Computer Law & Security Review 52 (2024) 105937

Contents lists available at ScienceDirect

Computer Law & Security Review: The International

Journal of Technology Law and Practice
journal homepage: www.elsevier.com/locate/clsr

Lost in translation? Critically assessing the promises and perils of Brazil’s

Digital Markets Act proposal in the light of international experiments
Victor Oliveira Fernandes a, b, *
a
Professor of Economic Law and Competition Law, Brazilian Institute of Teaching, Development, and Research (IDP), Brasília, Brazil
b
Brazil’s Administrative Council for Economic Defense (CADE), Brasília, Brazil

A R T I C L E I N F O A B S T R A C T

Keywords: This paper undertakes a comprehensive analysis of Brazil’s initial draft legislation aimed at regulating compe­
Digital platforms tition in digital markets, which was submitted on November 10, 2022. The Brazilian proposal seeks to establish
Ex-ante regulation an asymmetric regulatory framework inspired by the European Union’s Digital Markets Act (DMA) in order to
Competition Policy
foster competition in digital markets. Although the draft promises have extensive scope, the lack of impact as­
Digital ecosystems
Digital Markets Act
sessments and public consultations in its introduction necessitates careful scrutiny. Our analysis compares the
Section 19a of the German Competition Law different aspects of PL 2,768 with the DMA, the new Section 19a of the German Competition Law, and the UK’s
UK’s Digital Markets, Competition and digital markets, Competition and Consumers Bill. This comparison reveals similarities as well as differences that
Consumers Bill require adjustment. Fundamentally, the last version of the Brazilian proposal lacks well-defined goals, with
unclear consequences of the stated principles for regulating platforms. This ambiguity creates uncertainty
regarding whether obligations should conform to or go beyond the prevailing prioritization of consumer welfare
in Brazil’s antitrust policy. In addition, the legislation adopts a regulatory approach that may overlook the
complexity of platform power in the context of digital ecosystems. Moreover, the proposal’s leaner obligations
framework may overlook the opportunity to thoroughly analyze international experiments that could provide
valuable insights for Brazil’s approach. PL 2,768 aims to update competition policy, but achieving this goal
requires a thoughtful reassessment of legislation and open discussion with the public. Adopting evidence-based
assessment and drawing on comparative lessons could greatly improve the effectiveness of the proposal.

1. Introduction Agency (ANATEL), traditionally charged with regulating telecommuni­

cations service providers, rather than the Brazilian Competition Au­
The first legislative proposal to regulate digital platforms competi­ thority (CADE in Portuguese).
tion in Brazil was submitted before the National Congress on November The adoption of an ex-ante regulation in Brazil could be potentially
10, 2022 (PL 2768).1 As mentioned in its explanatory memorandum, the driven by the similar apprehensions reflected in numerous research
proposed bill is largely influenced by the European Union’s Digital studies about the limitations of conventional competition law frame­
Markets Act (DMA).2 The Brazilian version establishes an asymmetric works within digital markets. There are increasing claims in the litera­
regulatory regime for companies with ‘crucial access control power’ (an ture that traditional antitrust ex-post regimes have failed to keep the
analog of the gatekeeper concept), which will be subject to loosely digital economy open and contestable. The most acknowledged de­
defined rules and obligations. In an unexpected shift, enforcement of ficiencies primarily pertain to the extensive time and resources required
legislation will be the responsibility of the National Telecommunications for antitrust investigations,3 the high burdens of proof associated with

* Corresponding author at: Brazilian Institute of Teaching, Development, and Research (IDP), SGAS II St. de Grandes Áreas Sul 607 Módulo 49 - Asa Sul, Brasília -
DF, 70200-670, Brasil.
E-mail address: [email protected].
1
Brazilian Congress, PL 2768/2022 (10 November 2022) https://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2337417 accessed 29
July 2023.
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 [2022] OJ L265/1.
3
Luís Cabral et al., ’The EU Digital Markets Act: A Report from a Panel of Economic Experts’ (Centre for Economic Policy Research, 2021) 6.

https://doi.org/10.1016/j.clsr.2024.105937

Available online 20 January 2024

0267-3649/© 2024 Elsevier Ltd. All rights reserved.
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

abuse of dominance cases,4 and the challenges in designing effective regulating platform power are unclear and open to interpretation. The
remedies.5 lack of clarity in this matter raises doubts about whether obligations
Beyond the EU, the shift towards new ex-ante initiatives has been should adhere to or go beyond the consumer welfare prioritization that
increasing, following proposals such as the new Section 19a of the is deeply ingrained in Brazil’s antitrust policy. Moreover, the legisla­
German Competition Act (Gesetz gegen Wettbewerbsbeschränkungen – tion’s prevailing essential facility paradigm presents an inconsistent
GWB) ,6 the UK’s Digital Markets, Competition and Consumers Bill viewpoint on platform dominance that is not based on inherent limita­
(DMCCb),7 and many others.8 In the absence of a one-fits-all model, the tions but rather intentional choices that take advantage of cross-
body of literature now dives deeper into the critical choices regarding platform network effects. Considering digital gatekeepers as public
many fundamental elements of regulatory proposals, such as the goals of utilities is conceptually inaccurate, as it does not align with the
new legislations, the scope of ex ante regulation, and the institutional nonlinear value creation logic that forms the basis of their business
framework to support enforcement.9 models.
The potential of ex-ante digital regulations to modernize competition We identify significant prospects for legislative enhancements to
supervision is significant. However, their effectiveness relies on careful strengthen the effectiveness and precision of PL 2768. Relying solely on
calibration that considers the complex economics of digital ecosystems. revenue metrics for enforcing penalties, without conducting a qualita­
Against this backdrop, the implications of PL 2768 for Brazil’s digital tive assessment, poses the risk of producing unfair outcomes and lacks
market competition policy are diverse and complex. On one side, it of­ crucial transparency. Furthermore, although PL 2768 aims to distance
fers the potential to rectify the deficiencies of the existing Brazilian itself from the perceived inflexibility of the DMA, its minimalist struc­
Competition Act of 2011, specifically in regard to tackling the misuse of ture has the potential to reduce its effectiveness. Learning about the
dominant positions in digital markets. The proposal’s emphasis on ex- German and UK models could be advantageous to identify an optimal
ante regulation stems from the increasing belief that the highly equilibrium. These frameworks try to effectively reconcile flexibility and
concentrated nature of numerous digital markets may require more specificity, a combination that may be more suitable for Brazil’s
interventionist approaches to ensure equitable competition. However, particular circumstances.
the bill’s efficacy depends on its exact formulation and interpretation. The remainder of this paper clarify the merits of PL 2768, as well as
The proposal of PL 2768 warrants a thorough examination due to its aspects that require revision. Section 2 chronicles the policy shift from
lack of public consultations or impact assessments, and its reliance on conventional competition regimes towards ex-ante digital governance
evidence-based foundations. This article critically examines the objec­ models more responsive to contemporary challenges. An analysis of the
tives, covered entities, obligations, and enforcement strategies of the progress in Europe and Brazil’s antitrust enforcement reveals similar
proposed legislation by comparing them systematically with the DMA underlying motivations that could potentially generate support for leg­
and other international regulatory efforts like the new Section 19a of the islative reforms. Section 3 subsequently undertakes systematic com­
German Competition Act and the UK’s proposed DMCC bill. The selec­ parison of PL 2,768′s fundamental facets against the DMA, which was
tion of these specific proposals for comparative analysis stems from their cited in the explanatory memorandum of the Brazilian proposal as its
extensive exploration in recent competition law scholarship, alongside main reference point. This analysis reveals substantial commonalities
exemplifying three European experiences with striking commonalities. alongside key divergences regarding covered entities and obligations.
This mapping clarifies areas of agreement and significant differences, This mapping notes the Brazilian proposal’s minimalism relative to the
serving as important reference points to enhance discussions on opti­ DMA’s meticulous categorizations. Section 4 argues the legislation could
mizing and contextualizing this influential Brazilian proposal. have benefited from analyzing alternative international experiments.
This article argues that PL 2768 lacks clearly defined policy objec­ Exploring German and UK initiatives reveals more open-ended conduct
tives, and the implications of the constitutional principles listed for stipulations balancing flexibility and specificity potentially better suited
to Brazil’s unique circumstances. Section 5 rigorously examines PL
2768, underscoring inherent difficulties stemming from ambiguity
4
Pierre Larouche and Alexandre De Streel, ‘The European Digital Markets
regarding goals and enforcement strategies. Finally, Section 6 concludes
Act: A Revolution Grounded on Traditions’ (2021) 12 Journal of European that while PL 2768 signifies a dividing line moment for Brazilian digital
Competition Law and Practice 542; Anne C Witt, ‘Platform Regulation in competition policy, addressing its promise necessitates careful
Europe – Per Se Rules to the Rescue?’ (2022) 18 Journal of Competition Law & recalibration.
Economics 670, 675–677
5
Philip Marsden and Rupprecht Podszun, ‘Restoring Balance to Digital 2. The road towards digital platform regulation in the EU and
Competition – Sensible Rules, Effective Enforcement’ (Konrad-Adenauer-Stif­ Brazil
tung, 2020) 1 16;
6
Gesetz gegen Wettbewerbsbeschränkungen [Act against Restraints of The move towards a regulatory paradigm in competition law stems
Competition] (GWB) Section § 19a.
7 from a belief that conventional ex-post-based competition law regimes
Digital Markets, Competition and Consumers Bill, UK Draft Bill 2022-2023
were incapable of maintaining digital markets open and contestable.10
(Government Bill). Available at https://bills.parliament.uk/bills/3453.
8
As of September 2023, the OECD Competition Division has mapped as
This notion can be somehow tracked to a numerous expert reports
remarkable examples of new ex-ante initiatives the aforementioned proposals released in the last five years. These reports consistently point out that
alongside with Japan’s Act on Improving Transparency and Fairness of Digital certain economic characteristics of digital platforms – such as network
Platforms (“TFDPA”); US’s (i) American Choice and Innovation Online Act effects, economies of scale and data-driven advantages – tend to
S.2992, as reported by the Senate Judiciary Committee; and the Open App
Markets Act S. 2710, as reported by the Senate Judiciary Committee and
Korea’s Fair Online Platform Intermediary Transactions Act. In this regard, see
Organization for Economic Co-operation and Development - OECD, ‘G7 In­
ventory of New Rules for Digital Markets: Analytical Note’ (OECD Publishing,
2023) 1 <https://www.oecd.org/competition/analytical-note-on-the-g7-inve
ntory-of-new-rules-for-digital-markets.pdf>.
9 10
For a comparative overview of these new regulatory initiatives, see Marco Organisation for Economic Co-operation and Development (OECD), ’Ex
Botta, ‘Sector Regulation of Digital Platforms in Europe: Uno, Nessuno e Cen­ Ante Regulation and Competition in Digital Markets’ (OECD Publishing, 2020)
tomila’ (2021) 12 Journal of European Competition Law and Practice 500; Elias 11-12; Marco Cappai and Giuseppe Colangelo, ‘Taming Digital Gatekeepers:
Deutscher, ‘Reshaping Digital Competition: The New Platform Regulations and The “More Regulatory Approach” to Antitrust Law’ (2021) 41 Computer Law
the Future of Modern Antitrust’ (2022) 67 Antitrust Bulletin 302. and Security Review 1, 6–8.

2
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

entrench the market power of large platforms.11 It is also argued that the increasing extent of regulatory supervision in the digital industry. One of
prevailing static and price-based methodologies under conventional these inquiries focused on Amazon’s purported favoritism towards its
competition law frameworks are inadequate in preventing large tech­ own products compared to those of other sellers on its platform, as well
nology firms from extracting undue economic rents, diminishing qual­ as the use of sales data from these sellers. Amazon’s contracts with
ity, and stifling innovation.12 merchants and the use of data played a crucial role in determining the
The proposal of Bill 2768 in Brazil signals a decisive shift toward ex winner of the "buy box". In response to the concerns raised by the
ante regulation, a trend that resonates with global legislative move­ Commission, Amazon has proposed commitments to refrain from uti­
ments aimed at modernizing competition law for the digital age. This lizing confidential information obtained from its marketplace sellers for
section critically examines the trajectory of this regulatory shift, its own retail operations.16 This restriction applies to both automated
particularly in the European Union, to understand the undercurrents tools and employees, with the objective of preventing the unauthorized
that led to the emergence of the Digital Markets Act (DMA) and similar use of data for the sale of Amazon’s own branded and private label
proposals. In doing so, we aim to shed light on the reasons behind the products. In addition, Amazon has pledged to ensure fair treatment of all
movement towards a more regulatory approach to competition law that sellers in the "buy box" selection process and to present a separate,
may be relevant for Brazil. distinguishable offer if it significantly differs from the first offer in terms
While the EU’s approach has been characterized by a rigorous of price or delivery.17
assessment of its existing competition law framework, paving the way Recently, the European Commission has issued Statements of Ob­
for the DMA, Brazil’s legislative proposal appears to have embarked on a jections to both Apple and Meta, expressing concerns about possible
similar path without such an exhaustive preliminary analysis. This lack abuses of dominance. The Commission has identified certain practices
of comprehensive review raises the question of whether the underlying by Apple in relation to its App Store rules, which it deems to be unfair
principles of Brazil’s competition law (Law 12.529/2011) and the trading conditions that have a detrimental impact on music streaming
enforcement practices of the Administrative Council for Economic De­ app developers and users.18 Concerning Meta, the Commission expresses
fense (CADE) are sufficient for the unique challenges posed by digital apprehensions regarding the company’s integration of its Facebook
markets. Marketplace service with the Facebook social network, as well as its
In an attempt to bridge this assessment gap, we delve into the current imposition of unjust trading conditions on rival online classified ads
enforcement landscape in Brazil and argue that the hallmarks of the EU’s services. The investigations are currently in progress, however, based on
regulatory movement are indeed discernible in Brazil’s digital market the procedural measures taken, it appears that the Commission’s initial
interventions. CADE’s recent cautious stance on digital markets, char­ assessment suggests that certain actions carried out by Apple and Meta
acterized by a traditional emphasis on avoiding false positives, suggests might be in violation of the competition regulations set by the European
a potential willingness to recalibrate its regulatory approach. Through Union.19
this analysis, we will examine the factors that may require a reinvigo­ The DMA seeks to rectify perceived deficiencies in the regulations of
ration of Brazilian competition law, in line with global regulatory re­ competition law in the European Union. According to the Impact
forms, to effectively govern the expanding digital marketplace. Assessment Report of the European Commission, Articles 101 and 102
TFUE are insufficient in addressing problems such as market tipping and
2.1. Evaluating the limits of EUu competition law: catalysts for pro- unfair practices by digital gatekeepers.20 Furthermore, current compe­
competition reform tition tools such as penalties and sector inquiries have a restricted scope
and encounter procedural limitations that impede prompt intervention
To grasp the shift towards a more regulatory approach in the Euro­ in order to avert market failures.21 The DMA aims to promote contest­
pean Union, one must understand the recent enforcement trends under able and fair markets that EU competition law has potentially not been
Article 102 TFEU targeting Big Tech companies. The trajectory began successful in implementing a predetermined set of obligations and re­
with the Google Shopping case in 2017,13 in which Google was penal­ strictions for designated digital "gatekeepers."
ized for giving preferential treatment to its own price comparison ser­ The felt limitations of traditional antitrust enforcement in digital
vice in search results. Google was also fined in the Google Android markets can be analyzed along both procedural and substantive di­
case14 for requiring Original Equipment Manufacturers (OEM) to pre- mensions, both interviewed. From a procedural perspective, in­
install its search and browser apps in order to license its app store. vestigations under Article 102 TFEU are perceived as protracted by
Finally, in the Google AdSense case,15 Google received a penalty for nature and resource-intensive, and, because of that, they might lead to
implementing exclusivity clauses on publishers, which limited their
ability to display search advertisements from competitors on their
websites.
In addition to Google, the European Commission has also conducted
three substantial investigations against Amazon, highlighting the

11 16
This was also highlighted in several reports issued by competition author­ Commission Decision of 20 December 2022, Case COMP/AT.40462 -
ities and experts around the world. See, for instance, Jacques Crémer, Yves- Amazon Marketplace.
17
Alexandre De Montjoye and Heike Schweitzer, ‘Competition Policy for the Commission Decision of 20 December 2022, Case COMP/AT.40703 -
Digital Era’ (European Commission Final Report 2019); Fiona Scott Morton and Amazon Buy Box.
18
others, ‘Stigler Center Report’; Jason Furman and others, ‘Unlocking Digital Statement of Objections addressed to Apple on practices regarding its App
Competition: Report of the Digital Competition Expert Panel’ (2019). Store of 28 February 2023, Case COMP/AT.4043 – Apple App Store; Statement
12
For a comprehensive overview of those reports, see Filippo Lancieri and of Objections addressed to Apple over practices regarding Apple Pay of 2 May
Patricia Morita Sakowski, ‘Competition in Digital Markets: A Review of Expert 2022, Case COMP/AT.40452 – Apple—Mobile Payments. There are other
Reports’ (2021) 26 Stanford Journal of Law, Business & Finance 65. proceedings against Apple where no Statement of Objection were issued so far.
13 19
Commission Decision of 27 June 2017, Case COMP/AT.39740 - Google Statement of Objections to Meta over abusive practices benefiting Facebook
Search (Shopping). Marketplace of 19 December 2022, Case COMP/AT 40684 – Facebook
14
Commission Decision of 18 July 2018, Case COMP/AT.40099 - Google Marketplace.
20
Android. European Commission, ‘Impact Assessment Report - Proposal for The Dig­
15
Commission Decision of 20 March 2019, Case COMP/AT.40411 - Google ital Markets Act’ (2020) paras 119–121.
21
AdSense. ibid 122.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

