this stage in the process suggests that perhaps the scope and the particulars of Bill 2768 have not been thoroughly thought out. Bill 2768 should be passed only if it is clear that Brazilian competition law is not up to the task. By comparison, and as indicated in the answer to Question 10 above, virtually all of the conduct in the EU’s DMA has also been addressed through EU competition law — often in the Commission’s favor. However, the EU wanted to codify a set of rules that would ensure that the Commission did not have to litigate cases before the courts and would win every case — or at least the vast majority of cases — against digital platforms. But this decision, which one may or may not agree with, came after at least some experience applying competition law to digital platforms and a determination that the gains of such an approach would outweigh the manifest costs.

Conversely, Brazil’s CADE enjoys much more limited experience in this sense, and Brazil itself presents very different economic realities and consumer interests that may not yield the same cost/benefit analysis. As mentioned above, the only “penalties” CADE has imposed against “digital platforms” resulted from voluntary settlements, meaning there has been limited need to litigate “digital” cases in Brazil. There is a lingering sense that Bill 2768 has been proposed not in response to deficiencies in the existing competition law framework, or in response to identified needs particular to Brazil, but as a response to “global trends” initiated by the EU.

Art. 13 of Bill 2768, for example, provides that mergers by covered companies will be scrutinized pursuant to the general competition law rules applicable to other companies and in other sectors. It is unclear why the same logic could not apply across the board — i.e., to all potentially anticompetitive conduct by targeted companies. Why does some conduct which can be addressed through antitrust law necessitate special regulation, but not others?

Question 14

What problems could be generated for the innovation activity of digital platforms if there is the regulation of digital platforms proposed by Bill 2768/2022? Could this be dealt with in any way within Bill 2768/2022?

Indeed, it is by no means clear that Brazil’s particular circumstances are amenable to an “ex ante” approach similar to that of the EU.

Broad prohibitions and obligations such as the ones imposed by Art. 10 of Bill 2768 risk chilling innovative conduct and freezing technology in place. As the tenth ranked country in the global information technology market and with hundreds of startups in the AI sector, Brazil is a burgeoning market with tremendous potential.[53] Its 214 million population means that growth trends are poised to continue — and, sure enough, the number of app jobs grew by 54% in 2023 compared to 2019.[54]

However, static, strict rules such as those envisioned by Bill 2768 can nip the growth of Brazilian startups in the bud by imposing unsurmountable regulatory costs (which would, in any case, benefit incumbents compared to smaller competitors) and banning conduct capable of fostering growth, benefiting consumers, and igniting competition, such as self-preferencing and refusal to deal.

Indeed, both practices can — and often are — socially beneficial. As discussed in Question 8, despite its recent malignment by some policymakers, “self-preferencing” is normal business conduct and a key reason for efficient vertical integration, which avoids double marginalization and allows companies to better coordinate production, distribution, and sale more efficiently — all to the ultimate benefits of consumers. For example, retail services such as Amazon self-preferencing their own delivery services, as in the case of “Fulfilled by Amazon,” gives consumers something they value tremendously: a guarantee of quick delivery. As we have written elsewhere:

Amazon’s granting marketplace privileges to [Fulfilled by Amazon] products may help users to select the products that Amazon can guarantee will best satisfy their needs. This is perfectly plausible, as customers have repeatedly shown that they often prefer less open, less neutral options.[55]

In a recent report, the Australian Competition Commission recognized as much, stating that self-preferencing is often benign and can lead to procompetitive benefits.[56] Indeed, there are many legitimate reasons why companies may choose to self-preference, including better customer experience, customer service, more relevant choice (curation), and lower prices.[57] Thus, banning self-preferencing, or otherwise significantly discouraging companies from engaging in self-preferencing, could hamstring company growth — including by Brazilian companies that are currently in an early stage of development — and impede market entry by companies who could have been innovators.

