Before Brazil Scrubs In: The Case Against Digital-Market Surgery
Brazil’s digital markets do not need a regulatory savior so much as a careful doctor. Bill 4,675/2025 arrives with the bedside manner of a reform, but the instruments of major surgery: a new bureaucracy, decade-long designations, and open-ended obligations for firms deemed systemically important. Before Congress scrubs in, it should ask whether the patient is actually failing—or whether Brazil’s existing antitrust tools are already doing much of the work.
Late last year, the Brazilian government submitted the bill to the Chamber of Deputies as part of its “Digital Brazil Agenda.” The proposal borrows from Europe’s Digital Markets Act (DMA), but it is not a straight copy. Its structure more closely resembles the United Kingdom’s Digital Markets, Competition and Consumers Act (DMCC).
Unlike the DMA, the bill would not impose a fixed list of obligations as soon as a company is designated. Instead, it creates a second-stage process in which the Administrative Council for Economic Defense (CADE) would study the designated firm’s markets and then decide which firm-specific duties to impose.
That may sound more restrained. It is still a major shift in Brazilian competition policy.
The bill would amend the Brazilian Competition Law (BCL) to create a new Digital Markets Superintendency (SMD) within CADE. It would empower CADE to designate firms as having “systemic relevance in digital markets” for up to 10 years. It would then allow the agency to impose tailor-made “special obligations” drawn from an open-ended statutory menu.
I have previously written here at Truth on the Market about several problems with this proposal. The bill risks quietly pushing aside the consumer-welfare standard and replacing it with vague goals like “the protection of the competitive process” and “the promotion of freedom of choice.”
Lazar Radic and I have also examined the institutional risks of creating the new SMD. That office would duplicate much of the work of CADE’s existing General Superintendence (SG), rather than building digital-market expertise inside CADE’s current investigative body.
The scale of this proposed overhaul deserved a more comprehensive look. To that end, Geoffrey Manne, Dirk Auer, and I recently published an International Center for Law & Economics (ICLE) white paper, “Digital Overreach: A Premature Turn to Ex Ante Regulation in Brazil.” Policymakers, legal practitioners, and academics should consult the full paper for a detailed economic and institutional assessment of the proposed regime.
This post highlights several of the paper’s central claims. Bill 4,675/2025 raises serious institutional concerns, and it may be unnecessary, given Brazil’s existing antitrust toolkit.
Europe’s early experience also offers a warning. Importing a DMA-style model could bring meaningful tradeoffs, including higher compliance and operational costs, more user friction, and further strain on Brazil’s already notorious “Custo Brasil”—the regulatory and structural cost of doing business in the country.
With that in mind, here are several points the Brazilian Congress should consider before enacting an ex ante regime like Bill 4,675/2025.