delayed interventions.22 Emblematic examples in that regard often (EAGCP) report, the main emphasis of abuse of dominance rules should
include the Microsoft I23 and Google Shopping24 cases, which took more be redirected towards the impacts on "consumer welfare", with a specific
than 4 and 6 years to resolve respectively, despite these cases are in fact emphasis on assessing the detrimental effects of anti-competitive
outliners in comparison with other EU or national cases.25 Moreover, the behavior on consumers, rather than on the competitive process.32
case-specific nature of Article 102 TFEU investigations requires strict However, the Guidance Paper did not successfully resolve debates
adherence to procedural rights in an adversarial setting that complicates regarding the application of Article 102, as it only aimed to provide
and potentially extends the Commission’s decision-making process. prioritization guidelines for enforcement. In subsequent judgments from
While the length in investigations could be offset using interim mea­ the Court of Justice of the European Union (CJEU), such as Post Danmark
sures, it is debatable whether these measures are genuinely restorative. II, it was explicitly stated that the Guidance does not have the power to
Substantive obstacles in EU competition law rules are notably more compel authorities or courts.33 Although cases such as Intel have grad­
difficult to grasp. The concepts and methodologies for finding an abuse ually improved effects-based analysis under Article 102, significant
of dominance under Article 102 TFEU are often seen as hurdles in disagreements continue to exist in the decision-making process.
addressing unfair conduct by major tech companies.26 During the early Following the modernization process, there is currently no compre­
stages of discussing the DMA proposal, it was unclear whether the de­ hensive and universally applicable legal standard for evaluating exclu­
parture from existing competition rules was limited to shifts in the sionary practices within the framework of EU competition law.34
analytical concepts and methodologies of competition law, or if it also Amidst these unsettled debates, the Commission’s shift towards a
indicated a change in the fundamental legal interests being safeguarded broader regulatory approach for digital platforms holds seems indeed
by the new regulation.27 justifiable. In our view, the core issue with traditional competition rules
To fully understand this matter, it is imperative to analyze the is that, to counterbalance broad statutory texts like Article 102, legal and
development of the European competition law framework through legal economic scholarship has come to rely on a procedural logic focused on
decisions in recent years. Since the early 2000s, there has been an categorizing conduct and assessing its real or potential impacts on
intense discussion in European Community law regarding the optimal competition within established legal categories of abuse grounded in
approach to enforce Article 102. In line with the modernization process existing jurisprudence. Indeed, either under a form-based or an effects-
of EU Competition Law started in the 2000s,28 in 2009, the European based approach, the adjudication of competition law rules inevitably
Commission adopted its ’Guidance on the Commission’s enforcement involves a classificatory rationality.35 However, emerging digital busi­
priorities in applying Article 102 of the TFEU to abusive exclusionary ness strategies often elude straightforward definition within conven­
conduct by dominant undertakings.’29 This document represented a tional analytical rubrics. For instance, in situations where platforms
shift in the Commission’s approach, aligning antitrust enforcement with stand accused of leveraging market power into adjacent markets (which
modern antitrust economic theories. It aimed to replace the rigidity of may not be readily identifiable as horizontally or vertically related),
form-based rules adopted in jurisprudence with more flexible standards, categorization becomes especially tricky.36 To establish whether such
taking into account both pro-competitive and anti-competitive effects of conducts should be analyzed as illegal tying, refusal to deal, or another
dominance abuse practices.30 This transition was widely perceived as a conventional form of abuse - each prompting divergent legal tests and
shift towards the so-called "more economic approach".31 From what was presumptions - requires contorting novel digital business strategies into
outlined in the Economic Advisory Group for Competition Policy rigid analytical frameworks grounded in existing precedent. The dy­
namic nature of digital markets means the Commission has accumulated
only limited case experience regarding online platform conduct so far.37
As a result, slotting novel forms of digital exclusion into conventional
22
Luís Cabral and others, ‘The EU Digital Markets Act: A Report from a Panel analytical frameworks grounded in prior precedents becomes excep­
of Economic Experts’ (2021) 28-29; Marsden and Podszun (n 5) 16–17.
23 tionally demanding and clashes with the more transformative role
Commission Decision of 24 March 2004, Case COMP/AT.37792 Microsoft.
24 envisioned by the DMA.
Commission Decision of 27 June 2017, Case COMP/AT.39740 Google
Search (Shopping).
The contrast between digital markets’ innovative abuses and the
25
Heike Schweitzer and Frederik Gutmann, ‘Unilateral Practices in the Digital adversarial Article 102 system features prominently in the Google
Market: An Overview of EU and National Case Law’ [2021] e-Competitions Shopping case, with endless debates on whether Google’s prioritization
Specia l Issue Uni latera l practices in the digita l market 1, 11. of affiliated results constitutes illegal tying, refusal to deal – categories
26
Anne C Witt, ‘The Digital Markets Act – Regulating the Wild West’ (2023) carrying divergent legal tests – or some other novel form of abuse. The
60 Common Market Law Review 625, 629–631. Commission decision ultimately adopted a broader “leveraging”
27
Heike Schweitzer, ‘The Art to Make Gatekeeper Positions Contestable and approach, diverging from Oscar Bronner’s indispensability test, albeit
the Challenge to Know What Is Fair: A Discussion of the Digital Markets Act
Proposal’ (2021) 3 Zeitschrift für europäisches Privatrecht 517. (positing that
“the new regime of European platform regulation protects the same legal in­
32
terest as EU competition law, namely open markets and a fair and undistorted Pinar Akman, The Concept of Abuse in Competition Law: Law and Economics
competitive process. What differs are, first, the threshold of intervention and, Approach (Hart Publishing 2015) 271.
33
second, the legislative technique”). Case C-209/10 Post Danmark A/S v Konkurrencerådet ECLI:EU:C:2012:
28
The key catalyst for this process was the publication of a report by a group 172, [2012] 5 CMLR 969, para 52.
34
of economic consultants overseen by DG-Comp. This group advocated that the Pablo Ibáñez Colomo, ‘Legal Tests in EU Competition Law: Taxonomy and
application of the then Article 82 of the TFEU should be reshaped to favor an Operation’ (2019) 10 Journal of European Competition Law and Practice 424.
35
effect-based economic approach, similar to that used in merger control. See Ioannis Lianos, ‘Categorical Thinking in Competition Law and the “Effects-
Patrick Rey and others, ‘Report “ An Economic Approach to Article 82 ” - Based” Approach in Article 82 EC’, Article 82 EC: Reflections on its Recent Evo­
Economic Advisory Group for Competition Policy (EAGCP)’ (2005) 1. lution (Hart Publishing 2009) (explaining that, even under the "effects-based
29
European Commission, ‘Guidance on the Commission’s enforcement pri­ approach", the identification of a theory of consumer harm involves a process of
orities in applying Article 82 of the EC Treaty to abusive exclusionary conduct categorisation of the practice as falling within the boundaries of a specific
by dominant undertakings’ (Communication) C45/7, [2009] OJ C45/7. theory, eg raising rivals’ cost, leveraging, predation, maintenance of monopoly
30
Pinar Akman, ‘The European Commission’s Guidance on Article 102 TFEU: strategy, a two-sided market situation).
36
From Inferno to Paradiso?’ (2010) 73 The Modern Law Review 605, 606–607; Pablo Ibáñez Colomo, The Shaping of EU Competition Law (Cambridge Uni­
Robert O’Donoghue and Jorge A Padilla, The Law and Economics of Article 102 versity Press 2018) 212.
37
TFEU (Hart Publishing 2020) 177–178. Frederic Jenny, ‘Proving Competition Violations under EU Law: Legal
31
Anne C Witt, The More Economic Approach to EU Antitrust Law (Hart Pub­ Approach and Economic Reasoning’, Antitrust and the Digital Economy: Legal
lishing 2016) 146–149. Standards, Presumptions and Key Challenges (2023) 86.

4
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

leveraging seems to be as a unified form of abuse than an “umbrella represent an opportunity to reconstitute a coherent analytical frame­
label” encompassing various types of conducts.38 work aligned with accumulated case law.46
The General Court confirmed the Commission’s decision but rede­ Beyond these substantive complexities in applying Article 102, the
fined the abuse as "discrimination" infringement. Nevertheless, the de­ aftermath of its enforcement track record against major technology
cision has faced criticism due to the lack of clarity regarding whether companies has thus far failed to spur significant structural shifts across
some emphasized factors, such as extreme dominance, essential facility digital markets. A principal issue driving this questionable efficacy is the
characteristics, a theoretically open but partially closed infrastructure, inherently reactive nature of antitrust enforcement, which often fails to
and a legislative non-discrimination choice, form the basis of the new restore competition in a timely manner while potentially anticompeti­
legal test or are merely specific to the case at hand.39 The General tive practices are ongoing in fast-changing markets.47 In addition,
Court’s ruling is susceptible to sharply divergent readings. On one view, competition authorities appear less capable than regulatory agencies
it establishes a novel platform abuse category with potentially expansive when remedying anticompetitive harm involves reconsidering a prod­
applicability beyond the case specifics. Alternatively, it constructs an ucts’ design.48 The failed remedies in the Google Shopping case exem­
abuse notion narrowly constrained by the particularized facts and plify this obstacle, highlighting the considerable difficulties antitrust
Google’s idiosyncratic business model.40 For that reason, it seems enforcement faces in meeting the nuanced demands of regulating
reasonable to claim that the Court’s decision represents more indicative modern digital market.49
of a “bold” judicial stance41 than a clear-cut succeeds of the Commis­ The constraints of the prevailing antitrust approach along with its
sion’s adherence to established legal standards. This naturally raises failure to sufficiently promote contestable markets substantially bolster
questions about the legitimacy of the Commission adapting Article 102′s the case that legislation such as the DMA constitutes a necessary com­
legal tests to address novel forms of abuse.42 Rather than resolve plement the competition law rules. Faced with navigating entrenched
doctrinal tensions, the case epitomizes clashes between procedural orthodoxies of antitrust economics, the Commission judiciously forged
principles and digital innovation now unfolding across EU competition an alternative path forward via tailored regulatory policy. The European
law. Union’s DMA goals indeed seem unattainable under the “more economic
Several questions around the proper application of Article 102 TFEU approach” alone. A strict focus on consumer welfare risks narrowing
remain unsettled, as the Commission on March 27, 2023 announced an interpretations of anticompetitive harm to losses in consumer surplus,
initiative to adopt new Guidelines on exclusionary abuse.43 On that date, occasionally overlooking subtle yet consequential impediments to
the Commission revised its 2008 Enforcement Priorities Guidance, competition that the DMA strives to tackle more broadly. As this paper
amongst other changes, pointing that considering enforcement experi­ will subsequently examine, by endeavoring to proactively lower barriers
ence and case law clarifications, pursuing only conduct excluding to entry and realign business-to-business economic ties, the DMA sig­
competitors as efficient as the dominant undertaking warrants nifies a critical shift in utilizing competition policy as a more proactive
rethinking.44 An accompanying policy brief clarified that conditions regulatory tool.
limiting the as-efficient competition principle particularly manifest in It is essential to emphasize, however, that this emergent ex-ante
certain digital markets, where exclusionary conduct typically deprives approach is not entirely shielded from demands for greater legal cer­
prospective challengers of realistic expansion prospects or long-term tainty, a challenge reminiscent of those faced in the enforcement of
viability.45 Amidst the European Court of Justice’s myriad course- traditional competition rules. Similar to the development of the ’more
correcting judgments on prior Commission Article 102 interpretations economic approach’ for enhancing legal predictability and certainty in
leaving many questions unsettled, the newly announced Guidelines the Commission’s activities, the successful deployment of the DMA
equally depends on establishing some well-defined normative principles
and transparent enforcement guidelines, albeit more administrative
38 discretion should be granted. The effectiveness of the DMA as an inno­
Friso Bostoen, ‘The General Court’s Google Shopping Judgment Finetuning
vative institutional experiment hinges on the law’s internal consistency
the Legal Qualifications and Tests for Platform Abuse’ (2022) 13 Journal of
European Competition Law and Practice 75.
and its application by the Commission in the years ahead. The capacity
39
ibid. of the DMA to effectively transform the digital market landscape will
40
Christian Ahlborn and others, ‘Bronner Revisited: Google Shopping and the rest on its ability to maintain a balance between regulatory discretion
Resurrection of Discrimination Under Article 102 TFEU’ (2022) 13 Journal of and legal stability, a critical equilibrium necessary to ensure that the
European Competition Law & Practice 89 (stating that " while the General
Court’s Google Shopping judgment boldly frames self- preferencing as a new
category of discriminatory abuse under Article 102 TFEU, we argue that it also
46
articulates self preferencing as a narrow category of abuse, relevant most In this regard, see Pablo Ibáñez Colomo, ‘The (Second) Modernisation of
notably for certain digital platforms"). Article 102 TFEU: Reconciling Effective Enforcement, Legal Certainty and
41
Rupprecht Podszun, ‘From Competition Law to Platform Regulation - Meaningful Judicial Review’ [2023] Journal of European Competition Law &
Regulatory Choices for the Digital Markets Act’ (2023) 17 Economics 1, 4 Practice 1.
47
(referring to the General Court decision as a "boldly" move in establishing a Larouche and De Streel (n 4) 546-547 (asserting that “competition law is
theory of harm on its own); always running behind market developments”); Cristina Caffarra, ‘The EU
42
Justin Lindeboom, ‘Rules, Discretion, and Reasoning According to Law: A General Court Confirms Abuse of Dominance by a Big Tech Company through
Dynamic-Positivist Perspective on Google Shopping’ (2022) 13 Journal of Eu­ Tying, with the Real Legacy of the Case Extending Far beyond (Google
ropean Competition Law and Practice 63. Android)’ [2022] e-Competitions News Issue 1, 6 (claiming that "the EU Gen­
43
European Commission, ‘Antitrust: Commission consults stakeholders on a eral Court confirms abuse of dominance by a Big Tech Company through tying,
new competition tool’ (Press Release, 31 March 2023) https://ec.europa. with the real legacy of the case extending far beyond (Google Android)".
48
eu/commission/presscorner/detail/en/IP_23_1911. Filippo Lancieri and Caio Mario da Silva Pereira Neto, ‘Designing Remedies
44
European Commission, ‘Annex to the Communication from the Commission for Digital Markets: The Interplay Between Antitrust and Regulation’ (2022) 18
Amendments to the Communication from the Commission Guidance on the Journal of Competition Law and Economics 613.
49
Commission’s enforcement priorities in applying Article 82 of the EC Treaty to Philip Marsden, ‘Google Shopping for the Empress’s New Clothes -When a
abusive exclusionary conduct by dominant undertakings’ (Commission Remedy Isn’t a Remedy (and How to Fix It)’ (2020) 11 Journal of European
Communication) C(2023) 1923 final, 27 March 2023, para. 2. Competition Law and Practice 553 (contending that the remedy implemented in
45
Linsey McCallum and others, ‘A Dynamic and Workable Effects-Based the Google Shopping case fails to address discrimination against shopping
Approach to Abuse of Dominance’ [2023] Competition Policy Brief 1, 5 comparison services. Instead of making these services more visible, they remain
(“explaining that requiring evidence of foreclosure of hypothetical as-efficient obscured, leading to a decrease in their traffic. This situation has worsened,
competitors in such markets risks under-enforcement). rendering them nearly invisible to users).

5
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

DMA does not replicate the inherent shortcomings and challenges of the competition law”54 or as the "deconstitutionalization of competition
traditional antitrust framework it seeks to complement. law”. 55 In addition, the notion of "consumer welfare" as the main goal of
antitrust policy in Brazil was deeply reinforced in CADE’s case law.56
Although Brazil’s competition legislation does not inherently preclude
2.2. Navigating Brazil’s antitrust landscape: the case for a more broader goals, considerations beyond the neoclassical perspective have
regulatory approach been largely absent in practice.57 As a result, notions of competition
extending beyond price and output effects, such as impacts on innova­
This section critically examines the enforcement challenges within tion, barriers to entry, or fairness, have not featured prominently in
Brazilian competition law, drawing comparisons with the European enforcement outcomes. While it is not clear whether the existing legal
Union’s experiences. It focuses on exploring whether the same factors framework allows room for a multifaceted view of competition, the
that have prompted a shift towards ex-ante regulation in the EU are also actual application of Brazilian competition law has yet to substantially
present under the Brazilian Competition Law. In an effort to bridge the integrate policy objectives going beyond the neoclassical economic
analytical divide, the section scrutinizes Brazil’s enforcement practices paradigm.
in digital markets, hypothesizing that the motivations fueling the EU’s The relevant sections within the Brazilian Competition Act of 2011,
regulatory shift are paralleled in Brazil’s digital market interventions. while not modifying the substantial provisions of the previous Law
Within this exploration, it becomes crucial to understand the reasons 8884/1994, do indeed demonstrate significant resemblances to the
behind Brazil’s reputedly "cautious" approach in digital market enforcement principles advocated by the mainstream antitrust eco­
enforcement as characterized by specialized literature.50 Delving into nomics.58 Article 36(1) of the Brazilian Competition Act, for example,
the rationale for this perceived caution will shed light on how it corre­ states that “it is not a violation of competition law for a company to gain
sponds with the broader trend towards a more regulatory-focused market power by becoming more efficient than its competitors”.59
approach, potentially indicating a convergence in global regulatory Similarly, the merger review provisions contained in Article 90 allow
strategies in response to the unique challenges posed by digital markets. CADE to approve mergers that eliminate competition in a substantial
The evolution of antitrust policy in Brazil, with a long historical part of a relevant market if the merger otherwise "increases productivity
trajectory,51 has been significantly shaped by legislative reforms in the or competitiveness" or even "promotes efficiency and technological or
1990s. During this period, the Brazilian regulatory agencies in infra­ economic development”.60
structure sectors have increasingly adopted international best practices, Given this historical background, CADE has struggled to reach con­
reflecting the professionalization and bureaucratization of the regula­ victions in abuse of dominance cases involving Big-Techs. In fact,
tory state. The internalization of the "Twentieth-Century Synthesis of CADE’s Tribunal reached a final decision in only three cases, all of which
economic regulation"52 has been especially apparent in Brazilian involved Alphabet Inc. and were dismissed in 2019.61 The first case
competition policy. involved accusations against Google of scrapping and appropriating
Since the 1990s, the prevailing framework of Brazilian competition customer reviews from competing price comparison websites and sub­
law has predominantly focused on objectives grounded in neoclassical sequently displaying them on the Google Shopping page. The exhaustive
“economic efficiency”. The influence of mainstream antitrust economics inquiry led by the Tribunal of CADE, however, did not corroborate any
has led to an orientation centered on static measures of consumer wel­ proof suggesting that those reviews were indeed exhibited on the Google
fare. Some prominent Brazilian Competition Law scholars have labeled
this historic shift as the "antitrust revolution,” 53 the “economization of

54
José Maria Arruda de Andrade, Economização Do Direito Concorrencial
50
BRICS Competition Innovation Law & Policy Joint Research Platform, (Quartier Latin 2014) 174–175.
55
‘Digital Era Competition: Brics View’ (Brics Competition Law and Policy Centre, Luis Fernando Schuartz, ‘A Desconstitucionalização Do Direito de Defesa Da
2020) 1 89 (asserting that ’in Brazil, regulators have taken a cautious stance Concorrência’ (2009) 16 Revista do IBRAC 1 (describing that, since the insti­
regarding issues in digital markets [as] they have generally avoided undue tutionalization in Brazil of a normative theory of antitrust influenced by
intervention in very dynamic markets); Caio Mário S Pereira Neto, Ricardo mainstream US economic thought of the 1970s, CADE’s decision-making pro­
Ferreira Pastore and Raíssa Paixão, ‘Competition Law Enforcement in Digital cesses have become ’impervious to substantive arguments of a constitutional
Markets: The Brazilian Perspective on Unilateral Conducts’ [2022] The Anti­ nature’).
56
trust Bulletin 1, 3–8. Luiz Felipe Rosa Ramos, Antitrust and the Multivalued Function of Competition
51
For an analysis of the historical context of the first Competition Act of 1962 (Hart Publishing, Nomos 2021) 87–90.
57
in Brazil, see Francisco Ribeiro Todorov and Marcelo Maciel Torres Filho, Calixto Salomão Filho, Teoria Crítico-Estruturalista Do Direito Concorrencial
‘History of Competition Policy in Brazil: 1930–2010’ (2012) 57 The Antitrust (Marcial Pons 2015) 234–235; Paula Andrea Forgioni, ‘O Que Esperar Do
Bulletin 207, 210–224 and also Mário André Machado Cabral, ‘O Sentido de Antitruste Brasileiro No Século XXI?’, Fábio Nudeo. O Direito Econômico na
“Economia Popular”: A Origem Do Antitruste No Brasil Nos Anos 1930’ (2019) Atualidade (Editora Revista dos Tribunais 2015) 348–354; Ana Frazão, ‘A
14 Revista Eletrônica do Curso de Direito da UFSM 1. Necessária Constitucionalização Do Direito Da Concorrência’, Direitos Funda­
52
Jedediah Britton-Purdy and others, ‘Building a Law-and-Political-Economy mentais e Jurisdição Constitucional. (Editora Revista dos Tribunais 2014) .
58
Framework: Beyond the Twentieth-Century Synthesis’ (2020) 129 Yale Law Iagê Zendron Miola, ‘Competition Law and Neoliberalism: The Regulation
Journal 1784. of Economic Concentration in Brazil’ (2016) 07 Direito & Práxis 643).
53 59
César Mattos, A Revolução Do Antitruste No Brasil: Teoria Econômica Aplicada Brazil, Lei No 12,529, de 30 de novembro de 2011, art 36, § 1.
60
a Casos Concretos (Editora Singular 2003) 20 (arguing that since the 1990s there Brazil, Lei No 12,529, de 30 de novembro de 2011, art 90.
61
has been an "antitrust revolution" in Brazil, insofar as during this period there For an insightful analysis of these cases, see Camila C Pires-Alves and
has been "the introduction of a more sophisticated economic analysis of anti­ others, ‘Conduct Analysis in Digital Cases: A Review of the Brazilian Antitrust
trust in Brazil and its growing and decisive influence on important concrete Authority Decisions’, in Antitrust and the Digital Economy: Legal Standards, Pre­
cases adjudicated by CADE"). sumptions and Key Challenges (Institute of Competition Law 2023) 280–282.