Similarly, forcing companies to deal with third parties could stifle innovation by incentivizing free-riding and discouraging companies from making investments. Indeed, why would a company innovate or invest if it knows it will then have to share such investments and innovations with passive rivals who have undertaken none of these risks? The consequence is a stalemate where, rather than fighting to be the first to innovate and enjoy the fruits borne of such innovation, companies are rather encouraged to game the system by waiting for others to make the first step and then free riding on their achievements. This essentially upends the process of dynamic competition by artificially rearranging the incentive to innovate and invest vs. the incentive to free ride, reducing the benefits of the former and increasing the benefits of the latter.

It would be catastrophic to drive a wedge in Brazil’s ability to grow its technology sector and innovate — especially considering the country’s vast potential. Indeed, rather than a triumph of regulation over innovation, Brazil should strive to be precisely the opposite.[58]

Question 15

What would be the practical difficulties of applying this type of legislation contemplated by Bill 2768/2022?

Funds to finance what could be a considerable amount of enforcement are necessary, but not sufficient, to ensure effectiveness. In the EU, the Commission’s DG Competition, one of the world’s foremost and best-endowed competition authorities, has famously struggled to hire the staff necessary to implement the Digital Markets Act. In short, “DMA experts” currently do not exist — and the Commission will either have to train such experts itself or hire them when expertise develops through enforcement. But this creates a chicken-and-egg scenario, where enforcement — or at least good enforcement — cannot happen without good experts, and good experts cannot materialize without enforcement. There is no reason to believe that these considerations do not map onto the Brazilian context.

Brazil faces an additional challenge, however: attracting talent. Unlike in the EU, where posts at the Commission are highly coveted due to the high salaries, perks, and job security they confer, CADE’s resources are more modest and likely cannot compete fully with the private sector. Thus, before passing Bill 2768, the government should be clear on how the law would be enforced, and by whom.

Other issues include the heavy compliance burden of the Bill, which will affect not only the so-called “tech giants” but any company above the modest R$70 million turnover threshold, the difficulties in interpreting the ambiguous prohibitions and obligations contemplated in Art. 10 (and the litigation which may ensue, on which see Question 16), the cost of crafting of adequate remedies within the meaning of Art. 10, and the looming possibility that the Bill will capture procompetitive conduct and stifle innovation. As we have written with respect to ASEAN countries and the possibility of implementing EU-style competition regulation there:

The ASEAN nations exhibit extremely diverse policies regarding the role of government in the economy. Put simply, some of the ASEAN nations seem ill-suited to the far-reaching technocracy that almost inevitably flows from adopting the European model of competition enforcement. Others might simply not have sufficient resources to staff agencies that could, satisfactorily, undertake the type of far-reaching investigations that the European Commission is famous for.[59]

Question 16

Do you see a lot of room for the judicialization of this type of regulation provided for in Bill 2768/2022? On what devices?

The enforcement of Bill 2768 is likely to lead to substantial litigation, not least because many of the core concepts of the Bill are ambiguous and open to interpretation.

For instance, what does “discriminatory” conduct within the meaning of Art. 10, para. II entail? Can a covered platform treat business users differently based on objective criteria, such as quality, history, and trustworthiness, or must all business users be treated equally? In this sense, it is uncertain whether the specific meaning ascribed to “discriminatory conduct” under competition law applies in this context. Similarly, what does “adequate” use of data collected in the exercise of a firm’s activities mean (paragraph III)? Does paragraph IV of Art. 10 imply that a covered platform can never deny access to business users? Presumably, covered platforms will want to know how and why this general obligation deviates from the narrower essential facilities doctrine under Brazilian competition law.

Art. 11 adds certain caveats to this, such as that intervention should be tailored, proportionate and consider the impact, costs, and benefits. Again, what sort of impact, costs and benefits are relevant — on consumers, business users, the covered platform, society as a whole?

If this is anything to go by, Bill 2768 is likely to be a legally contentious one.

Question 17

Are the definitions in article 6 of Bill 2768/2022 adequate for the purpose of this proposal?

Art. 6 and, indeed, the entire impetus behind Bill 2768, rests on two questionable assumptions:

  1. That covered products and services are different from other products or services; and
  2. That these products and services are sufficiently similar to be considered (and regulated) as a group.

