Brazilian Telecommunications Agency (Anatel) and Ministry of Finance start public consultations to promote dialogue on digital platform regulation

​On January 15, 2024, Anatel published Subsidy Request No. 26/2023, a public consultation aimed at promoting dialogue with those interested in the regulation of telecommunications users’ duties, which had already been the subject of Subsidy Request No. 13/2023. At the time, Anatel was seeking input on the need for specific rules for large users or those requiring special regulatory treatment. After receiving contributions from civil society, Anatel identified certain regulatory issues that required further investigation and evaluation, which led to the publication of Subsidy Request No. 26/2023.

1. Anatel addresses the following topics in the consultation:

2. impact on telecommunications networks;

3. regulatory imbalance among digital ecosystem players,

4. disparities in consumer protection between traditional and digital environments,

5. evidence of unfair competition among digital ecosystem players,

6. disproportion of investments made by each digital ecosystem player to expand and promote network infrastructure sustainability, and

7. contrasts among different digital ecosystem players regarding transparency measures.

Anatel highlights problems related to the inappropriate use of telecommunications networks, regulatory asymmetries involving Content Distribution Networks (CDNs) and Value-Added Service providers (VAS), and the feasibility of expanding the telecommunications infrastructure. The document also outlines preliminary alternatives for solving complex issues, including the adoption of a fair share approach.

The Ministry of Finance is closely monitoring the growing discussions on digital platforms. This heightened interest stems from the increasing number of cases involving digital platforms pending before the Administrative Council for Economic Defense (CADE) in recent years. Additionally, the adoption of new regulatory initiatives in more mature jurisdictions has sparked further interest. Against this backdrop, the Ministry seeks a better understanding of the digital platforms scenario from economic and competition perspectives.

In this context, on January 19, 2024, the Ministry of Finance published Subsidy Request No. 1/2024. This consultation raises questions about the potential need to amend the current Brazilian competition law, Law No. 12,529, of November 30, 2011, and to regulate digital platforms, among other aspects.

The Ministry of Finance’s questions focus on the following topics:

1. regulatory purposes and rationale,

2. sufficiency and adequacy of the current economic regulation and competition model,

3. design of a potential pro-competition economic regulatory model, and

4. institutional framework for regulation and oversight.

The following questions raised in the Subsidy Requests are worth highlighting:

Anatel – Subsidy Request No. 26/2023

• Considering the period of the Covid-19 pandemic and the measures taken to mitigate the increase in data traffic due to isolation measures, which impacted the volume of data traffic, especially videos (streaming, video calls, online meetings and events, distance learning, among others), how is it possible to assess future trends of data traffic increase and possible risks of a misalignment between demand and network capacities, with an impact on service provision, particularly on the quality of services provided?

• From the perspective of telecommunications networks, what steps could be taken to cut down the number of nuisance calls?

• Considering the regulatory asymmetry between services provided by digital platforms and those offered by telecommunications providers, which element is deemed the most damaging?

• From the economic regulation perspective, how can models such as zero rating, supported access, and data rewards, among others, affect the markets involved, either positively or adversely?

• What are the main flaws in digital markets where competition exists between substitute services and traditional telecommunications services?

• What measures should Anatel take to promote fair competition among VAS that could substitute traditional telecommunications service providers?

Ministry of Finance – Subsidy Request No. 1/2024

• What economic and competition reasons justify the regulation of digital platforms in Brazil?

• Is the current legal and institutional framework for competition, Law No. 12,529/2011, sufficient to cover digital platform dynamics? Are there competition and economic issues not properly addressed by current laws? What improvements are required for the Brazilian Competition System (SBDC) to handle digital platforms more effectively?

• Are the definitions in Law No. 12,529/2011 regarding market power and abuse of dominant position sufficient and adequate to identify digital platforms’ market power? If not, what are the limitations?

• To what extent does competition law provide mechanisms to mitigate competition concerns arising from vertical or complementary relationships on digital platforms? What potential unfair competition practices might not be identified or remedied through the application of traditional antitrust tools?

• In relation to merger control, do the parameters for submitting and analyzing mergers require any amendment to improve the identification of potential damage to competition in digital markets?

• Does Brazil face risks by not adopting a new pro-competition regulatory model, particularly considering that other jurisdictions have already adopted or are in the process of adopting specific rules for digital platforms, given that the largest platforms have a global presence? What are the potential benefits of adopting a similar regulation in Brazil?

• Is there a need for a specific regulator to monitor and regulate large digital platforms in Brazil, considering only the economic and competition law aspects?

Anatel’s Subsidy Request No. 26/2023 will be open for contributions until April 15, 2024, through Anatel Participa, while the Ministry of Finance’s Subsidy Request No. 1/2024 will remain open until March 18, 2024, through Participa + Brasil.