6
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

Shopping page.62 The other two cases entailed more complex discus­ establishing the anticompetitive effects of unilateral conduct. The
sions regarding the anticompetitive effects stemming from product reporting vote referred to the theories of tying and vertical foreclosure,70
design choices. which entailed the application of more rigorous legal tests for assessing
The second one was the Google AdWords case, 63 which originated the anticompetitive effects of such conduct. The dissenting votes, on the
from a complaint filed by Microsoft Corporation. In this case, CADE other hand, showed a different interpretation of the meaning of “self-
investigated whether Google’s amendment to the Terms and Conditions preferencing” as a new independent theory of harm for digital markets.
of Use for the Google AdWords API resulted in hindering the interop­ In his vote, for instance, Commissioner Paulo Burnier da Silveira
erability of advertising campaign data from AdWords with competitor emphasized that the Google platform does not have the traditional
platforms, specifically Microsoft’s AdBing. CADE’s Tribunal reached a indispensability characteristic as defined by the essential facilities doc­
unanimous decision, stating that there was no evidence that Google’s trine, but functions as an “internet gateway with significant effects that
practices led to anticompetitive effects. Although it was not clear which warrant special consideration under competition law”.71 Similarly,
theory of harm was considered in the Reporting Commissioner’s Commissioner Paula Azevedo Silveira’s opinion emphasized the need to
opinion, it noted that “the mere existence of third-party platforms that shift the burden of proof for establishing the effects of self-referencing
facilitate the simultaneous management of advertising campaigns be­ practices in digital platforms.72 Also Commissioner João Paulo
tween the AdWords platform and competing platforms would be suffi­ Resende’s opinion held that the conduct prevented the growth of
cient to disqualify the infringement”.64 The Reporting Commissioner’s competing sites’ traffic in the same proportion as the growth of Google
opinion also has affirmed that access to the AdWords API could not be Shopping’s traffic.73
considered an "essential facility".65 This remark might suggest that the In addition to the cases where CADE has reached a final judgment
CADE’s Tribunal indeed adopted a legal test of indispensability for against Big Tech companies, there are five ongoing investigations in the
assessing the conduct.66 preliminary stages. In each of these cases, CADE’s General Superin­
Finally, the latest and notable case revolved around Google Shop­ tendence has yet to issue its Final Opinion - a necessary step before the
ping’s practice of self-preferencing,67 which bears striking resemblance case can advance to CADE’s Tribunal for a judgment. Most of these in­
to the European Commission’s investigation. The resolution of the case vestigations mirror facts scrutinized by the European Commission. For
occurred through a disqualification vote cast by the president of the example, the fourth investigation concerning Google addresses the same
CADE, subsequent to the Court’s failure to reach a majority decision issues raised in the Google Android case.74 Similarly, in the so-called
with a tied vote of 3 to 3. The prevailing viewpoint among the Com­ Jedi Blue case, Google is under investigation for allegedly colluding
missioners considered that there was insufficient evidence to support with Meta in online display advertising.75 The only case that seems not
that the self-preferencing practice had a significant impact the direction to have an EU counterpart is the Google News investigation,76 in which
of users from Google Search to Google Shopping pages.68 The reporting CADE probes whether Google engaged in “scraping” journalistic content
opinion of Commissioner Bandeira Maia also asserted if CADE’s decision to improve its Google News service.
incurred in a false positive that "would represent a high chilling effect on Moreover, in 2022, CADE initiated another investigation against
competition in a highly pulsating sector, as the Google’s PLA is an Apple concerning alleged abusive terms and conditions imposed by
innovation".69 Apple Store to app distributors. This latest inquiry focuses on facts
In the Google Shopping case, the dividing line between the opposing extensively examined by other foreign authorities, such as Apple’s
opinions in the Google Self-preferencing case stems primarily from imposition of its own in-app purchase payment technology on music
different perspectives on the allocation of the burden of proof in streaming app developers (the ‘IAP obligation’).77 These ongoing cases
reflect the growing global focus on Big Tech companies’ practices and
highlight the challenges Brazilian authorities face in keeping pace with
international antitrust investigations in the digital domain. The chart
below summarizes the timeline of all completed and ongoing CADE
cases against big tech companies.
Timeframe of CADE’s cases against Big Techs

62
E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e
70
Google Brasil Internet Ltda [2019] CADE Processo Administrativo no E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e
08700.009082/2013-03, (Commissioner Vilanova P). Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº
63
CADE ex officio vs. Google Inc. e Google Brasil Internet Ltda [2019] CADE 08012.010483/2011-94 SEI no. 0632170 [383]-[386] (Commissioner Maia M).
71
Processo Administrativo no 08700.005694/2013-19. E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e
64
CADE ex officio vs. Google Inc. e Google Brasil Internet Ltda [2019] CADE Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº
Processo Administrativo no 08700.005694/2013-19 SEI no. 0628841 [115] 08012.010483/2011-94 SEI no. 0632417 [22] (Commissioner Burnier da Sil­
(Commissioner Maia M). veira P).
65 72
CADE ex officio vs. Google Inc. e Google Brasil Internet Ltda [2019] CADE E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e
Processo Administrativo no 08700.005694/2013-19 SEI no. 0628841 [221] Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº
(Commissioner Maia M). 08012.010483/2011-94 SEI no. 0632417 [143] (Commissioner Azevedo Sil­
66
Victor Oliveira Fernandes, Direito Da Concorrência Das Plataformas Digitais: veira P).
73
Entre Abuso de Poder Econômico e Inovação (Revista dos Tribunais 2022) 336. E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e
67
E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº
Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº 08012.010483/2011-94 SEI no. 0632473 [50] (Commissioner Resende J).
74
08012.010483/2011-94 CADE ex officio vs. Google Inc. e Google Brasil Internet Ltda [2019] CADE
68
E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e Inquérito Administrativo no 08700.002940/2019-76
75
Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº CADE ex officio vs. Google Inc., Google Brasil Internet Ltda, Meta Inc. e
08012.010483/2011-94 SEI no. 0632170 [420]-[423] (Commissioner Maia M). Facebook Serviços Online do Brasil Ltda. [2022] CADE Inquérito Admin­
69
E-Commerce Media Group Informação e Tecnologia Ltda vs. Google Inc. e istrativo no 08700.009531/2022-04
76
Google Brasil Internet Ltda [2019] CADE Processo Administrativo nº CADE ex officio vs. Google Inc. e Google Brasil Internet Ltda [2019] CADE
08012.010483/2011-94 SEI no. 0632170 [577] (Commissioner Maia M). Inquérito Administrativo no 08700.009531/2022-04
77
Ebazar.Com.br.Ltda. e Mercado Pago Instituição de Pagamento Ltda. vs.
Apple Inc. e Apple Computer Brasil Ltda. [2022] CADE Inquérito Admin­
istrativo no 08700.009531/2022-04.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

Case File No. Opening of Theory of harm Final opinion by the CADE’s Tribunal Total length of the
investigation General Superintendence Final Decision investigation

Google 08,700.009082/ October 10, Undue appropriation of third-party reviews May 11, 2018 Dismissed on 5 years, 8 months
Scraping 2013–03 2013 June 19, 2019
Google 08,700.005694/ June 28, 2013 Impediments to interoperability in Google May 11, 2018 Dismissed on 5 years, 11 months
AdWords 2013–19 AdWords campaigns June 19, 2019
Google 08,012.010483/ December 20, Self-preferencing/discrimination in Google November 20, 2018 Dismissed on 7 years, 6 months
Shopping 2011–94 2011 Search results June 19, 2019
Google 08,700.002940/ June 5, 2019 Tying of Google of Google’s search and browser – –
Android 2019–76 apps in licensing Google’s app store
Google News 08,700.003498/ July 9, 2019 Undue appropriation of third-party news – –
2019–03
Jedi Blue 08,700.006751/ September 3, Agreement to special conditions in ad auctions – –
2022–78 2022 in exchange for a non-competitive stance in the
online advertising market.
Mercado 08,700.009531/ December 6, Abusive terms and conditions in the in the – –
Livre vs. 2022–04 2022 market for the distribution of applications for
Apple iOS devices

quarantine".82
In recent years, following the Google saga, CADE’s enforcement ef­ In undertaking a comprehensive analysis of CADE’s strategies in
forts have primarily targeted most-favored-nation and exclusivity clau­ digital markets, it becomes imperative to critically evaluate whether the
ses adopted by some regional dominant platforms. Explaining this factors catalyzing the European Commission’s transition to a regulatory-
specific focus can be challenging, but it likely stems from the fact that focused antitrust paradigm are similarly influencing Brazil.
the theories of harm involved are more clear in these cases, particularly From a procedural perspective, investigations conducted by CADE in
regarding market foreclosure through exclusive dealings. In two recent digital markets are notably lengthier compared to those of the European
cases, CADE settled cease-and-desist agreements with undertakings in Commission. For instance, the Google Shopping inquiry spanned
the sector for the intermediation of fitness studies (Gympass Case)78 and roughly 8 years before a final decision was reached. Within this period,
online food delivery (iFood Case).79 The reasoning underlying the Google implemented at least two significant modifications to its search
commitments imposed in both cases suggest that CADE adopted a engine design. Similarly, in the Google AdWords case, the focus of the
balancing rule-of-reason approach. investigation was the Terms and Conditions of the AdWords API released
In both cases, CADE’s analysis pondered the volume of the market in 2011. Nevertheless, just a few months after CADE’s investigation
affected by the exclusive agreements, the duration of such contracts, and began; Google reached a settlement with the Federal Trade Commission
the conditions under which such clauses could be renewed.80 The set­ (FTC) in 2013 that induced several modifications on these API terms.83
tlement agreement approved by CADE in the Gympass case comprised Upon the conclusion of the Brazilian case by CADE in 2019, the analysis
three primary provisions. Initially, it imposed a constraint on exclusivity of the effects of the previous version of the terms and conditions proved
contracts with fitness centers, stipulating that such agreements could not to be challenging.
exceed 20 % of the total number of gyms within a given city. Further­ The extended duration of these proceedings is not exclusive to digital
more, the agreement includes provisions that restrict the use of most- markets investigations but is indicative of a wider trend in CADE’s
favored-nation (MFN) price parity clauses and quarantine clauses. On approach to abuse of dominance cases. As underscored in the OECD’s
top of that, it is imperative that authorized exclusivity agreements be 2019 review of Brazilian Competition Law and Policy, CADE has his­
associated with the provision of a minimum volume guarantee to the torically given priority to cartel investigations, often sidelining cases
gyms and adhere to a maximum duration of two years.81 In the case of involving abuse of dominance.84 In an effort to rectify this imbalance,
iFood, the restrictions imposed by CADE relate to three key aspects. CADE’s General Superintendence formed a specialized unit in 2022
First, iFood may not enter into exclusive agreements with restaurant focusing solely on unilateral conduct. However, the tangible impacts of
chains that have more than 30 outlets in Brazil. Second, the exclusivity this organizational change are anticipated to unfold gradually.
agreements may not exceed 20 % of the total sales made on the platform In order to avoid these prolonged investigations, CADE has increas­
nationally and 8 % of this volume per city. Third, the duration of ex­ ingly relied on interim measures and settlement agreements as essential
clusivity agreements cannot exceed two years, after which restaurants tools to expedite the resolution of antitrust cases. These measures,
cannot be subject to new exclusivity clauses for a period of "exclusivity notably implemented in the Gympass and iFood cases, represent CADE’s
effort to deliver timely interventions. In these two cases, shortly after

78
GPBR Participações Ltda. (“Gympass”) [2022] CADE Requerimento de TCC
82
no. 08700.006611/2021-19. Beatriz Kira, ‘Is IFood Starving the Market? Antitrust Enforcement in the
79
iFood.com Agência de Restaurantes Online S.A. (“iFood”) [2023] CADE Market for Online Food Delivery in Brazil’ (2023) 46 World Competition Law
Settlement No. 08700.005597/2022-17. and Economics Review 133, 150–156 (explaining both CADE’s analysis and the
80
See also GPBR Participações Ltda. (“Gympass”) [2022] CADE Requerimento terms of the settlement agreement in iFood case)
83
de TCC no. 08700.006611/2021-19, Nota Técnica da Superintendência Geral Federal Trade Commission, ’Statement of the Federal Trade Commission
do CADE no. 39/2022. Regarding Google’s Search Practices In the Matter of Google Inc.’ (3 January
81
GPBR Participações Ltda. (“Gympass”) [2022] CADE Requerimento de TCC 2013) https://www.ftc.gov/sites/default/files/documents/public_state
no. 08700.006611/2021-19, Nota Técnica da Superintendência Geral do CADE ments/statement-commission-regarding-googles-search-practices/130103brillg
no. 39/2022. ooglesearchstmt.pdf.
84
Organisation for Economic Co-operation and Development, ‘OECD Peer
Reviews of Competition Law and Policy: Brazil’ (OECD Publishing, 2019) 184
163 <www.oecd.org/daf/competition/oecd-peer-reviews-of-competition-law
-and- policy-brazil-2019.htm>.

8
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

initiating investigations, CADE’s General Superintendence imposed Brazilian competition policy under the existing "antitrust enterprise"88
prohibitions on new exclusivity agreements until final rulings were framework. In light of this situation, it seems preferable for Brazil to
made. Nevertheless, while these interim measures effectively maintain adopt a new, supplementary regulatory legislation specifically tailored
the status quo in the affected markets, their potential to rectify existing for digital platforms. This would avoid extended discussions on the best
market imbalances, particularly in dynamic markets prone to rapid legal standards for abuse of dominance. Additionally, new regulatory
shifts, remains a subject of debate. Furthermore, the reliance on settle­ legislation could provide clear guidelines and criteria for assessing the
ment agreements, although expediting case closure, has raised concerns behavior of dominant players in the digital market, ensuring more
about the scarcity of legal precedents that could provide clearer guide­ efficient and effective enforcement of competition law.
lines for unilateral practices.85
Concerning the substantive limitations within Brazilian competition 3. A comparative analysis of the EU DMA and Brazil’s proposal
law, CADE has faced significant challenges in defining explicit theories
of harm, as particularly demonstrated in the Google Shopping and The legislative proposal PL 2768 was formally before the Brazilian
Google AdWord rulings. These cases exposed a pronounced divergence Congress as a bill that focuses on "the organization, functioning and
in the perspectives of the Commissioners, notably regarding the imple­ operation of platforms that provide services to the Brazilian pop­
mentation of the "essential facilities" doctrine. The prevailing viewpoints ulation".89It explicitly emerges against the backdrop of global discus­
suggested favoring the "indispensability test" for instances of digital self- sions regarding the adequacy of competition policy to address anti-
preferencing. This approach implies that CADE is cautious about stray­ competitive practices by major technology platforms. In the explana­
ing from its traditional ’rule of reason’ approach, even when navigating tory memorandum accompanying the proposal, Congressman João Maia
the complexities of digital market dynamics.86 Additionally, it seems refers to authoritative academic sources and influential policy docu­
that the apprehension of arriving at false positive conclusions substan­ ments, such as Tim Wu’s "The Curse of Bigness"90 and a U.S. Congres­
tially influenced the decision-making of some Commissioners in these sional report,91 and unambiguously suggests Brazil should adopt a
Google cases, further underlining the conservative nature of CADE’s regulatory approach aligned with the European Union’s recently enac­
approach in these nuanced and evolving market scenarios.87 ted DMA.92 While Congressman Maia eventually also advocates a less
The conclusion of this section necessitates a nuanced understanding exhaustive approach than the DMA model, comprehensive analysis
of how the "more economic approach" influences the justification for ex- identifying precise areas of convergence and divergence remains
ante regulation, particularly when comparing developments in the Eu­ imperative.
ropean Union and Brazil. In both jurisdictions, the "more economic This subsection 2.3 intends to undertake an extensively neutral
approach" seems indeed to present some challenges for antitrust comparative examination of core dimensions of the DMA contrasted
enforcement in the digital sector. However, the context and trajectory of with key aspects of Brazil’s draft legislation PL 2768/2022. This sys­
aligning with this approach differ significantly in both scenarios. In the tematic analysis seeks to illuminate substantial commonalities and
EU, the efforts to align with the "more economic approach" in the salient divergences between both regulatory approaches targeting major
beginning of the 2000s represented a regulatory policy decision of the digital platforms. It will evaluate pivotal issues including the normative
Commission, marking a departure from its earlier formalistic approach. underpinnings, scope of covered entities, obligations and enforcement
A gradual and unique approach based on the legal classification of abuse protocols delineated, and crucial institutional design choices within
of dominance practices has so far characterized this shift. Recently, the each legal instrument. Methodically juxtaposing these key facets aims to
Commission has initiated the adoption of new guidelines to modify and objectively reveal precise regulatory formulations and calibrations that
enhance their approach in addressing the distinctive challenges posed may enable or constrain efficacy in addressing economic and social
by digital markets. Conversely, in Brazil, the legal system based on civil challenges posed by technology giants.
law encourages a deeper analysis of the legislative intention behind the While this section focuses on objectively identifying areas of
Competition Act of 2011. The notion that the Brazilian legislator convergence and divergence, the ensuing discussion in Section 3 will
intentionally conformed to the established principles of antitrust eco­ delve deeper into assessing how lessons from the DMA could help
nomic thought cannot be easily disregarded, particularly in light of the strengthen the Brazilian proposal and examine adaptability of the Eu­
inclusion of the "as-efficient competitor" principle in section 36(1). This ropean regulatory paradigm given Brazil’s unique institutional struc­
law can be seen as a deliberate legislative action aimed at aligning the tures. This comparative mapping intends to provide vital factual
antitrust regime more closely with the orthodox economics of U.S. grounding to enrich forthcoming debates on optimizing and contextu­
antitrust law. Furthermore, while certain decisions made by CADE in the alizing the draft legislation to ensure balanced and nimble oversight
past have been consistent with form-based strategies for addressing attuned to Brazilian digital market dynamics.
unilateral practices in particular industries, the limited number of final
decisions regarding unilateral practices in digital markets seem to be
more in line with an “effects-based approach”. 3.1. Contrasting normative perspectives: fairness, contestability and
These factors suggest that it would be very complex to recast Brazil’s constitutional principles

The DMA was enacted largely in response to concerns over the

85
ibid 165. economic power accumulated by large platforms that control digital
86
Dario da Silva Oliveira Neto, Otávio Augusto de Oliveira Cruz Filho and
Alexandre Cordeiro Macedo, ‘The Rule of Reason and the Fundamentals against
88
More Presumption-Based Illegality Legal Standards : Highlights on CADE’ s Herbert J Hovenkamp, The Antitrust Enterprise: Principle and Execution
Decisions on Digital Economy Issues’ (2023) 0 Journal of Antitrust Enforcement (Harvard University Press 2013).
89
1. (maintaining that CADE has not shifted from using the rule of reason to a PL 2768/2022, art 1.
90
more presumption-based illegality approach in analyzing abuse of dominance Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age (Columbia
in digital markets). Global Reports 2018).
87 91
Pires-Alves and others (n 61) 289 (observing that "in the Google Shopping U.S. House of Representatives. Subcommittee on Antitrust, ‘Investigation of
case, the majority report by Commissioner Bandeira Maia clearly stands with Competition in Digital Markets. Majority Staff Report and Recommendations’
the Easterbrook hypothesis that the costs of a possible false conviction would (2020) 1.
92
generate more harm to consumers and competition than a false acquittal") Congressman João Maia, ’Explanatory Memorandum to PL 2768/2022′ (10
November 2022) https://www.camara.leg.br/proposicoesWeb/fichadetramita
cao?idProposicao=2337417.