The former would be more convincing if the remedies contemplated by the Bill, such as non-discrimination, adequate use of data, and access, had not been previously used in other markets and for other products. Granting access on “Fair, Reasonable, and Nondiscriminatory” (“FRAND”) terms is often used in the context of competition law and IP law, both of which apply across industries. The duty to use data “adequately” is generally contemplated by data protection laws, which also apply broadly. The same can be said for access obligations, which are frequent under competition law and in regulated industries (such as telecommunications or railways).

In addition, neither the products and services in Art. 6 of the Bill, the companies that operate them, nor the business models they employ are monolithic. Voice assistants and social media, for instance, are vastly different products. The same can be said about cloud computing, which is not really a “platform” in the sense that, say, online intermediation is. The products and services in Art. 6 themselves are also highly heterogeneous, with a single category encompassing a motley list of products, from e-commerce to online maps and app stores.

The same argument applies to the companies that sell these products and services, which — despite the ubiquitous “Big Tech” moniker — are ultimately very different firms.[60] As Apple CEO Tim Cook has said: “Tech is not monolithic. That would be like saying ‘All restaurants are the same’ or ‘All TV networks are the same.’”[61]

For instance, while Google (Alphabet) and Facebook (Meta) are information-technology firms that specialize in online advertising, Apple remains primarily an electronics company, with around 75% of its revenue coming from the sale of iMacs, iPhones, iPads, and accessories. As Amanda Lotz of the University of Michigan has observed:

The profits on those [hardware] sales let Apple use very different strategies than the non-hardware [“Big Tech”] companies with which it is often compared.[62]

It also means that most of its other businesses — such as iMessage, iTunes, Apple Pay, etc. — are complements that “Apple uses strategically to support its primary focus as a hardware company.” Amazon, on the other hand, is primarily a retailer, with its Amazon Web Services and advertising divisions accounting for just 15% and 7% of the company’s revenue, respectively.[63]

Even when two “gatekeepers” are active in the same products/service market, they often have markedly different business models and practices. Thus, despite both selling mobile-phone operating systems, Android (Google) and Apple employ very different product-design philosophies. As we argued in an amicus curiae brief submitted last month to the U.S. Supreme Court in Apple v. Epic Games:

For Apple and its users, the touchstone of a good platform is not “openness,” but carefully curated selection and security, understood broadly as encompassing the removal of objectionable content, protection of privacy, and protection from “social engineering,” and the like.… By contrast, Android’s bet is on the open platform model, which sacrifices some degree of security for the greater variety and customization associated with more open distribution. These are legitimate differences in product design and business philosophy.[64]

These various companies and markets have diverse incentives, strategies, and product designs, therefore belying the idea that there is any economically and technically coherent notion of what comprises “gatekeeping.” In other words, both the products and services that would be subject to Art. 6 of Bill 2768 and those companies themselves are highly heterogeneous, and it is unclear why they are placed under the same umbrella.

Question 18

Instead of pure ex-ante regulation, would any other type of monitoring and/or regulation of digital markets make sense?

A special unit within CADE, operating within the limits of current antitrust laws, should be seriously assessed before rushing to adopt far-reaching, ex-ante regulation in digital markets. Most of the conduct covered by ex-ante regulation in the EU, for example, is spun off from competition law cases. This suggests that such conduct falls within the limits of traditional competition law and can be properly addressed through EU competition law.

Accordingly, a digital unit within CADE would leverage the expertise of staff with a background in applying antitrust law to “digital markets.” Chances are that, if such a unit cannot be formed within CADE, which boasts staff with the expertise that most closely resembles what would be required to enforce Bill 2768, it likely cannot be formed anywhere else — at least not without siphoning off talent from CADE. This would be a mistake, as CADE has a critical role in suppressing behavior that unambiguously harms the public interest, such as cartels (arguably, this is where Brazil should be focusing its resources).[65] Creating a new unit to prosecute novel conduct with uncertain effects on social welfare at the expense of suppressing conduct that is manifestly harmful does not pass a cost-benefit analysis and would ultimately damage Brazil’s economy.

Question 19

Do you think that the set of solutions described in art. 10 of Bill 2768/2022 are adequate?

It is difficult to answer this question without a clear notion of what Bill 2768 aims to achieve. Adequate for what?

