Why Brazil Should Rethink Its Digital Markets Bill

Lambrini Kolios
Director, Brazil-U.S. Business Council, U.S. Chamber of Commerce

Published

September 26, 2025

Picture this: You’re in São Paulo, Brazil, trying to have a conversation with someone who speaks a different language. Through your headphones you can hear real-time translation, making communication seamless. This isn’t a futuristic dream; it’s technology that exists today. Just last week, Apple launched its groundbreaking Live Translation communication feature.

Now imagine you are in the European Union (EU), where 27 countries speak dozens of languages. Yet, precisely where this technology would be a game-changer, EU consumers are unable to benefit, not because of technical limitations, but because of regulations resulting from the EU’s Digital Markets Act (DMA).

The DMA imposes strict rules on a handful of the largest – primarily U.S. headquartered –tech companies, such as requirements for interoperability and data-sharing with competitors. For proprietary features like Apple’s Live Translation, this not only creates significant compliance hurdles, but also diminishes the incentive to invest in and deploy groundbreaking technologies in the EU. The result? Consumers are left behind.

Brazil now risks following Europe’s path. The Brazilian government has proposed new legislation, Bill nº 4675/2025, often referred to as its own version of the EU Digital Markets Act. The legislation, which aims to regulate large digital platforms, raises significant concerns for Brazil’s economy and consumers, while layering on more risk to its relationship with the United States.

A Misguided Approach to Competition

Supporters of Brazil’s proposed digital markets bill argue that it will create a more level playing field for smaller competitors. However, the bill’s approach falls short. Like the DMA, it uses an ex ante approach to target companies rather than addressing harmful or exclusionary conduct. The bill designates certain firms as "economic agents of systemic relevance," imposing special obligations based solely on revenue thresholds. This designation applies to technology companies with annual global revenues exceeding R$ 50 billion ($9.5 billion USD) or domestic revenues over R$ 5 billion ($950 million USD), criteria that— also like the DMA— predominantly capture U.S. companies. By singling out a narrow group of large platforms, the bill would foster a discriminatory regulatory environment, discourage investment, and undermine the very competition it aims to promote.

Paradoxically, the legislation could entrench market dominance rather than disrupt it. A dependency dynamic is created by requiring large platforms to share their technology, data, or infrastructure with smaller firms. Instead of encouraging growth among new players, this reliance reinforces the position of established platforms, making them even more central to the digital ecosystem.

For new entrants, the barriers to entry become even higher. To compete, they would need to match the benefits and services provided by the dominant platforms, which is a significant challenge that ultimately discourages the emergence of new competitors. The bill risks reinforcing the status quo, leaving consumers with fewer choices and less innovation.

Harm to Consumers and Innovation

Among the most concerning aspects of the proposed legislation is its potential to restrict or prohibit “vertical integration,” a business model that enhances convenience and efficiency for consumers. A prime example of vertical integration is Google’s incorporation of Google Maps into its search engine. When users search for a landmark or business on Google, they are provided with directions, reviews, and other relevant information directly within the search results.

By offering the integration of its search engine with its mapping service, Google eliminates the need for users to copy and paste an address found via search into a mapping app, creating a streamlined user experience. However, under the DMA, this consumer convenience is now illegal in Europe. Restricting such common integration practices would fragment user experiences and diminish the value of digital services that consumers have come to rely on. Further compounding these concerns are the bill’s vague compliance requirements, which offer little clarity on how companies should meet their obligations. This lack of legal certainty would force companies to divert resources away from product development and service enhancements toward navigating complex and ambiguous regulatory demands. The EU’s implementation experience with the DMA demonstrates how such uncertainty can create significant compliance challenges, with companies struggling to adapt to ever-changing rules.

Lastly, while the bill claims to be modeled on global best practices, the reality is that no international consensus on a global best practice exists. Top economies including Japan, Germany, Korea, and the UK are all actively experimenting with how to effectively regulate digital markets. While there remain serious concerns with these countries’ approaches, all of them have decidedly chosen to chart a different course than replicating the EU DMA. Other countries like India and the United States have weighed DMA-like proposals and decided to reject these flawed policy approaches. Brazil should not rush to emulate a model that remains a contentious work in progress.

Compounding the Threat to U.S.-Brazil Relations

U.S.-Brazil relations face growing challenges as 50% tariffs escalate trade tensions, while divergent policy approaches and mounting political pressures compound the strain on the bilateral relationship. Among the key issues driving the U.S. government’s Section 301 investigation into Brazil’s unfair trade practices are concerns over its digital policies. Brazil’s proposed legislation, which introduces aggressive measures targeting digital platforms, risks further destabilizing this relationship. Bill nº 4675/2025, would undermine the very goals Brazil seeks to achieve: innovation, competition, and consumer welfare. Its current form threatens to entrench market power, discourages investment, and will further strain Brazil’s already fragile relationship with United States.

The Brazilian government must carefully reconsider the broader implications of its digital markets bill. Instead of replicating the EU’s flawed framework, Brazil should chart its own path—one that can be a model for the rest of the Western Hemisphere. A forward-looking, inclusive regulatory framework would not only foster domestic growth but also position Brazil as a global leader in shaping effective digital governance.