9
V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

ecosystems (referred to as "gatekeepers"). Specifically, the DMA aims to sharing).101 Fairness requires intervention to address the imbalance of
address three interrelated issues posed by these dominant platforms. bargaining power between large platforms and business users rights and
First, a small number of large undertakings providing core platform obligations.102 From an economic perspective, gatekeeper’s business
services have amassed considerable economic strength, enabling them practices are unfair when they prevent business users from realizing the
to leverage advantages across areas of activity.93 These gatekeepers full value of their contributions to social welfare within the digital
exercise control over whole digital ecosystems and are difficult to ecosystem.103
challenge. Second, they create barriers to entry and exit, reducing Contestability and fairness are interrelated concepts under the
contestability in digital markets, hampering innovation and consumer DMA,104 and both can share elements of the ordoliberal concept of
choice.94 Third, the imbalance in bargaining power enables gatekeepers equality of opportunity stemming from the notion that the system of
to engage in unfair practices impacting businesses and consumers, competition must be preserved within the very structure of markets.105
harming prices, quality, and fair competition.95 It can be argued that, under a competition policy lens, the DMA’s twin
Considering these economic complexities and market dynamics, the goals are to proactively facilitate inter-platform competition through the
DMA assumes that the existing rules under the EU Competition Law contestability approach and to promote intra-platform competition
would hardly be sufficient to adequately address issues posed by gate­ through the fairness approach.106
keepers. As stated in Recital 5, “although Articles 101 and 102 of the Unlike the DMA, Brazil’s legislative proposal PL 2768 does not
Treaty on the Functioning of the European Union (TFEU) apply to the provide extensive considerations on its normative premises, nor does it
conduct of gatekeepers, the scope of those provisions is limited to certain elucidate its relationship with existing competition law. The bill pri­
instances of market power…and enforcement occurs ex post and re­ marily focuses on "the organization, functioning, and operation of
quires an extensive investigation of often very complex facts on a case by platforms that provide services to the Brazilian population".107 Article 2
case basis.”96 of the proposal adopts a language resonating a public utilities regula­
In this regard, the new EU legislation departs from the traditional tion. ,108 as it grants the federal government, specifically the National
antitrust economic focus on efficiency.97 Some authors also highlight a Telecommunications Agency (ANATEL), the regulatory authority to
shift from the "outcome-oriented" approach of the consumer welfare “supervise the activities of digital platforms within the territorial juris­
standard to a broader concept of protecting the competition process or diction of Brazil”. Article 3 of the General Telecommunications Law
other complementary legal values.98 In this regard, Recital 11 makes it (Law 9472) introduces an amendment that expands ANATEL’s regula­
clear that, unlike competition law which focuses on anticompetitive tory authority. This amendment grants the agency the legal power to
effects of abusive conduct, the DMA’s focus is not merely to repress "issue regulations" regarding the operation of digital platforms.109 At a
infringing behaviors that reduce consumer welfare. As stated in the first glance, it suggests that the Brazilian legislator has positioned the
recital, "[the DMA] pursues an objective that is complementary to, but proposal as an enhancement of the existing telecommunications regu­
different from that of protecting undistorted competition on any given latory system.
market, as defined in competition-law terms."99 The DMA’s objective is Regarding the objectives and guiding principles of the regulation, the
to ensure that "markets where gatekeepers are present are and remain Brazilian proposal mentions several constitutional concepts that go
contestable and fair," that Thus, the DMA protects a different legal in­ beyond the scope of undistorted competition. The provisions outlined in
terest than that protected by traditional competition rules and applies Articles 4 and 5 of PL 2768 bear a remarkable resemblance to the
without prejudice to their application. "Principles of Economic Order" set forth in Article 170 of the Brazilian
These fundamental normative principles underpin the DMA: con­ Federal Constitution.110 Article 4 of the legislation incorporates non-
testability and fairness. Contestability entails addressing large platform economic normative principles, including but not limited to "freedom
practices or structures that somehow contribute to the high barriers to of initiative, open competition, consumer protection, and the reduction
entry in digital markets.100 Ensuring contestability means leveling the of regional and social inequalities," to guide the implementation of the
playing field between gatekeepers and business users, which can be legislation.111
achieved through measures that facilitate market entry on the demand In addition, the legislation demonstrates a commitment to upholding
side (interoperability and multi-homing), or on the supply side (data the values, principles, and aspirations outlined in the Marco Civil da
Internet (Law 12,965/2014),112 which establishes a comprehensive

93
DMA, recital 3.
94 101
Id. Alexandre de Streel, ‘DMA Compass’, Effective and Proportionate Imple­
95
DMA, recital 5. mentation of the DMA (Centre on Regulation in Europe (CERRE) 2023) 30.
96 102
DMA, recital 5. DMA, recital 33 (“unfairness should relate to an imbalance between the
97
DMA, recital 23 (“any justification on economic grounds seeking to enter rights and obligations of business users where the gatekeeper obtains a
into market definition or to demonstrate efficiencies deriving from a specific disproportionate advantage. […]”).
103
type of behavior by the undertaking providing core platform services should be Jacques Crémer and others, ‘Fairness and Contestability in the Digital
discarded, as it is not relevant to the designation as a gatekeeper”). Markets Act’ [2021] Yale Tobin Center for Economic Policy Policy Discussion
98
Elias Deutscher, ‘Reshaping Digital Competition: The New Platform Regu­ Paper No. 3 1, 10 ("our definition of fairness reflects this by stating that users
lations and the Future of Modern Antitrust’ (2022) 67 Antitrust Bulletin 302, should ’reap the just rewards for their contributions to economic and social
315 ("instead of focusing on consumer welfare as their primary or exclusive welfare.’ The platform is a co-creation of the platform itself and its users, who
goal, the new platform regulations identify several policy goals") and Anca should not bear the brunt of their limited bargaining power").
104
Daniela Chirita, ‘Data-Driven Unfair Competition in Digital Markets’ (2023) 29 DMA, recital 34.
105
SSRN Electronic Journal 1, 4–5. Niamh Dunne, ‘Fairness and the Challenge of Making Markets Work Better’
99
DMA, recital 5. (2021) 84 The Modern Law Review 230, 236.
100 106
DMA, recital 32 (“contestability should relate to the ability of undertakings Friso Bostoen, ‘Understanding the Digital Markets Act’ (2023) 68 Antitrust
to effectively overcome barriers to entry and expansion and challenge the Bulletin 263, 280.
107
gatekeeper on the merits of their products and services. […]”). PL 2768/2022, art 1.
108
PL 2768/2022, art 2.
109
PL 2768/2022, art 3.
110
Constitution of the Federative Republic of Brazil 1988, art 170.
111
PL 2,768/2022, art 4.
112
Marco Civil da Internet, Law No 12.965 of 23 April 2014 (Brazil).

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

framework of fundamental rights for the Internet in Brazil. Article 5 thresholds. Nevertheless, as explained in Recital 23, the burden of proof
outlines the aspirations of the proposed regulation, which include ob­ is on the undertaking to show that the presumption of compliance with
jectives such as promoting fair competition among market participants, the quantitative thresholds should not apply. In this assessment, the
facilitating access to information and culture, encouraging innovation, Commission is advised to take into account only factors directly linked
and promoting open technology standards to ensure interoperability.113 to the quantitative criteria.121 This implies that quantitative criteria may
As will be discussed later in this article, the Brazilian proposal does hold greater relevance in light of the consciously high standards of proof
not delve into the nuances of the concept of “fair competition”. It re­ required for rebuttal.122
mains unclear whether the legislation encompasses objectives analogous In keeping with an asymmetrical regulatory framework, the Brazil­
to the DMA’s “contestability” and “fairness”. The absence of detailed ian proposal specifically targets digital platforms in a list of sectors and
elucidation of these principles leaves room for interpretation and poses with some significant economic size. Article 6(2) of the proposed
questions about the law’s capacity to address the complexities of digital regulation defines the specific categories of business models that fall
market competition effectively. within its scope.123 These include online intermediation services, search
engines, social networks, video sharing platforms, interpersonal
communication services, operating systems, cloud computing services
3.2. Defining the regulated entities: gatekeepers, platforms and power and online advertising services. The language used in Article 6 lacks
asymmetries technical precision, as it defines "platforms" as "Internet applications" in
Article 6(2), without explicitly recognizing the different business models
The key point of convergence between the Brazilian legislative pro­ that may change because of strategic decisions.
posal and international ex-ante legislations such as the DMA lies in their Article 9 of the law introduces a key regulatory concept, that of
regulatory enforcement strategy. Under the DMA, the rules of the new digital platforms with "significant access control power".124 This concept
regime are specifically applicable to a limited set of entities classified as is remarkably similar to the notion of a "gatekeeper". The designation
"Gatekeepers." In order for an undertaking to be classified as a gate­ applies to companies that fall under one of the business models outlined
keeper, it must satisfy two requirements as outlined in the DMA. Firstly, in Article 6(2) and have annual gross revenues in excess of BRL 70
it is necessary to operate one or more of the core platform services million in Brazil. Specific details and criteria for such categorization will
associated with the following activities: “(a) online intermediation ser­ be further elaborated in the forthcoming regulations issued by ANATEL.
vices; (b) online search engines; (c) online social networking services; The draft and its explanatory memorandum lack a comprehensive
(d) video-sharing platform services; (e) number-independent interper­ definition of the term "significant access control power". They also do
sonal communications services; (f) operating systems; (g) web browsers; not clarify whether companies must comply with ex ante obligations in
(h) virtual assistants; (i) cloud computing services; (j) online advertising all markets in which they operate, or only in those that fall within the
services.” (Article 2(2).114 The Commission needs to conduct a market scope of the new legislation. In addition, there is no proceeding for
investigation before expanding the scope of core platform services companies to rebut their designation. This means that the provisions of
subject to regulation to other platforms activities.115 PL 2768 will be immediately applicable to large platforms meeting the
Second, the undertaking must meet some qualitative and quantitive quantitative threshold.
conditions. The qualitative criteria for designating an entity as a gate­
keeper are laid out in Article 3(1). An undertaking shall be designated a
gatekeeper if it "(a) has a significant impact on the internal market; (b) 3.3. Obligations, remedies and enforcement strategies
provides a core platform service which is an important gateway for
business users to reach end users; and (c) enjoys an entrenched and The DMA structures the lists of substantive obligations for the
durable position"116 in its operations or is foreseeably likely to in the gatekeepers into two distinct groups, as defined in Articles 5 and 6.
near future. Article 3(2) establishes quantitative thresholds that lead to a Article 5 delineates seven specific obligations, bifurcated into four
"presumption" of gatekeeper status if met. These include: annual EU prohibitions and three prescriptions. These self-executing obligations
turnover above €7.5 billion or market capitalization above €75 billion are designed to be self-applicable to the gatekeepers, without the need
(Article 3(2)(a)) ;117 at least 45 million monthly active EU users and for further specifications. In contrast, Article 6 encompasses eleven
10,000 yearly active EU business users of its core platform services obligations, with three prohibitions and eight prescriptions. These ob­
(Article 3(2)(b))118 and meeting the user and turnover/market cap ligations, while directly applicable, are unique in their susceptibility to
thresholds for three consecutive years (Article 3(2)(c)).119 further specification, reflecting the complex and evolving nature of the
The quantitative thresholds serve as a proxy indicating the entity digital market landscape. This distinctive setup of the DMA aims to
likely satisfies the qualitative criteria of having significant market allow for adaptability and precision in addressing the nuances of digital
impact, being an important business gateway, and holding an market operations.
entrenched position. The DMA also implies that “an entrenched and The obligations outlined in the DMA can be perceived as new forms
durable position in its operations or the foreseeability of enjoying such a of behavior remedies for preventing competition harms.125 In the aca­
position in the future occurs notably where the contestability of the demic discourse, there is a diversity of approaches attempting to sys­
position of the undertaking providing the core platform service is tematize the DMA’s lists of obligations. Some authors focus on
limited.”120
The undertaking may rebut the presumption derived from the
quantitative criteria by demonstrating that it does not meet the sub­ 121
DMA, recital 23.
stantive criteria set out in Article 3(1), even if it exceeds the quantitative 122
Amelia Fletcher and others, ‘The Effective Use of Economics in the EU
Digital Markets Act’ [2023] Policy Discussion Paper No. 8, Digital Regulation
Project, Yale Tobin Center for Economic Policy 1, 11;Natalia Moreno Belloso
113
PL 2,768/2022, art 5. and Nicolas Petit, ‘The EU Digital Markets Act (DMA): A Competition Hand in a
114
DMA, art 2(2). Regulatory Glove’ [2023] Avalible at SSRN Electronic Journal. Forthcoming in
115
DMA, art 19(1). the European Law Review 1, 10 (“the DMA contains language that places a
116
DMA, art 3(1). heavy burden on the notifying firm to convince the Commission of investigating
117
DMA, art 3(2)(a) a possible disapplication of the presumption”);
118 123
DMA, art 3(2)(b). PL 2,768/2022, art 6(2).
119 124
DMA, art 3(2)(c). PL 2,768/2022, art 9.
120 125
DMA, recital 21. Larouche and De Streel (n 4) 550.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

systematizing the obligations considering whether they are “positive” or imposition of “anti-steering” echo the ongoing discussions in Apple
“negative” .126 For the purposes of our analysis, it is particularly cases.135
instructive to focus on classifications that concentrate on how the obli­ To ensure effective compliance, the Commission regularly reviews
gations aligns with the goals of the DMA. Noteworthy among these is the the remedies imposed on gatekeepers (Article 8). It has the power to
categorization proposed by Belloso and Petit127 distinguishing obliga­ modify these remedies if they are found to be ineffective following a new
tions based on their impact on exclusionary practices in inter-platform, market investigation. The regulation also emphasizes the importance of
intra-platform, and extra-platform relations. transparency and public access to information. Gatekeepers are required
Sticking in the first two groups, one can see that certain obligations to publish non-confidential summaries of their reports, allowing third
aim to enhance competition and contestability across different digital parties to assess their compliance with the obligations (Article 11(2)).
ecosystems, focusing on inter-ecosystem or inter-platform dynamics. The Commission, in turn, publishes links to these summaries and other
This aspect of the DMA seeks to stimulate competitive interactions be­ relevant public information online, ensuring accessibility (Article 10). In
tween gatekeepers and other digital service providers, facilitating a cases where a gatekeeper systematically fails to comply with multiple
more open and competitive digital market. For instance, Article 5(3) obligations or frustrates the objectives of the regulation, the Commission
prohibits parity clauses that restrict business users from offering better may investigate whether additional behavioral or structural remedies
terms on other platforms,128 and Article 5(4) bans anti-steering pro­ are necessary to address the issue (Article 75)
visions that limit business users’ interactions with end users outside the While the DMA delves into detailed categorizations of obligations,
gatekeeper’s platform.129 These provisions are underpinned by the addressing various facets of digital market dynamics, the Brazilian
principle of ensuring market contestability through measures like pro­ proposal opts for a more concise framework outlined in Article 10.
moting multi-homing, lowering entry barriers, and increasing However, instead of providing a comprehensive list of obligations, this
transparency.130 article only presents four basic principles. The explanatory memoran­
Conversely, other obligations in the DMA concentrate on intra- dum by Congressman João Maia articulates a deliberate choice to refrain
ecosystem or intra-platform competition, where the focus is on the in­ from formulating a comprehensive set of rules. The legislator’s
teractions within a single digital platform’s ecosystem. This approach is explained it aimed to create “a legal structure similar to that of the
predicated on the belief that the power of gatekeepers, coupled with European Commission, but with less emphasis on meticulous details”.136
their potential for vertical integration, can lead to exclusionary and He argued that it would be wise to have a less extensive set of ex-ante
unfair practices against their business users. To counteract this, the DMA measures, given the digital markets are deeply dynamic.
imposes restrictions to prevent gatekeepers from exploiting their Article 10 concisely set only four general obligations. The first con­
dominant position unfairly. Notable examples include Article 6(2), cerns the commitment to "transparency and the provision of information
which prohibits the misuse of business users’ data by gatekeepers,131 to ANATEL".137 The second requires the fair, isonomic and non-
and Article 6(5), which ensures equitable ranking of third-party prod­ discriminatory provision of services to both business and end-users.138
ucts alongside those of the gatekeeper.132 Additionally, Article 6(7) The third is that digital platforms must ensure “the proper usage of data
mandates effective interoperability with the gatekeeper’s proprietary in its commercial activities”.139 The fourth obligation prohibit platforms
services, aiming to level the playing field and foster fairness within the of refusing to contract with business users.140 The last section of this
digital platform’s ecosystem.133 These measures collectively seek to article designates ANATEL to supervise the enforcement of the obliga­
balance the market power of gatekeepers, ensuring fairness and pre­ tions related to accounting and functional separation.141 In addition, the
venting anti-competitive practices in the rapidly evolving digital final paragraph of Article 10 provides that, to mitigate potential abuse of
domain. economic power, ANATEL may impose accounting and functional sep­
One cannot deny that most of the DMA’s substantive obligations are aration obligations, as well as measures, including those related to data
somehow related to past or ongoing antitrust investigations against portability and interoperability.
digital platforms at the EU and national levels.134 The prohibition for Article 11 sets forth the guiding principles that ANATEL shall follow
gatekeepers to treat the products/services they themselves offer more in implementing the obligations of Article 10.142 These principles
favorably than similar services offered by third-parties (Article 6(5) include:(I) the adoption of a technical, fair, and non-arbitrary basis; (II)
DMA), for example, closely resembles the Google Shopping case. Simi­ the imposition of specific obligations for each type of digital platform,
larly, the prohibition to use non-publicly available data (Article 6(2) taking into account its unique characteristics; (III) intervention that is
DMA) coincides with the Amazon investigations, in which the Com­ proportionate to the existing risk; (IV) an evaluation of the impact, costs,
mission assesses Amazon’s use of non-publicly available independent and benefits of the regulations; and (V) consideration of the level of
seller data. Furthermore, articles 5(4) and 5(5) prohibitions on the competition in the provision of each type of digital platform.
The fourth group of provisions refers to institutional design of the
proposal. There are several provisions that outline the powers of ANA­
126 TEL, as well as its interactions with other regulatory frameworks. Ac­
In that regard, see as Botta (n 9); Bostoen, ‘Understanding the Digital
cording to Article 16, ANATEL is empowered to impose various
Markets Act’ (n 106).
127
Belloso and Petit (n 122) 13–22.
sanctions on companies that violate the ex-ante measures outlined in
128
DMA, art 5(3). Article 10.143 The least severe sanctions include admonitions and fines,
129
DMA, art 5(4).
130
Pınar Akman, ‘Regulating Competition in Digital Platform Markets: A
Critical Assessment of the Framework and Approach of the EU Digital Markets
135
Act’ (2022) 47 European Law Review 85, 93. Belle Beems, Johan Van De Gronden and Catalin Rusu, ‘The Added Value of
131
DMA, art 6(2). the DMA’s Enforcement Framework’ (2023) 15 The Competition Law Review
132
DMA, art 6(5). 51, 57–58.
133 136
DMA, art 6(7). ’Explanatory Memorandum to PL 2768/2022′, p 9.
134 137
For instance, see European Commission (n 20) 53–60. (provides a table that PL 2,768/2022, art 10 (1).
138
correlates the obligations of articles 5 and 6 of the DMA with antitrust cases PL 2,768/2022, art 10 (2).
139
decided or pending before the European Commission or other competition PL 2,768/2022, art 10 (3).
140
authorities); Jacques Cremer and others, ‘Enforcing the Digital Markets Act: PL 2,768/2022, art 10 (4).
141
Institutional Choices, Compliance, and Antitrust’ [2022] Yale Tobin Center for PL 2,768/2022, art 10 (final paragraph).
142
Economic Policy Policy Discussion Paper No. 7 1, 14–15. In the same vein, see PL 2,768/2022, art 11.
143
Bostoen, ‘Understanding the Digital Markets Act’ (n 99) 282-283. PL 2,768/2022, art 16.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