Question 20

Are the set of sanctions provided for in art. 16 of Bill 2768/2022 adequate?

This is also difficult to answer. If the objective is to thwart all proscribed conduct, no matter the consequences for innovation, investment, and consumer satisfaction, then a high fine is called for — and many companies will stop doing business as a result (which will very effectively stop all undesirable behavior – but also all desirable behavior). If raising revenue is the objective, then the amount of enforcement times the level of sanction needs to be low enough to operate not as a bar to behavior but a fee for doing business. We do not know if the level of sanctions in Art. 16 is appropriate for this — nor, we hasten to add, should this ever be the intention of such a law!

On the other hand, if optimal deterrence is the objective, imposing sanctions considerably lower than those in the EU (as a sanction of 2% of the infringing companies’ Brazilian turnover would be) appears reasonable. Fines for antitrust infringements in the EU can be up to 10% of the company’s worldwide turnover; and fines for violations of the DMA can even reach 20%.[66] But Brazil should not seek to deter investment and innovation to the extent the EU has.

It is, of course, difficult to identify a causal link between competition fines and investment/innovation. But what we do know is this: The pace of economic growth in Europe has lagged that of the U.S. by a significant margin:

Fifteen years ago, the size of the European economy was 10% larger than that of the U.S., however, by 2022 it was 23% smaller. The GDP of the European Union (including UK before Brexit) has grown in this period by 21% (measured in dollars), compared to 72% for the US and 290% for China.[67]

Meanwhile, none of the world’s 10 largest technology companies, and only two of the 25 largest, are based in Europe.[68] And the large U.S. and Asian multinationals are spread across the entire technology industry, from electronic components (chips, mobile phones and computers) to app development companies, websites, and e-commerce. There may be many reasons for these discrepancies, but one of them is almost certainly the differences in the economic regulatory environments, including the extent of competition-law overdeterrence.[69]

Question 21

Article 10 provides for several obligations in a non-exhaustive list on which the regulator could impose other measures. Should an exhaustive list of measures be envisaged?

Exhaustive lists have the advantage of fostering predictability and cabining the enforcer’s discretion, thus limiting rent-seeking, and ensuring that enforcement stays tethered to the public interest. Assuming, of course, that the sort of measures which are envisaged act in the public interest in the first place.

The problem with how Bill 2768 is framed in its current state is that it is too open-ended. It is understandable that Bill 2768 does not want to tie the enforcers’ hands and has opted for bespoke interventions rather than blanket prohibitions and obligations. This is to be welcomed. However, it should not come at the expense of legal certainty, and it must not fail to impose limits on the enforcer’s discretion. This currently does not seem to be the case.

Article 10 thus provides that platform operators will be subject to “amongst others, the following obligations…” It is not clear, from this numerus apertus list, what the enforcer can and cannot do. But the problem is deeper than just Article 10; nowhere in the Bill is it explained what the goals of the new rules are. The proposed redrafting of Article 19-A of Law 9.472 of 16 July 1997 states, in paragraphs III, IV, and V is vague – it does not impose sufficiently clear limiting principles on the Bill’s reach. Indeed, it suggests that the goals of Bill 2768 would be to prevent conflicts of interest, prevent infringements of user’s rights, and prevent economic infringements by digital platforms in areas which are competence of CADE. Article 4 of Bill 2768 includes other goals: freedom of initiative, free competition, consumer protection, a reduction in regional and social inequality, repressing economic power and bolstering social participation. Elsewhere, it is implied that the goal is to diminish “gatekeeper power” (under “Justifications”).

In other words, it is not clear what Bill 2768 doesn’t empower the enforcer to do.

Furthermore, the prohibitions and obligations in Paragraphs I-IV of Art. 10 are similarly opaque. For instance, what is “adequate” use of collected data? (III). Does paragraph IV imply that a targeted platform may never refuse access to their service? In fact, one thing that is missing from Bill 2768 is the ability to escape a prohibition or obligation by demonstrating efficiencies or through an objective justification (such as, e.g., safety and security or privacy).

Clearly, Bill 2768 cannot predict all of the instances in which Art. 10 will be used. But, in order to strike a balance between the enforcer’s nimbleness and the law’s administrability and predictability, it needs to give a more focused account of the Bill’s goals, and how the provisions in Art. 10 help to achieve them. In other words: Articles 3, 4, and 10 need to be much clearer. Otherwise, the Bill risks doing more harm than good to targeted companies, business users, competitors, and ultimately, consumers. The “Justifications” section of the Bill states that it does not wish to impose a “straitjacket” on targeted companies through the imposition of strict ex ante rules. This is reasonable, especially considering the lack of evidence of unambiguous harm. But granting an enforcer like Anatel, which lacks experience in “digital markets,” broadly defined powers to intervene on the basis of equally broad goals amounts to imposing a straitjacket by another name. In a regulatory “panopticon” in which companies are never sure of what is and is not allowed, some might reasonably choose not to take risks, innovate, and bring new products to the market —because they do not wish to risk being subject to fines (Art. 16) and potential structural remedies, like break-ups (Art. 10, paragrafo unico). In other words, they might assume that much more is prohibited than is actually prohibited.

[1] PL 2768/2022, Dispõe sobre a organização, o funcionamento e a operação das plataformas digitais que oferecem serviços ao público brasileiro e dá outras providências, available at

[2] REGULATION (EU) 2022/1925 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 September 2022, on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act).


[4] Case C-7/97 Bronner, EU:C:1998:569.

[5] See, e.g., Commissioner Ana Frazão’s majority decision in Procedure No. 08012.003918/2005-14 (Defendant: Telemar Norte Leste S.A.), paras. 60-62,

[6] See Commissioner Mauricio Maia’s reporting majority decision in Administrative Procedure No. 08012.010483/2011-94 (Defendants: Google Inc. and Google Brasil Internet Ltda.), paras. 180-94; 224-42,

[7] A 2021 report by IBRAC identified the high entry rate into the market of online sales platforms. See IBRAC, Revista do Revista do IBRAC Número 2-2021, available at

[8] Bronner, Para. 67.

[9] See Colangelo, G., The Digital Markets Act and EU Antitrust Enforcement: Double & Triple Jeopardy, ICLE White Paper (2022), available at

[10] CADE, Mercados de Plataformas Digitais, SEPN 515 Conjunto D, Lote 4, Ed. Carlos Taurisano CEP: 70.770-504 – Brasília/DF, available at

[11] On the notion that DMA-style rules are “sector-specific competition law,” see Nicolas Petit, The Proposed Digital Markets Act (DMA): A Legal and Policy Review, 12 J. Eur. Compet. Law & Pract. 529 (May 11, 2021).

[12] See Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2003). “Compelling such firms to share the source of their advantage is in some tension with the underlying purpose of antitrust law, since it may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities.”

[13] Hou, L., The Essential Facilities Doctrine – What Was Wrong in Microsoft?, 43(4) International Review of Intellectual Property and Competition Law 251-71, 260 (2012).

[14] See Williamson, O.E., The Vertical Integration of Production: Market Failure Considerations, 61 Am. Econ. Rev. 112 (1971); Klein, B., Asset Specificity and Holdups, in The Elgar Companion to Transaction Cost Economics, P. G. Klein & M. Sykuta, eds. (Edward Elgar Publishing, 2010), 120–126.

[15] Commission Decision No. AT.39740 — Google Search (Shopping).

[16] A. Hoffman, Where Does Website Traffic Come From: Search Engine and Referral Traffic, Traffic Generation Café (Dec. 25, 2018),

[17] See Manne, G., Against the Vertical Discrimination Presumption, Concurrences N° 2-2020, Art. N° 94267 (May 2020),

[18] On the need for caution when granting a right to access see, for example, Trinko: “We have been very cautious in recognizing such exceptions [to the right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal], because of the uncertain virtue of forced sharing and the difficulty of identifying and remedying anticompetitive conduct by a single firm.”

[19] United States v. Aluminum Co. of America, 148 F.2d 416, 430 (2d Cir. 1945).

[20] “Thus, as a general matter, the Sherman Act ‘does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.’” United States v. Colgate & Co., 250 U. S. 300, 307 (1919).