which may reach a maximum of 2 % of the economic conglomerate’s memorandum of PL 2768 has expressed objections about adopting the
annual revenue in Brazil or up to 1 % of the revenue for the duration of DMA’s enforcement strategies, perceiving it as overly rigid. Neverthe­
the violation. However, the proposal grants ANATEL the power to less, UK and Germany initiatives offer models of regulatory obligations
consider more severe penalties, including mandatory measures, tem­ that are more flexible yet more targeted and well-defined compared to
porary suspension of operations, and possibly even the prohibition of a the Brazilian proposal. Thus, in this section, we aim to demonstrate that,
platform’s activities within the borders of Brazil. To secure the necessary even while steering clear of the perceived rigidity of the DMA, the
funding for ANATEL’S expanded responsibilities, Article 15 introduces Brazilian legislature still has ample opportunity to learn from compar­
the creation of a Sectoral Economic Fund.144 This fund will be supported ative law and refine its approach.
by taxes levied on companies that oversee digital platforms in Brazil. While our intent is not to delve into the UK’s proposals and the
The last provision worth mentioning is Article 13, which reaffirms German law to the same extent as we did with the DMA in the previous
the legal power of CADE in the review of mergers and cooperations sections of this paper, the next subsections make specific incursions into
agreements involving digital platforms.145 However, one must consider these legislations. These forays will illustrate how they provide inter­
this provision in the context of the revised wording of the General esting alternative perspectives on designing enforcement strategies.
Telecommunications Law. The new amendment empowers ANATEL to Our comparative analysis seeks to underscore that embracing a
"exercise legal authority in relation to digital platforms, specifically in broader perspective on global regulatory models can significantly
the areas of control, prevention and suppression of violations of the enhance the effectiveness and fairness of Brazil’s digital market regu­
economic order."146 The compatibility between CADE’s antitrust lations. By carefully considering these international examples, Brazilian
enforcement and ANATEL’s implementation of Law 2768/2022, there­ lawmakers could craft a regulatory framework that is not only respon­
fore, might raises some doubts that will also be discussed in this paper. sive to the dynamic nature of digital markets but also aligned with global
Making a balance of the legislative comparison, the DMA’s approach best practices, ensuring a competitive and equitable digital landscape.
to substantive obligations imposed on tech giants is considerably more
detailed and far-reaching compared to the Brazilian proposal. While the 4.1. The section 19a of the German Act against Restraints of Competition
DMA delineates an extensive list of bifurcated obligations with differing (ARC)
levels of specificity, the Brazilian legislation puts forth just four broad
guiding principles, leaving a large regulatory discretion to ANATEL. This On January 18, 2021, the 10th amendment to the German Act
deliberate minimalist approach ostensibly aims for proportionality and against Restraints of Competition (ARC) introduced section 19a, spe­
adaptability given the dynamic complexities of digital markets. How­ cifically aimed at dealing with the "Abusive Conduct of Undertakings of
ever, the absence of clear enforceable substantive obligations applicable Paramount Significance for Competition Across Markets." The main goal
to dominant platforms also engenders substantial challenges, as it will of this addition was to enhance German competition law, with a specific
be discussed next. focus on the digital era.
The genesis of section 19a can be ascribed to the efforts of a com­
4. Beyond the DMA: learning from alternative foreign regulatory mittee of specialists established by the German Federal Minister for
frameworks Economic Affairs and Energy in 2018. The panel’s objective was to
evaluate strategies for augmenting the capacities of German and Euro­
In the previous sections of this paper, the focus was predominantly pean digital companies, enabling them to compete successfully on a
on contrasting the Brazilian legislative proposal with the EU’s DMA. global scale.148 One of the commission’s main recommendations
This was instrumental in highlighting key areas where the Brazilian expressed in the Competition Law 4.0 report was to introduce a Platform
approach could be aligned with established European standards. Regulation “to impose a code of conduct on dominant online plat- forms
Nevertheless, the DMA is not a one-fits-all model. In the recent years, with a minimum level of sales or a minimum number of users”.149 This
international legislative efforts globally have prompted several different regulation would enable faster enforcement actions in cases of in­
types of “ex-ante” regulations. fringements to competition law rules.
An intriguing variety of approaches emerge when we juxtapose In order to achieve this goal, Section 19a of the GWB granted the
Brazil’s regulatory initiatives against other notable European legisla­ Bundeskartellamt the legal authority to proactively intervene against
tions like new Section 19a of the German Act against Restraints of companies formally designated as of "paramount significance for
Competition (ARC) and the UK’s proposal of DMCC bill. There are competition across markets" (PSCM).150 Although this concept mainly
interesting discrepancies in the substantive standards, methodologies, emphasizes large technology conglomerates, it has the potential to
and procedures of these emerging regulatory frameworks.147 Each of include non-digital business models as well.151 The process for desig­
these legal systems grapples with a fundamental dilemma: should nating companies under Section 19a differs from the DMA’s method, as
regulation in the digital sphere be stringent and specific, or should it firms do not self-assess compliance but rather the Bundeskartellamt
allow for adaptability and flexibility? This is a crucial consideration in a initiates formal proceedings for PSCM designation. These designations
field as dynamic and rapidly evolving as digital markets, where tech­
nological advancements and market shifts can render regulations
obsolete or overly restrictive if not carefully balanced. 148
Martin Schallbruch, Heike Schweitzer and Achim Wambach, ‘A New
In this section, we dissect alternative these international models, Competition Framework for The Digital Economy - Report by the Commission
using them as lenses through which we can refine and enhance Brazil’s “Competition Law 4.0”’ (2019) 6 CPI Antitrust Chronicle December 2019 39,
approach to digital market regulation. The expansion beyond the DMA is 34.
149
justified in this section for a particular reason: the explanatory Commission ‘Competition Law 4.0’, ‘A New Competition Framework for the
Digital Economy Report’ (2019) 1 6.
150
GWB § 19a (1).
151
Jens Uwe Franck and Martin Peitz, ‘Digital Platforms and the New 19a Tool
144
PL 2,768/2022, art 15. in the German Competition Act’ (2021) 12 Journal of European Competition
145
PL 2,768/2022, art 13. Law and Practice 513 (asserting that " it is clear from the text of the provision
146
PL 2,768/2022, art 13. and the memorandum of the responsible parliamentary committee that the 19a
147
Botta (n 101) (arguing that “the three frameworks have several differences tool may be applied to firms that are not (yet) dominant in any relevant market
in terms of ‘when’ to apply the new rules, ‘what’ types of obligations should be (...) however, the competition authority will not be at liberty to avoid defining
imposed on the online platforms, ‘how’ and ‘who’ should enforce the new markets).
rules”)

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

retain their validity for a duration of five years.152 As a pioneering implementation of ex ante obligations on digital
Article 19(2) of the GWB specifies behaviors that the Bundeskartel­ gatekeepers, the German Section 19a embraces a shift toward a more
lamt can prohibit ex ante.153 The list of prohibitions focus on ensuring regulatory approach better equipped for rapidly evolving online sectors.
fair market practices, such as preventing undertakings from preferen­ As will be discussed later, Section 19a adopts distinct enforcement
tially promoting their services over competitors’, restricting actions that strategies compared to the DMA, contributing to an intriguing mosaic
obstruct other businesses in relevant markets, and barring practices that for assessing the pros and cons of these parallel yet varying attempts to
hinder market competition. The law also addresses the misuse of sen­ complement competition law regimes.
sitive data, imposing unfair terms, and restricting interoperability and
data portability. Moreover, it forbids demanding unreasonable benefits 4.2. The UK’s Digital Markets Competition and Consumer (DMCC) bill
for handling the offers of another undertaking. Since the adoption of the
new legislation, the Bundeskartellamt has actively designated com­ The DMCC bill was proposed before the House of Commons on April
panies like Alphabet,154 Meta155 and Apple156 as having paramount 25, 2023. The proposed legislation aims to establish novel regulations
significance for competition across markets. Amazon was also formally for digital markets in the UK, with a specific focus on enhancing
designated but has appealed the decision.157 Similar proceedings against competition and safeguarding consumer interests. The primary goals are
Microsoft are ongoing.158 to create a specialized system for monitoring competition, grant more
On October 5th, 2023, the Bundeskartellamt adopted its first deci­ powers to the national Competition and Markets Authority (CMA) to
sion under Section 19a(2) against Alphabet Inc. regarding Google’s data regulate the digital industry, strengthen the ability to investigate and
processing terms.159 The focus of the investigation was whether Goo­ enforce antitrust and consumer protection laws, and introduce specific
gle’s data processing terms enable extensive user data processing across measures to protect consumers from harmful business practices.162 The
its various services. Formally, the Bundeskartellamt examined if Google bill will undergo subsequent deliberation in the House of Commons,
fulfills the criteria under Section 19a(2) sentence 1 no. 4a GWB through prior to advancing to the House of Lords, which serves as the upper
its implementation of these data processing terms. The authority found chamber of the United Kingdom’s legislative body.
that the terms provide for cross-service user data processing without The journey leading to the proposal of the DMCC bill was initiated in
affording users adequate choice options. By enabling extensive data 2019 by growing concerns about the dominance of large digital firms, as
accumulation spanning multiple Google offerings absent sufficient highlighted in the Furman Report163 and the CMA’s study on online
consent, the terms were deemed in violation of the GWB.160 platforms and digital advertising.164 Demonstrating consensus, both
Google offered voluntary commitments, including restrictions on crucially informed the UK’s regulatory direction, suggesting the instal­
cross-utilization of personal data and new user controls, to resolve the lation of a specialized Digital Markets Unit (DMU) within the CMA,
Bundeskartellamt’s preliminary concerns over its data processing terms outlining powers to design a conduct code for firms with preemptively
enabling extensive collection across services absent adequate consent. designated “Strategic Market Status” (SMS).165
Core commitments include safeguards compartmentalizing data within In response to these reports, 2020 the UK Government commissioned
individual offerings by default, with heightened transparency and the Digital Markets Taskforce with advising on a digital competition
explicit permission needed for portability across Google products or regime. The Taskforce’s December 2020 report recommended estab­
third-party sites and apps.161 The authority deemed these proposals lishing the DMU within the CMA, equipped with a specialized toolkit.166
sufficient to address the identified issues and furnish a framework for In a pivotal development, the DMU was established within the CMA in
Google to adjust its terms and choice. April 2021, albeit on a non-statutory basis, to lay the groundwork for a
new regulatory regime targeted at digital companies.167 The govern­
ment’s commitment to these recommendations was further evidenced in
152 July 2021, with the launch of a consultation on a new pro-competition
GWB § 19a (1).
153
GWB § 19a (2). regime for digital markets. The government’s May 2022 response to this
154
Bundeskartellamt, ‘Bundeskartellamt designates Google as company of consultation confirmed its intentions to pursue these reforms.168 The
paramount significance for competition across markets’ (Press Release, 5 focal point of this new regime was the establishment of the DMU,
January 2022) https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/P endowed with a bespoke regulatory toolkit specifically designed to
ressemitteilungen/2022/05_01_2022_Google_19a.html. address the unique challenges posed by digital markets. This progression
155
Bundeskartellamt, ‘Bundeskartellamt declares Meta as company with marks a significant shift in the UK’s approach to regulating digital
outstanding cross-market significance for competition’ (Press Release, 6 May markets, reflecting a nuanced understanding of the sector’s
2022) https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressem complexities.
itteilungen/2022/04_05_2022_Facebook_19a.html.
156 This nuanced approach is further articulated in the DMCC bill, which
Bundeskartellamt, ‘Bundeskartellamt concludes abuse proceedings against
introduces comprehensive oversight mechanisms for firms with SMS.
Apple after far-reaching changes’ (Press Release, 5 April 2023) https://www.
bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2023/05
These mechanisms include conduct requirements, setting defined
_04_2023_Apple_Abschluss.html behavioral obligations, pro-competition interventions to tackle systemic
157
Bundeskartellamt, ‘Bundeskartellamt prohibits Amazon from unfair busi­
ness practices’ (Press Release, 14 November 2022) https://www.bundeskartella
162
mt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/14_11_2022_Ama Charley Coleman, ‘Digital Markets, Competition and Consumers Bill - HL
zon_19a.html Bill 12 of 2023–24’ [2023] Library Briefing - House of Lords para 1.
158 163
Bundeskartellamt, ‘Bundeskartellamt initiates abuse proceedings against Furman and others (n 11).
164
Microsoft’ (Press Release, 28 March 2023) https://www.bundeskartellamt.de/ Competition and Markets Authority - CMA, Online Platforms and Digital
SharedDocs/Meldung/EN/Pressemitteilungen/2023/28_03_2023_Microsoft.ht Advertising: Market Study Final Report (Competition and Markets Authority
ml 2020).
159 165
Bundeskartellamt, ‘Decision Pursuant to Section 19a(2) Sentence in Furman and others (n 11) 59.
166
Conjunction with Section 32b(1) GWB - B7-70/21’ (2023) 1. Competition and Markets Authority (CMA), ‘A New Pro-Competition
160
ibid 57 (“Google can use the data across services, thus generating econo­ Regime for Digital Markets - Advice of the Digital Markets Taskforce’ (2020) 1.
167
mies of scale in its ecosystem and integrating its services ever more closely. This Ali Shalchi and James Mirza Davies, ‘Digital Markets, Competition and
allows Google to expand its already existing competitive advantages to the Consumers Bill: Digital Markets and Competition Provisions Summary’ [2023]
detriment of third parties whose competitive opportunities are diminished in Research Briefing Number CBP 9794 - House of Commons Library 1, 14.
168
direct contrast, and to further strengthen the Google ecosystem.”) ibid 16; HM Government, Government Response to the Consultation on a New
161
ibid 61–75. Pro-Competition Regime for Digital Markets (2022).

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

market power issues and new merger rules.169 The conduct re­ regulatory" model with greater industry and stakeholder collabora­
quirements aim to ensure fair dealing, open user choices, and trans­ tion.180 This alternative framework promises continued responsiveness
parency, striving to ensure equitable treatment of users, freedom of to emerging digital complexities. Though it is still in the legislative
choice in services, and clarity in service information.170 The DMCC bill process, the bill already indicates increased ambitions that are required
outlines various specific requirements, such as fair-trading terms, to sustain participation in evolving information ecosystems.
effective complaint resolution, and transparent user information. It also
addresses preventing discriminatory practices and misuse of market 5. Refining the legislative process in Brazil: strengthening PL
position.171 The CMA, responsible for implementing, modifying, or 2768 through comparative learning
revoking these requirements, will ensure compliance through a process
of public consultation, notification to stakeholders, and the authority to This section undertakes a rigorous examination of the normative
conduct investigations and impose sanctions.172 This rigorous oversight foundations and methods of enforcement of PL 2768. The Brazilian draft
ensures that designated firms adhere to the established standards of is situated within the wider international discourse on regulating digital
conduct, emphasizing the government’s proactive and strategic markets, with the goal of providing constructive improvements to the
approach in regulating the dynamic digital market landscape. proposal. The main contention is that the Brazilian proposal fails to fully
Pro-competition interventions embody a broader and more dynamic encompass the distinct objectives and intricacies of contemporary dig­
strategy employed by the CMA to mitigate the detrimental impacts on ital regulation. Hence, it is crucial to identify and rectify specific areas
competition stemming from a firm’s digital activities.173 These in­ requiring improvement and promote a strategic change in the legislative
terventions go beyond the specific behavior-focused conduct re­ process. The aim of this redirection is to ensure that PL 2768 is better
quirements. Instead, they aim to tackle the fundamental sources of aligned with the changing dynamics of digital ecosystems and the reg­
market power issues. This approach includes issuing pro-competition ulatory challenges they present. This will involve making the proposal
orders that mandate specific actions from designated firms, providing strong, flexible, and capable of effectively dealing with the distinct
policy recommendations to governmental bodies concerning digital landscape of competition in digital markets.
activities, and experimenting with trial-based remedies to explore po­ SubSection 5.1 underscores the inherent challenges of ex-ante ap­
tential solutions.174 PCIs related to data portability and interoperability proaches as public policies, particularly due to their hybrid nature,
provide remedies to minimize switching costs, increase consumer con­ which overlaps sector-specific economic regulation and conventional
trol over data, and drive greater competition.175 The implementation of competition law. These laws, emerging from institutional experimen­
these interventions is grounded in comprehensive research, conducted tation, are vital in addressing the nuances of digital markets. However,
through a Pro-Competition Investigation. This investigation delves into their discretionary nature presents both opportunities and risks. It is
the underlying factors influencing competition impacts. Based on its crucial to establish clear objectives, principles, and values for an ex-ante
findings, the CMA crafts tailored interventions that seek to effect more regulatory framework. In this context, PL 2,768′s legal ambiguity ap­
profound realignments within the market.176 These interventions are pears to be much more significant compared to the DMA. Although the
not static; they have set durations and undergo periodic reviews to DMA has been criticized for potential legal uncertainties, as it benefits
ensure their continued effectiveness, relevance, and proportionality.177 from having somewhat clear baselines for "contestability" and "fairness,"
This adaptive method allows for the application of transformative tools and largely because its obligations reflect the European Commission’s
while maintaining a focus on their ongoing suitability and impact. competition case discussions. This connection simplifies the under­
While both conduct requirements and pro-competitive interventions standing of the scope of the behavioral measures intended by the law. In
share the common goal of regulating digital markets and promoting contrast, PL 2,768′s goals are dramatically opaque, highlighting the need
competition, their methodologies and scopes are distinct and comple­ for Brazilian legislators to define a more explicit notion of “fair
mentary.178 Conduct requirements are more prescriptive, focusing on competition” in digital markets.
dictating the behavior of firms in their market activities to prevent SubSection 5.2 sustains the economic rationale behind Brazil’s pro­
harmful practices. In contrast, pro-competitive interventions represent a posal may not fully reflect the particular features of digital ecosystems
more systemic approach, targeting the underlying causes of market economics. The DMA strikes a delicate balance between competition
power issues and promoting a more competitive market environment.179 within and between ecosystems by focusing on contestability and fair­
Pro-competitive interventions represent a transformative approach, not ness. Although the European law could face criticism for potentially
limited to specific behaviors but encompassing broader measures like constraining long-term innovation, its text shows greater awareness of
promoting interoperability or recommending policy changes. the involved trade-offs, reflecting a clear public policy choice. In
This legislation pioneers multi-layered digital regulation, distinct contrast, Brazil’s law appears to engage only minimally with the eco­
from the DMA’s approach, by imposing ex ante conduct obligations nomic logic of digital ecosystems. Its approach of equating platforms to
alongside ongoing competition interventions. The proposed regime, traditional public utilities offers a unique but a misaligned perspective
which combines oversight and flexibility, represents a shift toward a "co- given the dynamic nature of digital markets. This perspective does not
embrace the nonlinear value creation in digital ecosystems and might
possibly lead to inaccurate remedies for enhancing competition. As a
169
DMCCb, chapters 3, 4 and 5. result, it raises concerns about the effectiveness and direction of PL
170
DMCCb, chapter 3, section 19(5), (6), (7) and (8). 2,768′s regulatory strategies.
171
DMCCb, chapter 3, section 20. SubSection 5.3 focus on the draft’s approach to defining "essential
172
DMCCb, chapter 3, sections 21-44. access control power" as mentioned in Article 9. W identify that the
173
DMCCb, chapter 4, section 45. Brazilian draft diverges notably from its foreign counterparts by relying
174
DMCCb, chapter 4, section 45. predominantly on revenue thresholds without a clear designation pro­
175
Competition and Markets Authority (CMA) (n 166) para 4.
176 cess. This contrasts with other models that combine quantitative and
DMCCb, chapter 4, sections 47-50.
177 qualitative criteria, offering a more nuanced approach to regulation.
DMCCb, chapter 4, section 54.
178
Niamh Dunne, ‘Pro-Competition Regulation in the Digital Economy: The
Such discrepancies underline the need for a more transparent and
United Kingdom’s Digital Markets Unit’ (2022) 67 Antitrust Bulletin 341, adaptable designation process in Brazil.
355–356.
179
Competition and Markets Authority (CMA) (n 166) para 4.61.
180
Dunne, ‘Pro-Competition Regulation in the Digital Economy: The United
Kingdom’s Digital Markets Unit’ (n 178) 347.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