[21] Foremost Pro Color, Inc. v. Eastman Kodak Co., 703 F.2d 534, 545 (9th Cir. 1983) (citations omitted).

[22] See Manne, G. & B. Sperry, Debunking the Myth of a Data Barrier to Entry for Online Services, Truth on the Market (Mar. 26, 2015),; Manne, G. & B. Sperry (2014). The Law and Economics of Data and Privacy in Antitrust Analysis, 2014 TPRC Conference Paper, available at

[23] See generally, Grunes, A. & M. Stucke, Big Data and Competition Policy (Oxford University Press, Oxford, 2016); Newman, N, Antitrust and the Economics of the Control of User Data, 30 Yale Journal on Regulation 3 (2014).

[24] See the examples discussed in Manne, G. & B. Sperry, Debunking the Myth of a Data Barrier to Entry for Online Services, Truth on the Market (Mar. 26, 2015),

[25] Lerner, A., The Role of ‘Big Data’ in Online Platform Competition (2014),

[26] Bowman, S. & G. Manne, Platform Self-Preferencing Can Be Good for Consumers and Even Competitors, Truth on the Market (Mar. 4, 2021),

[27] C. Goujard, Google Forced to Postpone Bard Chatbot’s EU Launch Over Privacy Concerns, Politico (Jun. 13, 2023),

[28] M. Kelly, Here’s Why Threads Is Delayed in Europe, The Verge (Jul. 10, 2023),

[29] Musk Considers Removing X Platform From Europe Over EU Law, Euractiv (Oct. 19, 2023),

[30] Jud, M., Still No Copilot in Europe: Microsoft Rolls Out 23H2 Update, (Nov. 1, 2023),

[31] The Future is Bright for Latin American Startups, The Economist (Nov.13, 2023), available at

[32] See Distrito, Panorama Tech América Latina (2023), available at

[33] The following is adapted from Manne, G., Against the Vertical Discrimination Presumption, Concurrences N° 2-2020, Art. N° 94267 (May 2020) and our comments on the UK’s proposed Digital Markets, Competition and Consumers (“DMCC”) Bill: Auer, D., M. Lesh & L. Radic (2023). Digital Overload: How the Digital Markets, Competition and Consumers Bill’s Sweeping New Powers Threaten Britain’s Economy, 4 IEA Perspectives 16-21 (2023), available at

[34] H. Singer, How Big Tech Threatens Economic Liberty, The Am. Conserv. (May 7, 2019),

[35] Most of these theories, it must be noted, ignore the relevant and copious strategy literature on the complexity of platform dynamics. See, e.g., J. M. Barnett, The Host’s Dilemma: Strategic Forfeiture in Platform Markets for Informational Goods, 124 Harv. L. Rev. 1861 (2011); D. J. Teece, Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy, 15 Res. Pol’y 285 (1986); A. Hagiu & K. Boudreau, Platform Rules: Multi-Sided Platforms as Regulators, in Platforms, Markets and Innovation, A. Gawer, ed. (Edward Elgar Publishing, 2009); K. Boudreau, Open Platform Strategies and Innovation: Granting Access vs. Devolving Control, 56 Mgmt. Sci. 1849 (2010).

[36] For examples of this literature and a brief discussion of its findings, see Manne, G., Against the Vertical Discrimination Presumption, Concurrences N° 2-2020, Art. N° 94267 (May 2020),

[37] International Center for Law & Economics, International Center for Law & Economics Amicus Curiae Brief Submitted to the U.S. Court of Appeals for the Ninth Circuit 20-21 (2022),

[38] See generally, Hagiu & Boudreau, Platform Rules: Multi-Sided Platforms as Regulators, supra note 31; Barnett, The Host’s Dilemma, supra note 31.

[39] Barnett, J., id.

[40] See Radic, L. and G. Manne, Amazon Italy’s Efficiency Offense, Truth on the Market (Jan. 11, 2022),

[41] Introduced as Bill 294 (2022-23), currently HL Bill 12 (2023-24), Digital Markets, Competition and Consumers Bill, available at

[42] Farrell, J., & P. Klemperer Coordination and Lock-In: Competition with Switching Costs and Network Effects, 3 Handbook of Industrial Organization1967-2072 (2007), available at

[43] Bill 2768, “Justifications.” See also Wu, T, The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports (2018).