Finally, SubSection 5.4 examines the regulatory strategies in PL approach to address complex issues.187
2768/2022, focusing on balancing regulatory flexibility with enforce­ The DMA, for instance, is an autonomous legislation that is explicitly
ment efficacy. The Brazilian draft departs intentionally from the DMA’s separate from, yet partially complementary to EU competition law.188
model, preferring a more open and adaptable framework of obligations. Upon initial observation, it may appear to be a sector-specific regulation
This legislative intent mirrors trends observed in international proposals that is akin to the traditional regulations that coexist with EU compe­
like those in the UK and Germany. Contrasting these diverse obligation tition law. However, due to its unique features, the DMA in fact occupies
frameworks reveals that exploring alternative obligation designs could a "difficult epistemological position",189 represents a “sui generis
enhance flexibility and efficacy given Brazil’s context. This comparative competition policy” ,190 creates a “separate competition law framework
analysis implies that deeper engagement with these international applicable to certain entities”191 or a “sector-specific competition law”
models during the Brazilian legislative process could provide valuable .192 Several factors contribute to the ambiguous nature of its position
insights to refine the regulatory approach. within the regulatory landscape.
On the one hand, the DMA serves a pragmatic function of relieving
5.1. Clarifying goals and principles in PL 2768: clarifying opaque the burden on the European Commission to prove anti-competitive ef­
regulatory intentions fects of digital platforms’ business practices, as some conduct is effec­
tively made per se illegal under the new ex ante rules.193 In this sense,
While identifying the general reasons for supporting new ex ante the DMA provides a regulatory shortcut, circumventing drawn-out case-
regimes may be relatively straightforward, shaping the legal nature of by-case analyses typical of competition law enforcement. Yet the DMA
legislation such as the DMA and other similar initiatives has proven remains intricately intertwined with EU competition law in multiple
extremely difficult. Several academics have questioned whether these respects. Firstly, many of its obligations directly mirror or draw inspi­
new regimes fall under the purview of competition law or economic ration from past or ongoing antitrust investigations against major
regulation.181 That is not an esoteric question, as it ultimately defines technology companies.194 This significant overlap prompts questions
the legal principles that should limit the administrative discretion in the about demarcating the DMA’s precise scope and invites further guidance
implementation of ex ante measures.182 from case law precedents when interpreting its rules.195 Secondly, while
There are some well-established principles of governance that apply sector-specific regulations usually center on dictating firm conduct, the
alternatively to each of these areas. Regulatory intervention is legitimate DMA also incorporates broader standard-based prohibitions somewhat
when it pursues a legal mandate and is the result of clear and transparent similar to competition law legislations.196
procedures.183 In contrast, the broad discretion granted to antitrust The UK’s proposed DMCC bill can be seen as an effort to establish a
agencies by open-textual statutory frameworks is somehow reconciled regulatory framework that promotes competition specifically for digital
with legal doctrine and well-established antitrust economic methodol­ platforms, much like the DMA. Nevertheless, since the initial discussions
ogies.184 The emergence of new laws that combine competition law and during the development of the DMCC bill, there have been disagree­
economic regulation mechanisms naturally raises the question of the ments regarding its exact relationship to more traditional mechanisms in
need for more precise definitions that limit state intervention to avoid regulated sectors.197 While the DMA clearly defines its complementary
the risks of arbitrariness.185 As a result, some authors are concerned that
legislations like the DMA could become a "blank slate" to define the
scope of the new regulatory regime.186 Conversely, other proponents 187
Oles Andriychuk, ‘Shifting the Digital Paradigm: Towards a Sui Generis
argue that the broad discretion granted to agencies allows for flexibility
Competition Policy’ (2022) 46 Computer Law & Security Review 1, 12.
in adapting to evolving markets, and that the combination of competi­ 188
DMA Recital 11 and Oliver Budzinski and Juliane Mendelsohn, ‘Regulating
tion law and economic regulation can provide a comprehensive Big Tech: From Competition Policy to Sector Regulation? (Updated October
2022 with the Final DMA)’ (2022) 27 Ilmenau Economics Discussion Paper 1,
19 ("the DMA itself is unambiguous about its intent to create a novel regulatory
181
Pinar Akman, ‘Regulating Competition in Digital Platform Markets: A instrument, albeit complementary to competition law, that is targeted at
Critical Assessment of the Framework and Approach of the EU Digital Markets gatekeepers and their impact on the digital economy").
189
Act’ (2022) 47 European Law Review 85, 102–106 and Heike Schweitzer, ‘The Larouche and De Streel (n 4) 542.
190
Art to Make Gatekeeper Positions Contestable and the Challenge to Know What Andriychuk, ‘Shifting the Digital Paradigm: Towards a Sui Generis
Is Fair: A Discussion of the Digital Markets Act Proposal’ (2021) 3 Zeitschrift für Competition Policy’ (n 187).
191
europäisches Privatrecht 503, 508 (arguing that "an accurate legal catego­ Akman, ‘Regulating Competition in Digital Platform Markets: A Critical
risation of the DMA has immediate consequences not only for the legal basis, Assessment of the Framework and Approach of the EU Digital Markets Act’ (n
but also for assessing the appropriateness of the proposal and the interpretation 181) 104.
192
of a future DMA"). Nicolas Petit, ‘The Proposed Digital Markets Act (DMA): A Legal and Policy
182
Natalia Moreno Belloso and Nicolas Petit, ‘The EU Digital Markets Act Review’ (2021) 12 Journal of European Competition Law & Practice 529.
193
(DMA): A Competition Hand in a Regulatory Glove’ [2023] Avalible at SSRN Colomo (n 16) 651 ("the Draft DMA sets up a new regulatory regime that
Electronic Journal. Forthcoming in the European Law Review 1, 31–33 9 would relieve the European Commission from the legal and economic con­
(arguing that "the degree of institutional accountability and the depth of the straints deriving stakeholders vis-à-vis the growing and transformative from
proportionality assessments required from the Commission might also again be competition law).
194
a function of the nature of the DMA"). Friso Bostoen, ‘Understanding the Digital Markets Act’ (2023) 0 The Anti­
183
Robert Baldwin, Martin Cave and Martin Lodge, Understanding Regulation trust Bulletin 1, 6 (asserting that "it is thus not necessary to fit the DMA into a
(Oxford University Press 2012) 26–31. competition law straitjacket, but it is justified to use competition law as a
184
Niamh Dunne, Competition Law and Economic Regulation: Making and Man­ reference point").
195
aging Markets (Cambridge University Press 2015) 91 and Herbert J Hovenkamp, Belloso and Petit (n 122) 28.
196
The Antitrust Enterprise: Principle and Execution (Harvard University Press 2013) Belle Beems, ‘The DMA in the Broader Regulatory Landscape of the EU: An
45–50. Institutional Perspective’ [2022] European Competition Journal 1, 15 and
185
Niamh Dunne, ‘Between Competition Law and Regulation: Hybridized Marco Botta, ‘Sector Regulation of Digital Platforms in Europe: Uno, Nessuno e
Approaches to Market Control’ (2014) 2 Journal of Antitrust Enforcement 225. Centomila’ (2021) 12 Journal of European Competition Law and Practice 500
186
Pablo Ibáñez Colomo, ‘The Draft Digital Markets Act: A Legal and Institu­ (suggesting that the DMA Draft should be amended to delete the "negative"
tional Analysis’ (2021) 12 Journal of European Competition Law and Practice obligations on digital gatekeepers, in order to limit overlaps with Article 102
561, 562. TFEU).
197
Dunne, ‘Pro-Competition Regulation in the Digital Economy: The United
Kingdom’s Digital Markets Unit’ (n 178) 364–366.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

role in conjunction with EU competition law, the DMCC bill lacks similar inherently ensure unambiguous implementation, its robust normative
clarity.198 Regardless of one’s normative stance, the DMCC bill’s seems grounding along with the impact assessment preceding its formulation
to uneasy posits between old and new. offer vital institutional safeguards. Furthermore, despite criticism
Regarding the German initiative, categorizing Section 19a of the regarding the extensive intricacy of Articles 5 and 6 obligations, their
German Competition Act (GWB) as either pure competition law or ex- meticulous elaboration serves as an important institutional assurance,
ante regulation is complex, as it exhibits dimensions of both. On one channeling administrative discretion through defined avenues. Together
hand, it would not be difficult to regard the German approach as a mere these factors can substantially mitigate concerns about regulatory
complement to the pre-existing competition law framework, since Sec­ overreach, constructing essential reference points to discipline the
tion 19a constitutes an additional provision incorporated directly into application of the DMA’s obligations.
the overarching legal statute. Additionally, unlike the DMA’s rigid per se The UK DMCC bill embraces transparency regarding its guiding aims
rules, Section 19a retains structured analysis requiring platforms to centered on fostering “fair trading,” “open choices” and “trust and
prove their conduct is objectively justified based on limited anti- transparency” across digital ecosystems. The fair-trading imperative
competitive impacts or countervailing efficiencies. This continued involves ensuring businesses engage ethically with consumers through
emphasis on evaluating justifications aligns Section 19a closer to con­ prohibiting misleading practices or contraventions of diligence.203 Open
ventional competition law enforcement.199 On the other hand, Section choices provide users redress avenues alongside accessible contract in­
19a has an undeniable regulatory dimension. It empowers the Bunde­ formation enabling informed decisions.204 Finally, trust and trans­
skartellamt to prohibit certain practices even before companies have a parency necessitates that platforms furnish users adequate details to
chance to undertake them – emblematic of a regulatory approach.200 In comprehend services terms and make suitable choices regarding in­
addition, Section 19a’s obligations are not self-executing as some DMA teractions.205 By providing a comprehensive outline of these legal
provisions. The Bundeskartellamt must first designate companies as values, the DMCC bill has the potential to counter accusations of unre­
gatekeepers, then evaluate if banning specific conduct is warranted to stricted discretion or arbitrary interventions. The careful and detailed
promote innovation and competition. Hence the binding nature of Sec­ listing of desired results provides important guarantees for the DMU
tion 19a’s regulatory measures stems from case-specific decisions rather focus on goals that have been extensively discussed.
than direct statutory prohibitions. This discretion granted to the Bun­ The lack of detailed objectives in Brazil’s PL 2768/2022 stands in
deskartellamt in imposing non-self-executing obligations resembles the stark contrast to these foreign experiences. While Articles 4206 and 5207
role of a regulatory authority more than conventional competition include various economic and non-economic objectives, PL 2768 fails to
enforcement.201 adequately analyze the substantive concept of "competition" it aims to
While emerging ex-ante initiatives cannot be precisely classified into facilitate in digital markets. A more exact expression of the objectives of
rigid regulatory or competition law boxes, we can safely claim that they the law is necessary, particularly because PL 2768 does not adhere to a
clearly constitute new forms of competition policy transcending con­ comprehensive set of responsibilities but instead permits significant
ventional antitrust regimes.202 By tackling challenges posed by digital regulatory discretion. In this regard, legislators face a crucial choice in
gatekeepers through novel combinations of oversight, these experi­ deciding whether ANATEL’s obligations should conform to or diverge
mental rules represent original institutional manifestations aimed at from the economic principles typically upheld in Brazil’s Competition
foster competition in digital markets. Undoubtedly, a substantial degree Law.
of administrative discretion is inevitable for these regimes to effectively Given the vagueness of the regulatory objectives in the current
constrain rapidly evolving digital sectors. However, thoughtful impact version of PL 2768/2022, several approaches can be considered. First, it
assessments and clearly articulated aims precede most proposals, appears clear that PL 2768/2022 represents an opportunity to overcome
embedding a reasonable degree of predictability. The foreign legisla­ the rigid economic analysis inherent in the current Competition Law Act
tions examined in this article are crafted not just from in-depth political of 2011. Second, in developing a substantive competition policy for
debates and a substantial track record in competition cases against large digital markets, Brazilian legislators might draw on a broader inter­
digital platforms. pretation of the constitutional principle of free competition as estab­
Without a doubt, the successful implementation of these new systems lished in Article 170(5) of the Brazilian Constitution. This constitutional
relies heavily on the establishment of clear and explicit legal principles, approach allows for market regulation to achieve various objectives that
objectives, and values. Engaging in new areas of public policy with a resonate with social justice principles.208 These constitutional values
strong legitimacy is not just a procedural requirement, but rather an can be complemented by a perspective oriented towards improving
essential aspect for these systems. values such as contestability, fairness and transparency in digital eco­
In this regard, the DMA demonstrates a concerted effort to establish nomic transactions.
guiding principles and objectives. Its extensive recitals seek to sub­ Of course, all this involves economic trade-offs.209 This highlights
stantiate foundational concepts like contestability and fairness in deal­ the critical importance of a thorough and open legislative debate about
ings with business users. While the DMA’s textual precision does not regulatory proposals. Indeed, the key decisions of the DMA, for instance,

198 203
Oles Andriychuk, ‘Comparing the Incomparable: Analysing UK Digital DMCCb, Chapter 3, Section (6).
204
Markets , Competition and Consumers Bill through the Prism of the DMA’ DMCCb, Chapter 3, Section (7).
205
(2023) 3 Concurrences Law Review 1, 2 ("[The DMA] is a new policy, not a DMCCb, Chapter 3, Section (8).
206
mere incremental extension of the old one. This is missing in the DMCCb. For PL 2,768/2022, art 4.
207
better or worse, the DMCCb does not provide the new UK regime with this PL 2,768/2022, art 5.
208
privilege of a new start, designing the new rules as a continuation of the Eros Roberto Grau, A Ordem Econômica Na Constituição de 1988 (Editora
existing ones—even if significantly expanded and refined"). Malheiros 2017) 206–207; Vinicius Marques de Carvalho, ‘Princípios e Final­
199
Botta (n 9) ("Section 19(a) GWB is based on an ex post evaluation assess­ idades Da Defesa Da Concorrência’, Defesa da Concorrência: estudos e votos
ment, similar to abuse of dominance investigations"). (Editora Singular 2015) 18–22; Paula A Forgioni, Os Fundamentos Do Antitruste
200
Adrian Deuschle, ‘Germany: The New Section 19a of the German Compe­ (Revista dos Tribunais 2016) 192–193.
209
tition Act’ (2023) 43 European Competition Law Review 557, 562 (asserting Larouche and De Streel (n 4) 551; Crémer and others (n 103) 30 (noting
that "section 19a is definitely a more intense form of intervention compared to that " we are cautiously optimistic about the impact of the DMA on pro-
traditional competition law"). competitive innovation, although we should warn that the consequences of
201
Franck and Peitz (n 151) the law will depend crucially on the way in which it is enforced by the
202
Schweitzer (n 27) 508. Commission").

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

were not taken without a thoughtful consideration, rather, EU law­ modularity of its products, including its iOS operating system and apps
makers placed their confidence in the long-term benefits of increased like iCloud, iMessenger, which are universally compatible with the
competition and diversification in digital markets, even if it meant iPhones, iPads, Apple Watch, and other hardware manufactured by the
sacrificing some short-term static efficiencies.210 This kind of assessment firm.
should be carefully considered by Brazilian lawmakers. The economics of digital ecosystems follow unique forms of value
In the upcoming section, we will explore how addressing the ambi­ creation and extraction.215 The core platforms benefit from strong
guities in PL 2,768′s objectives can be achieved by reevaluating the network effects and set the rules of the ecosystem to strategically to
principles and values laid out in Articles 4 and 5. This reexamination capture the rents generated by third-party complementors in adjacent
should be conducted in light of contemporary understandings of markets.216 In that sense, one can shape new dimensions of vertical and
competitive harms within the economics of digital ecosystems. By non-vertical competition throughout the value chain, especially the
aligning the law’s stated goals with the evolving realities and challenges relationship between core platforms and third-party complementors.217
of digital markets, a more effective and relevant regulatory framework The economic logics of digital ecosystems can be somehow related to
can be established. the legal values embodied in the new foreign regulatory frameworks.
The DMA acknowledges the ability of gatekeepers to leverage its eco­
nomic power across integrated ecosystems, entrenching dominance and
5.2. Reconsidering the "Public Utility" paradigm for digital platforms
limiting contestability.218 Some recitals directly address how network
effects, strong economies of scale, and accrued data erect barriers for
The distinctive legal features of novel ex-ante regulations for digital
challengers across interconnected platform activities.219 To rectify un­
markets call for a comprehensive grasp of their place within a broader
fairness and imbalances stemming from this ecosystem control, the DMA
institutional architecture of regulatory policies designed to address the
calibrates obligations directly targeting business-to-gatekeeper re­
transformations brought about by the digital economy. In this context,
lations. By directly engaging with gatekeeper ecosystem power, the
the foreign ex-ante initiatives discussed represent a significant departure
DMA departs from linear perspectives of value chains, constructing av­
from the policy recommendations of economic regulation and compe­
enues for multi-dimensional oversight attuned to platform economics.
tition law, which are traditionally based on the principles of market
Under Section 19a of the German law, the Bundeskartellamt ad­
equilibrium and market failure neoclassical economic models.211
dresses competition issues for companies of Paramount Significance for
The ex-ante initiatives aim to fill the “regulatory gap” of both
Competition across Markets (PMSC) by prohibiting practices that favor
traditional economic regulation and antitrust legislations to address the
their own offers over competitors, especially in mediating access to
unique economic power wielded by prominent core platforms that hold
markets. This includes preventing dominant firms from presenting their
the power to govern the structure and functioning of what are commonly
offers more favorably or integrating them into devices to the exclusion of
referred to as "digital ecosystems”. Despite the absence of a compre­
others. Additionally, the law aims to curb measures that hinder other
hensive definition in the current body of strategic management litera­
businesses in supply and sales markets, such as impeding competitors
ture,212 the notion of “digital ecosystems” has proven to be highly
from advertising or accessing customers through various channels.
valuable in explaining the development of interconnected networks
These regulations extend to preventing anti-competitive practices like
spanning multiple markets. They can be broadly described as networks
refusing interoperability or data portability and creating barriers
of distinct players offering products with varying degrees of comple­
through unfair data processing.
mentarities based on a non-hierarchical structure of interdependent
The UK’s proposal’s conduct requirements target competition within
relationships aligned for the creation of economic value through
digital ecosystems, addressing how controllers can distort market dy­
modular digital technologies.213
namics. Section (3) of Chapter 3 of the DMCC bill illustrates this with key
GAFAMs companies are particularly prone to the adoption of digital
examples of “negative” conduct requirements. One notable provision
ecosystems strategies in recent years. Their primary focus has been on
prohibits controllers from unfairly favoring their own products,
creating ’consumer ecosystems’ or ’multi-product ecosystems’.214 In
addressing self-preferencing issues that undermine competition.220
such setups, a core platform facilitates a range of services and products
Another important one restricts large platforms from “carrying on ac­
that are either complementary or interdependent. One can cite Alphabet
tivities other than the relevant digital activity in a way that is likely to
products as an instance of a digital ecosystem, which encompasses
Google Search, Google Docs, Google Play, Google Drive, Google Trans­
late, Gmail, Google Maps, Google Shopping, Google Home, YouTube,
and more. Another example is Apple’s ecosystem, which relies on the 215
Soumaya Ben Letaifa, ‘The Value-Creation/Value-Capture Dilemma’ (2014)
52 Management Decision 278; K Sabeel Rahman and Kathleen Thelen, ‘The Rise
of the Platform Business Model and the Transformation of Capitalism’ (2019)
210
Amelia Fletcher, Jacques Crémer, Paul Heidhues, Gene Kimmelman, Gior­ 47 Politics & Society 177; Mariana Mazzucato, Josh Ryan-Collins and Giorgos
gio Monti, Rupprecht Podszun et al., ‘The Effective Use of Economics in the EU Gouzoulis, ‘Mapping Modern Economic Rents: The Good, the Bad, and the Grey
Digital Markets Act’ [2023] Policy Discussion Paper No. 8, Digital Regulation Areas’ (2023) 47 Cambridge Journal of Economics 507, 525–256.
216
Project, Yale Tobin Center for Economic Policy 1, 8 (asserting that "rule-based Michael G Jacobides, Carmelo Cennamo and Annabelle Gawer, ‘Towards a
regulation such as the DMA can take a more proactive role by requiring pro- Theory of Ecosystems’ (2018) 39 Strategic Management Journal 2255; Anna­
competitive measures to open up markets even in the absence of any stra­ belle Gawer, ‘Digital Platforms and Ecosystems: Remarks on the Dominant
tegic anti-competitive conduct, even if these risk generating a short-term loss in Organizational Forms of the Digital Age’ (2022) 24 Innovation: Organization
efficiency"). and Management 110, 111–116 <https://doi.org/10.1080/14479338.202
211
Niamh Dunne, Competition Law and Economic Regulation: Making and Man­ 1.1965888>.
217
aging Markets (Cambridge University Press 2015) 6–10. Frederic Jenny, ‘Competition Law and Digital Ecosystems: Learning To
212
The term "ecosystems" appears in the specialized literature as a metaphor Walk Before We Run’ (2021) 30 Industrial and Corporate Change 1143, 1160;
for a community of actors whose business models interact reciprocally. See Amelia Fletcher, ‘Digital Competition Policy: Are Ecosystems Different?’ [2020]
James F Moore, ‘Business Ecosystems and the View from the Firm’ (2006) 51 OECD Hearing on Competition Economics of Digital Ecosystems 1, 9–11.
218
The Antitrust Bulletin 31. DMA, Recital 3.
213 219
Michael G Jacobides and Ioannis Lianos, ‘Ecosystems and Competition Law DMA, Recital 32 (assessing that “the features of core platform services in
in Theory and Practice’ (2021) 30 Industrial and Corporate Change 1199, the digital sector, such as network effects, strong economies of scale, and
1213–16. benefits from data have limited the contestability of those services and the
214
Amelia Fletcher, ‘Digital Competition Policy: Are Ecosystems Different?’ related ecosystems”) and Recital 64.
220
[2020] OECD Hearing on Competition Economics of Digital Ecosystems 1, 2. DMCCb, Chapter 3, Section (3) (b).

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

increase the undertaking’s market power materially, or bolster the indirect cross-platform network effects and co-creation in the ecosystem
strategic significance of its position, in relation to the relevant digital encompassing multiple actors, breaking with the conventional utility
activity”.221 Other provisions can be related to the notion of inter- model. The ecosystem orchestrator’s power is ultimately determined by
ecosystem competition, such as the prohibition of restricting interop­ the strategic decisions it makes in relation to the scalability of inde­
erability between the relevant service or digital content and products pendent complementor’s business models.
offered by other undertakings.222 Second, the goals of the new regulatory initiatives to enhance
In contrast with those approaches, PL 2768 demonstrates a vernac­ competition in digital markets indeed differ significantly from those of
ular reminiscent of public utility regulatory mechanisms, underscoring traditional infrastructure sectors focusing on unlocking the microeco­
the prominence of ANATEL’s role as an operator and enforcer of the nomic benefits of competitive markets. While public utility regulation is
control of digital platforms as somewhat essential facilities. A straight­ primarily aimed at preventing natural monopolies from directly
forward articulation of this assumption by the legislature can be dis­ exploiting consumers, therefore correcting a market failure, digital
cerned through a close examination of Deputy João Maia’s explanatory ecosystems regulations are far more ambitious in reshaping the market
memorandum. He posits that the legislative proposition encompasses "a structure, as they aim both to encourage threats to large incumbent
regulation committed to the mitigation of the monopolistic power platforms and to promote other societal values of economic
wielded by the control of digital platforms over the ‘essential access’".223 competition.228
He further suggests that "ANATEL possesses a regulatory expertise that In this regard, the comparison draw by PL 2768 between digital
closely mirrors the requirements for the role of digital platform regu­ platforms and telecommunications regulations might seem fitting at first
lator".224 Further, the document elucidates that "a significant proportion glance, given the similarities in regulatory strategies. In both the EU and
of ANATEL’s pro-competition regulations are based on interconnections Brazil, telecommunication regulatory framework adopted after the
obligations, which fundamentally involves mandating incumbent oper­ sector’s liberalization focused on imposing ex-ante obligations (such as
ators to provide access to their local networks".225 interconnection mandates) on a select few operators holding “significant
Framing digital platforms as parallel to natural monopolies offers an market power” in the wholesale telecommunications network mar­
engaging justification for regulatory intervention.226 Yet, caution is kets.229 The spirit of these reforms was to allow telecom operators to
advised with this metaphor, as the normative goals of regulating digital remain vertically integrated while requiring them to open their net­
markets embark on a path markedly divergent from the conventional works to smaller entrants.230 In Brazil, the ANATEL pro-competition
microeconomic frameworks of public utilities regulation, and rather, rules for the telecommunications sector mirrors the EU method by
represent a more ambitious institutional experimentation. This diver­ imposing asymmetrical remedies as transparency and public intercon­
gence is pivotal, underscoring that the regulation of digital platforms nection offers obligations on operators identified as having “significant
delves into intricate ecosystems and dynamic market interplays. market power” in relevant wholesale markets.231
As the legislative discourse on PL 2768 progresses, it is imperative for Despite these parallels, the similarities with ex-ante initiatives for
Brazilian lawmakers to undertake a meticulous reevaluation of the bill’s digital markets are rather superficial. EU’s telecom regulatory policies
approach. This reexamination is particularly crucial in light of the are fundamentally shaped by competition law principles. They represent
fundamental differences that exist between traditional public utilities a unique approach, functioning as proactive ex-ante measures designed
regimes and the contemporary global regulatory frameworks for plat­ to pre-emptively address potential market issues typically addressed by
forms, such as the DMA. the Treaty on the Functioning of the European Union (TFEU).232 In that
First, the economic characteristics of digital ecosystems exhibit sig­ regard, telecom regulation interconnections regulation primarily aims
nificant disparities when compared to those of essential facilities. The to mitigate the leverage of dominant positions from wholesale to retail
power of a core platform in a digital ecosystem stem from its ability to markets, applying sector-specific regulatory obligations where anti­
manage interactions between users, engendering network effects that, competitive foreclosure of retail markets seems inevitable without
unlike traditional public utilities, stem from deliberate design choices
rather than exogenous technological attributes.227 Moreover, the value
creation process occurs outside the vertically integrated firm, via 228
Pierre Larouche and Alexandre de Streel, ‘A Compass on the Journey to
Sucessful DMA Implementation’ (2022) 3 Concurrences Competition Law Re­
view - The Digital Market Act Dossier 26, 49 and Schweitzer (n 18) 542
(arguing why "the DMA should not be read as, or evolve into, a regime of public
utility regulation").
229
The current version of the EU’s Electronic Communications Code, partic­
ularly Articles 69-74 and 76-80, details ex-ante remedies that can be applied to
companies identified as having ‘significant market power’ (SMP) as defined in
Article 63 (Regulation (EU) 2018/1971 of the European Parliament and of the
Council of 11 December 2018 establishing the European Electronic Commu­
nications Code).
230
Larouche and De Streel (n 4) 552.
221 231
DMCCb, Chapter 3, Section (3) (c). In this regard, see Anatel (Agência Nacional de Telecomunicações, Brazil),
222
DMCCb, Chapter 3, Section (3) (e). ’Resolução no 600, de 8 de novembro de 2012′ (Resolução 600/2012, 8
223
’Explanatory Memorandum to PL 2768/2022′, p 10. November 2012) https://informacoes.anatel.gov.br/legislacao/resoluco
224
’Explanatory Memorandum to PL 2768/2022′, p 10. es/34-2012/425-resolucao-600; Anatel (Agência Nacional de Tele­
225
’Explanatory Memorandum to PL 2768/2022′, p 10. comunicações, Brazil), ’Resolução no 693, de 17 de julho de 2018′ (Resolução
226
Some scholars have advance this approach at least in a metaphorical 693/2018, 17 July 2018) https://informacoes.anatel.gov.br/legislacao/reso­
manner, such as Lina M Khan, ‘Amazon’s Antitrust Paradox’ (2017) 126 Yale lucoes/2018/1142-resolucao-693.
232
Law Journal 710, 797–802 (exploring the adoption of public utility regulations Peter Alexiadis and Martin Cave, ‘Regulation and Competition Law in
and common carrier duties for digital platforms); K Sabeel Rahman, ‘Regulating Telecommunications and Other Network Industries’, R. Baldwin, M. Cave, and
Informational Infrastructure: Internet Platforms as the New Public Utilities’ M. Lodge (eds), Oxford Handbook on Regulation (Oxford University Press 2010)
[2018] Georgetown Law Technology Review Journal 234; Nikolas Guggen­ 507 (explaining that " since the end state is supposed to be one that is governed
berger, ‘Essential Platforms’ (2021) 24 Stanford Technology Law Review 237. by competition rules, the regime is designed to shift towards something that is
227
Ioannis Lianos, ‘Value Extraction and Institutions in Digital Capitalism: consistent with those rules. These rules are to be applied (in certain markets)
Towards a Law and Political Economy Synthesis for Competition Law’ (2022) 1 not in a responsive ex post fashion, but in a pre-emptive ex ante form).
European Law Open 852, 881.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

intervention.233 dominance of established gatekeepers.241 They can also hinder innovation

This logic closely mirrors the traditional antitrust framework of in digital ecosystems, specifically concerning standards and interface, as
identifying dominance and the risks of market foreclosure, which are such obligations can result in a greater degree of homogeneity among
foundational to the ’more economic approach’ that the DMA seeks to platforms, thereby restricting firms’ capacity to create distinct products
transcend. As Pablo Ibáñez Colomo notes, "whereas the EU telecoms and services.242 Therefore, it is imperative for regulators to consider
regime aims to achieve effective competition (as understood under Ar­ interoperability as a single element within a comprehensive approach,
ticles 101 and 102 TFEU), the Draft DMA seeks to ensure that the rather than as a universal remedy. This highlights the importance of
markets under its scope are fair and contestable.".234 The DMA focus on conducting thorough analysis of the unique circumstances in each market
intra-ecosystem relationships therefore significantly differs from the in order to develop tailored solutions that circumvent generic
scope of the telecommunications regime.235 While the latter relates requirements.
directly to the risk of excluding as-efficient competitors, the principle of The conceptual misalignment in PL 2768 arises when traditional
fairness in the DMA context involves balancing rights and obligations public utility models are used to perceive digital platforms. It is crucial
between gatekeepers and professional users. The DMA thus moves away for Brazilian legislators to acknowledge that contemporary ex-ante
from “market failure” synthesis to a more broader approach of regulations for digital platforms involve an original reimagining of
addressing “ecosystem failures”.236 legal frameworks. The purpose of these rules is not only to unlock the
Thirdly, the feasibility and effectiveness of interoperability mandates optimal allocation of resources in terms of efficiency in digital markets,
within digital ecosystems may exhibit a greater degree of complexity but also to restructure them in alignment with wider socioeconomic
compared to the telecommunications sector. Telecommunications regu­ objectives, including transparency, consumer choice, and social justice.
latory bodies have long implemented interconnection requirements on In that regard, one can fairly say that the “new digital competition”
dominant operators to foster a competitive landscape. Although pricing legislations are so unique especially because they involve a combination
disputes may exist, the adoption of mandated interconnection has of protective and proactive market measures, going beyond the resto­
demonstrated efficacy as a policy tool in facilitating the entry of new ration of competition and embracing a harmonious balance between
market participants and augmenting consumer choice.237 Interoperability these two dimensions.243
measures possess the potential to facilitate innovation within an ecosystem The DMA exhibits a clear connection and influence from public
by reducing entry barriers and empowering third-party complementors to utilities regulatory models, however its engagement in this realm is
benefit from the existing digital infrastructure.238 However, the task of characterized by a greater degree of creativity and experimentation than
regulating open access while simultaneously maintaining incentives for may be readily apparent.244 The incorporation of ex-ante regulatory
platforms to innovate involves tricky trade-offs.239 Interoperability mea­ measures within digital ecosystems should not be regarded as a simple
sures must also be designed in accordance with the specific economic and substitute for competition law, which has faced criticism for its limita­
technological conditions of each sector in order to attain an optimal tions in addressing issues specific to digital markets. The DMA and
equilibrium,240 as those measures may pose the risk of reinforcing the comparable legislations effectively integrate the domains of antitrust,
regulation, and utilities, thereby challenging traditional delineations
and presenting a lack of predetermined courses of action.
233
Colomo (n 186) 569. Building on these ideas, the regulation of digital markets demands a
234
ibid 570. departure from the technocratic perspectives prevalent in traditional
235
Larouche and De Streel (n 4) 553 (asserting that: “the end goal [of the industry regulation. It necessitates an approach that is both compre­
telecommunications regulations] was to nudge markets towards competing hensive and multifaceted, addressing a wide spectrum of socioeconomic
infrastructures, because infrastructure-based competition is believed to be policy principles. Legislators are thus urged to delve deeply into the core
richer and more effective than service-based competition. In contrast, the ob­
normative concepts of the Brazilian proposal. They should carefully and
ligations to be imposed under the proposed DMA mostly serve to achieve
openly articulate the essence of the competition policy they intend to
competition on and around a platform”.
236
Cennamo, C, ’The EU Digital Markets Act: It Is Not About Markets But
enforce in digital markets, ensuring it aligns with these broader non-
Ecosystem Failures!’ (Network Law Review) https://www.networklawreview. microeconomic focused objects.
org/dma-ecosystems/ accessed 4 September 2023. (sustaining that “the DMA
is not about traditional anticompetitive conduct, nor about (digital) markets; it
5.3. Clarifying the notion of ’essential access control power’
is largely about preserving the “health” of digital ecosystems. Essentially, it is
about limiting potentially prevaricating (and abusive) practices by the firm
controlling the platform core services over the entire digital ecosystem gravi­
One critical component of new regulatory regimes is designating a
tating around the platform CPS”). small group of digital players to be subjected to the ex-ante measures.
237
Jonathan E. Nuechterlein and Philip J Weiser, Digital Crossroads: American
Telecommunications Policy in the Internet Age (The MIT Press 2013) 10–11;
241
Baldwin, Cave and Lodge (n 91) 458–462. Organization for Economic Co-operation and Development - OECD, ‘Data
238
Joseph Farrell and Philip J Weiser, ‘Modularity, Vertical Integration and Portability, Interoperability and Digital Platform Competition’ 20.
242
Open Access Policies towards a Convergence of Antitrust and Regulation in the Wolfgang Kerber and Heike Schweitzer, ‘Interoperability in the Digital
Internet Age’ (2003) 17 Harvard Journal of Law & Technology 83, 92–93; Economy’ (2017) 8 Journal of Intellectual Property, Information Technology
Autorité de la Concurrence and Competition and Markets Authority - CMA, ‘The and E-Commerce Law 38, 42
243
Economics of Open and Closed Systems’ (2014) 1 15–16; Herbert J Hov­ Oles Andriychuk, ‘EU Digital Competition Law: The Socio-Legal Founda­
enkamp, ‘Antitrust and Platform Monopoly’ (2021) 130 The Yale Law Journal tions’ (2023) 8 Cambridge Yearbook of European Legal Studies 1.
244
1952, 2037–2038. In this regard, see Elettra Bietti, ‘Structuring Digital Platform Markets:
239
Chris Riley, ‘Unpacking Interoperability in Competition’ (2020) 5 Journal Antitrust And Utilities’ Convergence’ (2024) 4 Forthcomming in University of
of Cyber Policy 94 (discussing six different ways in which interoperability Illinois Law Review 1, 57–59. (explaining that the regulation of digital platform
implies opportunities to promote or to impede competition) markets is causing a convergence and remaking of antitrust and regulatory
240
William P. Rogerson and Howard Shelanski, ‘Antitrust Enforcement, approaches. As policymakers and scholars redefine the shape and purpose of
Regulation, and Digital Platforms’ (2020) 168 University of Pennsylvania Law digital platforms, both antitrust and regulation are being dynamically trans­
Review 1911, 1927 ("precisely what form these types of regulation should take formed. This transformation is due to the recognition that digital markets are
will differ from industry to industry and require specific knowledge of under­ not naturally competitive and require proactive measures to ensure decentral­
lying economic and technological facts"). ization, competition, and consumer choice. Therefore, the interplay between
antitrust enforcement and regulatory modalities is crucial in shaping digital
markets and addressing new harms and policy concern).

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

Several terminologies were conceived to circumvent this group of un­ required for rebuttal.255
dertakings, such as the DMA’s "gatekeepers", the UK’s proposed defini­ The UK’s proposed DMCCb sets forth a more nuanced process for
tion of "strategic market status", and the concept of "paramount designating large digital undertakings with “Strategic Market Status
importance for competition between markets" of GWB Section 19a, (SMS)” subject to ex-ante obligations. Under Section 2(1) and Section 2
alongside with alternative expressions used in relevant digital markets (2), the CMA may designate an undertaking as having SMS in respect of
reports.245 Although these regulatory initiatives exhibit some similar­ a digital activity linked to the UK where it meets the SMS conditions
ities regarding the firms subject to regulation, they differ in the appli­ regarding that activity.256 That assessment relies both on qualitative
cable qualitative and quantitative thresholds as well as the applicable criteria and quantitative thresholds. On the qualitative front, designa­
designation process.246 tion depends on demonstrating: (a) "substantial and entrenched market
Under the terms of the DMA, a undertaking is considered a gate­ power" per Section 5, and (b) a "position of strategic significance" under
keeper if it operates one or more of the core platform services related to Section 6.257
the activities of “(a) online intermediation services; (b) online search Assessing substantial and entrenched power requires the CMA to
engines; (c) online social networking services; (d) video-sharing plat­ undertake a "forward-looking assessment of a period of at least 5 years"
form services; (e) number-independent interpersonal communications per Section 5(2), accounting for foreseeable developments affecting the
services; (f) operating systems; (g) web browsers; (h) virtual assistants; undertaking’s conduct.258 The evaluation of a “position of strategic
(i) cloud computing services; (j) online advertising services.” (Article 2 significance” involves evaluating one or more of the following condi­
(2).247 The Commission needs to conduct a market investigation before tions: “(a) the undertaking has achieved a position of significant size or
expanding the scope of core platform services subject to regulation to scale in respect of the digital activity; (b) a significant number of other
other platforms activities.248 undertakings use the digital activity as carried out by the undertaking in
The criteria for designating an entity as a gatekeeper are laid out in carrying on their business; (c) the undertaking’s position in respect of
Article 3(1). An undertaking shall be designated a gatekeeper if it "(a) the digital activity would allow it to extend its market power to a range
has a significant impact on the internal market; (b) provides a core of other activities; (d) the undertaking’s position in respect of the digital
platform service which is an important gateway for business users to activity allows it to determine or substantially influence the ways in
reach end users; and (c) enjoys an entrenched and durable position"249 which other undertakings conduct themselves, in respect of the digital
in its operations or is foreseeably likely to in the near future. Article 3(2) activity or otherwise”.259 Complementing those qualitative criteria,
establishes quantitative thresholds that lead to a "presumption" of Section 7 imposes turnover thresholds - either global group turnover
gatekeeper status if met. These include: annual EU turnover above €7.5 above £25 billion, or UK turnover exceeding £1 billion.260 However,
billion or market capitalization above €75 billion (Article 3(2)(a)) ;250 at high turnover alone does not automatically trigger SMS designation. The
least 45 million monthly active EU users and 10,000 yearly active EU CMA must still investigate if undertakings fulfill the qualitative criteria
business users of its core platform services (Article 3(2)(b))251 and under Section 2(2).
meeting the user and turnover/market cap thresholds for three consec­ The DMCCb’s designation process exhibits greater focus on case-
utive years (Article 3(2)(c)).252 specific analysis relative to the EU Digital Markets Act. The proposal
These quantitative thresholds serve as a proxy indicating the entity does not mention a "rebuttable presumption" of SMS based solely on
likely satisfies the qualitative criteria of having significant market quantitative thresholds. Rather, thresholds determine whether plat­
impact, being an important business gateway, and holding an forms must notify the Digital Markets Unit (DMU) of potentially meeting
entrenched position. The DMA also implies that “an entrenched and SMS criteria. Upon this notification, the CMA then initiates an "SMS
durable position in its operations or the foreseeability of enjoying such a investigation" involving reasonable grounds assessment and public
position in the future occurs notably where the contestability of the consultation.261 At the end of this investigative procedure, the CMA
position of the undertaking providing the core platform service is must provide a final designation notice per Section 15(1). This must
limited.”253 contain: (a) "a description of the designated undertaking", (b) "a
The undertaking may rebut the presumption derived from the description of the digital activity with respect to which the designation
quantitative criteria by demonstrating that it does not meet the sub­ has effect", (c) "provision that the CMA has decided to make in reliance
stantive criteria set out in Article 3(1), even if it exceeds the quantitative on section 17 (existing obligations)", (d) "the CMA’s reasons for its de­
thresholds. Nevertheless, as explained in Recital 23, the burden of proof cisions under section 14(1)" to designate, (e) "the period (the “desig­
is on the undertaking to show that the presumption of compliance with nation period”) for which the designation has effect", (f) "circumstances
the quantitative thresholds should not apply. In this assessment, the in which the designation period may be extended", and (g) "circum­
Commission is advised to take into account only factors directly linked stances in which the designation may be revoked."262
to the quantitative criteria.254 This implies that quantitative criteria may Unlike the DMA and DMCCb, the new Section 19a of GWB does not
hold greater relevance in light of the consciously high standards of proof set specific quantitative thresholds for designating companies of "para­
mount significance for competition across markets" (PSC).263 The PSC
definition aims to capture platforms whose financial strength, data ac­
245
Thomas Tombal, ‘Ensuring Contestability and Fairness in Digital Markets
cess, and gateway position generate competition risks that cannot be
through Regulation: A Comparative Analysis of the EU, UK and US Approaches’
(2022) 18 European Competition Journal 468, 471 <https://doi.org/10.1080/
17441056.2022.2034331>.
246 255
Deutscher (n 9) 306. Belloso and Petit (n 90) 10 (“the DMA contains language that places a
247
DMA, art 2(2). heavy burden on the notifying firm to convince the Commission of investigating
248
DMA, art 19(1). a possible disapplication of the presumption”); Fletcher and others (n 122) 11.
249 256
DMA, art 3(1). DMCCb, sec 2.
250 257
DMA, art 3(2)(a) DMCCb, sec 2(2).
251 258
DMA, art 3(2)(b). DMCCb, sec 5
252 259
DMA, art 3(2)(c). DMCCb, sec 6(1).
253 260
DMA, recital 21. DMCCb, sec 7.
254 261
DMA, recital 23. DMCCb, sec 9(a) and sec 13.
262
DMCCb, sec 15(2).
263
Gesetz gegen Wettbewerbsbeschränkungen [Act against Restraints of
Competition] (GWB) § 19a (1).