[44] Colangelo, G., The Digital Markets Act and EU Antitrust Enforcement: Double & Triple Jeopardy, ICLE White Paper 2022-03-23 (2022), available at

[45] See also Caffarra, C. and F. Scott Morton, The European Commission Digital Markets Act: A Translation, Vox EU (Jan. 5, 2021),

[46] How National Competition Agencies Can Strengthen the DMA, European Competition Network (Jun. 22, 2021), available at

[47] For the full study, see

[48] For a detailed overview of CADE’s decisions in digital platforms and payments services, see;

[49] See, e.g., Epic Games, Inc. v. Apple Inc. 20-cv-05640-YGR.

[50] Staats, J. L., & G. Biglaiser, Foreign Direct Investment in Latin America: The Importance of Judicial Strength and Rule of Law, 56(1) International Studies Quarterly 193–202 (2012),


[51] HL Bill 12 (2023-24), Digital Markets, Competition and Consumers Bill,

[52] Auer, D., M. Lesh, & L. Radic (2023). Digital Overload: How the Digital Markets, Competition and Consumers Bill’s Sweeping New Powers Threaten Britain’s Economy, 4 IEA Perspectives 16-21, available at

[53] See Dailey, M. Why the US Rejected European Style Digital Markets Regulation: Considerations for Brazil’s Tech Landscape, Progressive Policy Institute (Oct. 2, 2023), pp 5-6, available at

[54] Id.

[55] See Radic, L. and G. Manne, Amazon Italy’s Efficiency Offense. Truth on the Market (Jan. 11, 2022), available at

[56] ACCC, Digital Platform Services Inquiry, Discussion Paper for Interim Report No. 5: Updating Competition and Consumer Law for Digital Platform Services (Feb. 2022), available at

[57] Bowman, S. & G. Manne, Platform Self-Preferencing Can Be Good for Consumers and Even Competitors, Truth on the Market (Mar. 4, 2021),


[58] See Portuese, A. The Digital Markets Act: A Triumph of Regulation Over Innovation, ITIF Schumpeter Project (Aug. 24, 2022), available at


[59] Auer, D., G. Manne & S. Bowman, Should ASEAN Antitrust Laws Emulate European Competition Policy?, 67(5) Singapore Economic Review 1637–1697, 1687 (2022).

[60]See Lotz, A. ‘Big Tech’ Isn’t a Monolith. It’s 5 Companies, All in Different Businesses, Houston Chronicle (Mar. 26, 2018),; see also Chaiehloudj, W. & Petit, N. On Big Tech and The Digital Economy, Competition Forum (Jan. 11, 2021),

[61] Asher Hamilton, I. Tim Cook Says He’s Tired of Big Tech Being Painted as a ‘Monolithic’ Force That Needs Tearing Apart, Business Insider (May 7, 2019),

[62] Lotz, 2018.

[63] G. Cuofano, Amazon Revenue Breakdown, Four Week MBA (Aug. 10, 2023),

[64] International Center for Law & Economics, International Center for Law & Economics Amicus Curiae Brief Submitted to the U.S. Supreme Court (2022), available at

[65] See Zúñiga, M. Latin America Should Follow Its Own Path on Digital-Markets Competition, Truth on the Market (Nov. 7, 2023),

[66] As pointed out in Question 10, however, there is a risk of double jeopardy considering that some of the conduct caught by Bill 2768 might also be covered by Brazilian competition law. In such cases, the 2% would be compounded by the penalties contemplated under Act 12.529/11, the Brazilian competition law, and the level could easily be too high.

[67] Weekly Foreign Policy Report No. 1329: A Europe Vassal to the US?, Política Exterior (Jun. 26, 2023)

[68] See, e.g., 100 Biggest Technology Companies in the World, Yahoo Finance (Aug. 23, 2023), available at

[69] See, e.g., Weekly Foreign Policy Report No. 1329: A Europe Vassal to the US?, Política Exterior (Jun. 26, 2023)

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