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

addressed through existing competition law rules.264 The designation the digital platform operator."273 Article 9 states that companies oper­
involves a holistic assessment made by the Bundeskartellamt based on a ating platform models in these sectors will be subject to the regulation if
non-exhaustive list of criteria in Section 19a(1), including dominance in their annual revenue exceeds R$ 70 million.274 It is not specified
one or more markets, vertical integration, data relevance, and gateway whether the turnover to be considered is that of the economic group or
significance for third-party access.265 Notably, establishing a PSC posi­ only that of the undertaking based in Brazil. Also, there is no provision
tion does not require finding market dominance in every market the for refutation of the designation as a target of the regulation.
firms operate.266 Upon examination, PL 2768 lacks a substantive concept of “essential
The approach of establishing precise objectives for asymmetrical access control power.” This appears to be a critical deficiency within the
obligations in foreign regulatory initiatives represents a departure from draft meriting amendment. The foreign initiatives’ terminologies listed
conventional antitrust practices in two significant ways. Firstly, it in­ above attempt to capture unique features of platform economic power
volves refraining from employing formal market definition.267 Secondly, that relate to asymmetries within digital ecosystems. Should the aspi­
it entails addressing non-horizontal dimensions of competition, such as rations of PL 2768 involve instituting a gatekeeper-like framework, the
the interdependent relationships that the primary platform forms with requisite course of action would be integrating qualitative components
other economic entities and end consumers.268 that buttress and elucidate the fundamental essence of “essential access
However, the predominance of qualitative over quantitative criteria control power.” By relying solely on quantities criteria, PL 2768 risks
and the flexibility of the designation process influences how closely the both regulatory overreach and inefficacy.
normative concept aligns with conventional antitrust dominance PL 2768/2022 would benefit from the adoption of formal procedures
approach. The DMA’s emphasis on quantitative measures prompts allowing for greater flexibility in the designation of the regulated tar­
strong criticism that it views size ("bigness") as inherently problem­ gets, like UK’s DMCCb. At least the draft should have considered the
atic.269 Conversely, Section 19a of the GWB relies heavily on case- possibility of undertakings to rebut the designation on bases of more
specific analysis of each company’s dynamics, rendering designation qualitative assessment. Market investigations tools, for example, could
time-consuming and complex as traditional antitrust analysis.270 Simi­ help the authority gain a better understanding of how the targeted
larly, the DMCCb’s intricate procedural steps may allow undertakings to platform exert control over the digital ecosystems it orchestrates. In
strategically generate legal complexities.271 engaging in these investigations, PL 2768/2022 could benefit from
The breadth of designating regulatory targets reveals trade-offs when CADE’s case law, which has amassed significant experience in defining
diverging from traditional competition law methodologies. Blanket relevant markets and classifying digital platforms,
designation covering all of a company’s operations risks imposing ob­ The adoption of institutionalized designation procedures with
ligations on sectors where the gatekeeper has limited capacity to restrict increased administrative discretion would bring significant advantages
competition, especially with other dominant players present. The scope to PL 2768/2022. The draft should have at least envisioned the possi­
of designation consequently affects regulatory proportionality. For bility of undertakings to rebut the designation on bases of more quali­
instance, the DMA could enforce obligations universally across desig­ tative assessment. Also, market investigations tools could assist
nated platforms’ activities (Article 3(2)), including markets such as regulators in gaining a comprehensive understanding of how some core
cloud computing which currently exhibit an oligopolist setting, which digital platforms exercise control over their respective digital ecosys­
may not fit under the dominance lens.272 In contrast, frameworks like tems. PL 2768/2022 could draw upon CADE’s case law to enhance its
GWB 19a prohibit certain conduct only after proving paramount sig­ investigations, as CADE has accumulated substantial expertise in
nificance in a given market (Section 1), which will inevitably rise delineating relevant markets and categorizing digital platforms.275 By
contentious discussions about market definitions that may length the tempering the rigidly quantitative approach, nuanced investigative
applicable procedures. processes could enable proportionality, remedying competition distor­
In line with the foreign initiatives, PL 2768 adopts an asymmetric tions where platforms truly restrict contestability rather than purely for
regulatory strategy insofar as it focuses on digital platforms holding so- exceeding revenue thresholds without proper economic context.
called "essential access control power". In terms of its scope, Article 6(2)
defines the ex-ante measures are potentially enforceable against the
following types of platforms: "a) online intermediation services; b) on­ 5.4. Choosing between rules and standards
line search engines; c) online social networks; d) video sharing plat­
forms; e) interpersonal communication services; f) operating systems; g) The several regulatory foreign initiatives for digital markets also
cloud computing services; and h) online advertising services offered by differ significantly in terms of the scope and the shape of the ex-ante
regulatory obligations.276 While some regulatory frameworks impose
strict and comprehensive obligations that apply uniformly to all sectors
where core platforms operate, other approaches prioritize flexibility by
264
GWB § 19a (1). using adaptable codes of conduct and considering economic
265
GWB § 19a (1).
266 justifications.
Deuschle (n 200) 158.
267 The DMA rely on two different sets of regulatory obligations. Article
Alexandre De Streel and others, ‘Making The Digital Markets Act More
Resilient and Effective’ [2021] Recomendations Paper 1, 10–11; Rupprecht
5 delineates more-rigid "self-executing" obligations binding gatekeepers
Podszun, Philipp Bongartz and Sarah Langenstein, ‘The Digital Markets Act: universally across core services. In contrast, Article 6 sets "susceptible to
Moving from Competition Law to Regulation for Large Gatekeepers’ [2021]
EuCML 1, 63.
268 273
Lianos Ioannis and Carballa-Smichowski Bruno, ‘A Coat of Many Colours - PL 2,768/2022, art 6.
274
New Concepts and Metrics of Economic Power in Competition Law and Eco­ PL 2,768/2022, art 9.
275
nomics’ (2022) 18 Journal of Competition Law & Economics 795, 803–805. For a comprehensive overview of CADE’s experience in digital markets, see
269
Giuseppe Colangelo, ‘DMA Begins’ (2023) 11 Journal of Antitrust Conselho Administrativo de Defesa Econômica (CADE), ‘Cadernos Do CADE:
Enforcement 116; Mercados de Plataformas Digitais’ (CADE 2021) <https://cdn.cade.gov.br/Po
270
Organization for Economic Co-operation and Development (OECD) (n 130) rtal/centrais-de-conteudo/publicacoes/estudos-economicos/cadernos-do-cade
28; Franck and Peitz (n 153) 517. /plataformas-digitais.pdf>.
271 276
Oles Andriychuk, ‘UK: Analysing Digital Markets, Competition and Con­ Deutscher (n 9) 308.
sumers Bill through the Prism of the DMA’ (2023) 3 Concurrences Law Review
1, 6.
272
Bostoen, ‘Understanding the Digital Markets Act’ (n 106) 278–279.

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

further specification" obligations, which brings some scope for differ­ interpretations and ensure effective enforcement.
entiation and flexibility. While still ex-ante based, Article 6 signals more Article 10(3) of the proposed legislation, while addressing the crit­
procedural adaptability than Article 5.277 The UK model advocates for ical area of data use by digital platforms, falls short in precision and
an adaptable code of conduct which might render a full tailor-made enforceability, especially when compared to the more meticulous
regime for the undertakings holds SMS status.278 The Section 19a of approach of the DMA. The DMA’s Article 5(2) serves as a benchmark for
GWB also appears receptive to weighing economic justifications, akin to clarity and specificity in outlining unfair data practices, a standard that
traditional antitrust law, in the design of the regulatory obligations.279 PL 2768 could benefit from emulating. The DMA clearly delineates
A comparison of the various proposals highlights the advantages and prohibited practices concerning data processing. It explicitly prohibits
disadvantages of moving away from ex post antitrust enforcement. the processing of personal data by gatekeepers for online advertising
While rule-based approaches such as the Article 5 of DMA may provide services using third-party services.284 It further restricts the combination
faster responses to threats posed by large platforms, the open-ended of personal data from core platform services with data from other ser­
nature of antitrust laws gives their prohibitions more precision and vices offered by the gatekeeper or third parties.285 Additionally, it dis­
flexibility but less certainty and speed.280 A careful assessment of these allows the cross-use of personal data between different services provided
trade-offs is crucial in digital markets. The DMA, for example, has come by the gatekeeper.286 and prohibits using sign-in procedures to combine
under criticism for not being flexible enough to accommodate the dy­ personal data across services.287 . In contrast, PL 2,768′s Article 10(3)
namic nature of digital industries, albeit some very strict defenses are broadly stipulates the need for "appropriate use of data" but lacks
still allowed.281 On the other hand, timid proposals conservating high detailed guidance on what constitutes inappropriate or unfair practices.
standards of proof for the enforcers might undermine the experimental This vagueness could lead to interpretational challenges and enforce­
nature of the novel regulatory proposals.282 ment difficulties, as it does not provide clear boundaries or examples of
PL 2768 does not provide much detail on the scope of the obligations prohibited activities. Without these specifics, the provision may struggle
or the means of their enforcement strategies. Article 10 of the proposal to effectively regulate complex data practices in the digital market,
establishes four general principles.283 The first is merely ancillary and leaving ample room for platforms to engage in potentially harmful data
consists of a duty of "transparency and provision of information to manipulations that the legislation seeks to prevent.
ANATEL". The second one is the obligation of "equal and non- Article 10.4 of Brazil’s PL 2768, addressing the denial of access to
discriminatory treatment in the provision of services to professional business users, touches on a crucial aspect of digital market regulation but
users and end users". The third is the commitment to "appropriate use of lacks specificity. This provision parallels the antitrust concept of ’refusal to
the data collected in the course of its activities". The fourth one is the deal,’ particularly pertinent in the context of digital ecosystems. However,
obligation "not to deny professional users access to the digital platform". digital markets are more commonly affected by ’constructive refusals’
In addition, the final paragraph of this article states "ANATEL shall rather than outright denials. These occur when a dominant platform im­
impose obligations of accounting and functional separation, as well as poses suboptimal conditions on counterparties, subtly but effectively
measures to mitigate possible abuses of economic power, including restricting their market access. The legislation would benefit from
those related to portability and interoperability". explicitly addressing these subtler forms of refusal, as seen in Germany’s
The provisions set forth in Article 10(2) of the proposed legislation approach under Section 19a(2) of the GWB. The German law provides
present an opportunity for further clarification. The current non- concrete examples of constructive refusal that are more aligned with
discrimination clause, while aiming to ensure equitable treatment for digital market realities. For instance, it prohibits practices such as favoring
both business users and end users, could benefit from more explicit an undertaking’s own offers over competitors’, specifically by presenting
language, particularly in the context of self-preferencing in digital ser­ them more favorably or exclusively pre-installing them on devices.288 This
vices. In that regard, the article could be more precise in delineating the effectively targets the nuanced ways in which digital platforms can misuse
boundaries of admissible conduct for core platforms vis-à-vis third-party their market power to limit competition.
services. This observation is not to undermine the effort of the Brazilian The last paragraph of Article 10 gives ANATEL wide latitude to take
legislator but rather to suggest an enhancement in the articulation of the measures to curb the “abuse of economic power”. In this regard, data
rules. For instance, article 6(5) of the DMA specifically addresses self- portability and interoperability mandates are indeed valuable tools to
preferencing in certain contexts, such as ranking and related indexing improve competition in digital markets, but the bill gives no indication
and crawling platforms. The current Brazilian draft, in its broader of how these measures would be implemented. The accounting and
approach, potentially extends these non-discriminatory rules to a wider functional separation obligations can be very intrusive, and there is no
range of digital market activities. This expansive scope presents both a parallel to foreign regulatory proposals, which could make their
challenge and an opportunity: it allows for comprehensive application implementation almost unworkable.
but also necessitates careful wording to avoid unintended The legislation provides some guidance as to the enforcement stra­
tegies to be employed by the regulator. Article 11 provides that in
allocating the regulatory obligations of Article 10, the following shall be
277 considered: "I. Adoption of a technical, equal, and non-arbitrary basis";
Wolfgang Kerber, ‘Taming Tech Giants with a per Se Rules Approach? The
Digital Markets Act from the “Rules vs. Standard” Perspective’ (2021) 3 Con­
"II. Imposition of specific obligations for each type of digital platform,
currences Law Review 28, 30. according to its characteristics"; "III. Intervention proportional to the
278
Niamh Dunne, ‘Pro-Competition Regulation in the Digital Economy: The existing risk"; "IV. Evaluation of the impact, costs, and benefits of the
United Kingdom’s Digital Markets Unit’ (2022) 67 Antitrust Bulletin 341, 354 impositions"; and "V. Level of competition in the supply of each type of
(assessing that "the individualized rules would be tailored to the specific harms digital platform. "These general guidelines imply that ANATEL will have
anticipated to result from the particular position of SMS as identified during the a leading role in the elaboration of the regulatory regimes. PL 2768
designation process"). seems to provide for different codes of conduct for each type of platform.
279
Organization for Economic Co-operation and Development (OECD) (n 130) While these options add flexibility to the law, they also require strong
32; Botta (n 9) 6.
280
Akman, ‘Regulating Competition in Digital Platform Markets: A Critical
Assessment of the Framework and Approach of the EU Digital Markets Act’ (n
284
181) 113–114. DMA, art 5(2)(a)
281 285
Bostoen (n 59) 287 (discussing some very strict defenses allowed under the DMA, art 5(2)(b)
286
DMA). DMA, art 5(2)(c)
282 287
Andriychuk (n 271) 7. DMA, art 5(2)(d)
283 288
PL 2,768/2022, art 10. GWB § 19a (2), 1. (a) (b).

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V.O. Fernandes Computer Law & Security Review: The International Journal of Technology Law and Practice 52 (2024) 105937

regulatory governance principles regarding the transparency of the Ultimately, the minimalist obligations framework represents a
agency’s regulatory actions. missed opportunity to thoroughly analyze international regulatory ex­
Upon examination, PL 2768 does not delineate clearly whether un­ periments such as the DMA, German, and UK proposals in order to
dertakings can demonstrate objective economic justifications for obli­ inform Brazil’s approach. While extensively detailed obligations risks
gations neither which would be the applicable evidentiary standards for flexibility amidst digital volatility, PL 2768 may sacrifice effectiveness
that. This is particularly evident when examining Article 11′s items III, in failing to effectively address urgent concerns such as self-
IV, and V. While item III’s "proportional intervention" suggests imposing preferencing, which could be better targeted through more specific
tailored obligations on specific platforms, this clashes with Article 9′s non-discrimination clauses. Exploring alternative obligation designs
strictly quantitative designation. Moreover, item IV’s vague "impacts, could strengthen more immediate responses while retaining
costs and benefits" standard obscures whether efficiencies could justify adaptability.
certain prohibitions like self-preferencing. Finally, item V’s "competition Our analysis aims to enhance the formulation of PL 2768 by
levels" parameter risks incorporating more traditional competition law emphasizing the aspects that need to be recalibrated and promoting
tools like market definition and anticompetitive effects analysis which thoughtful legislative refinement. The proposal’s introduction without
runs against the intended goal of overcoming the pitfalls of these con­ evidence-based impact assessments or public consultations requires
ventional methodologies. immediate consideration of viewpoints from comparative law, regula­
Ultimately, PL 2768 exhibits considerable opacity regarding its tory economics, and competition policy scholarship. Engaging in
regulatory enforcement choices, engendering heightened unpredict­ constructive debates about the intricate trade-offs involved offers a way
ability and legal uncertainty. In an ostensible attempt to eschew the to find a balance between oversight and safeguards that are well-suited
purported rigidity of pioneering ex-ante frameworks such as the to the specific digital dynamics in Brazil.
DMA,289 the Brazilian proposal grants expansive administrative discre­ Implementing transparency and careful consideration in the rest of
tion to ANATEL. However, absent structured procedures and defined the legislative process provides opportunities for establishing an effec­
substantive standards, this discretion risks regulatory incoherence and tive pre-existing system that fulfills the desire for competition and
casts doubt on the legislation’s capacity to effectively address the novel fairness. Clearly defining goals, gaining a deeper understanding of
challenges in digital markets. platform economics, and drawing lessons from international trials could
greatly improve the proposal’s overall effectiveness. The decisions that
6. Conclusion lie ahead have a crucial impact on both the competitive environment
and the establishment of standards for future digital governance in
The legislative proposal PL 2768 represents a crucial moment in Brazil.
Brazil’s digital competition policy framework. The draft legislation
shows significant potential as an initial effort to establish ex-ante Declaration of competing interest
regulation specifically aimed at major technology platforms in the re­
gion. Nevertheless, our analysis has identified multiple areas that The authors declare the following financial interests/personal re­
necessitate recalibration in order to effectively accomplish its lationships which may be considered as potential competing interests:
possibilities. As the submission deals with issues related to competition policy, the
PL 2768 is lacking well-defined objectives that provide clear guid­ author considers it important to disclose that he is a Commissioner at
ance for its regulatory approach. Although it makes mention of several CADE’s Tribunal. The opinions expressed in the article are personal and
constitutional principles and values outlined in Marco Civil da Internet, do not reflect the official positions of this institution. The author did not
the specific implications for regulating platform power are not clearly and does not receive any funding for his research.
defined. This ambiguity creates uncertainty about whether obligations
should be in line with or deviate from the consumer welfare focus that Data availability
guides CADE’s competition law enforcement. It is crucial to provide
clarification on this matter, taking into consideration the constraints of No data was used for the research described in the article.
static efficiency measures in digital markets.
Moreover, PL 2,768′s predominant framing of platforms as akin to
essential facilities misaligns with contemporary understandings of dig­
Acknowledgement
ital market competition grounded in ecosystem economics. Unlike nat­
ural monopolies, platform power stems from deliberate business
The author expresses gratitude to several scholars who provided
decisions leveraging indirect network effects and integrated ties across
valuable feedback on earlier versions of this article or participated in
markets rather than exogenous constraints. This distinction necessitates
productive discussions on the subject at different academic conferences,
appropriately tailored oversight attuned to value creation logics in these
particularly Professors Ioannis Lianos, Oles Andriychuk, Friso Bostoen,
ecosystems.
Nicolo Zingales, and Caio Mário da Silva Pereira Neto.
In line with foreign regulatory initiatives, PL 2768 pursues an
asymmetrical approach targeting major digital platforms holding sig­
nificant gateway power over multi-sided markets. However, the pro­ Victor Oliveira Fernandes is a Professor of Economic Law and Compe­
posal currently lacks substantive qualitative criteria elucidating the tition Law at the Brazilian Institute for Teaching, Development and
essence of “essential access control”. By solely using revenue thresholds Research (IDP) and a Commissioner at Brazil’s Administrative Council
above R$70 million, risks of over-inclusion and under-inclusion arise for Economic Defense Tribunal (CADE). He holds a Ph.D. in Commercial
regarding platforms genuinely restricting ecosystem contestability. Law from the University of São Paulo Law School (USP).

289
’Explanatory Memorandum to PL 2768/2022′, p 9.

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