Amid strained talks between U.S. President Donald Trump and Brazilian President Luiz Inácio Lula da Silva over trade and free speech, American tech companies have found themselves the target of Brazilian regulators.
Last year, the social media platform X (formerly Twitter) was forced to pay significant fines and follow stricter account suspension requirements after temporarily halting services. Meta was fined $500 million over “inadequate protections for minors.” Apple now faces similar legal challenges, with Brazilian competition watchdog CADE recently suggesting sanctions against Apple’s business practices.
American tech companies already face an uphill battle doing business in Brazil, but that climb is only set to get steeper: a 2022 bill that would expand the regulatory scrutiny of American tech companies has regained traction following a similar proposal by the Ministry of Finance late 2024.
These proposals, supported by Lula da Silva’s administration, would place Brazil under an “Ex-Ante” regulatory framework—moving from a reactionary stance to one more proactive, intrusive, and critical of American companies.
Between the two proposals, Brazilian agencies would have far greater power to scrutinize American companies. The 2022 bill designates companies “essential access control power holders” under arbitrary requirements, tailored to disproportionately qualify American digital service providers for strict regulatory oversight, mandatory “inspection fees,” and fines reaching 2% of national revenue. The Ministry of Finance’s proposal furthers this, empowering CADE to investigate companies with the assumption of guilt, requiring American companies to justify business practices, while raising fines from 2% to 20% of national revenue.
Combined, Brazil’s “Ex-Ante” proposals represent a regulatory threat similar to Europe’s infamous Digital Markets Act (DMA). The DMA has been used to target American companies in Europe, extracting extortionary fines using arbitrary language. Like the DMA, Brazil’s use of vague, shifting criteria leaves American companies vulnerable to politically motivated rulings.
Brazil must not replicate the failures of the DMA. Overly strict digital regulations harm competitiveness and stifle innovation, replacing investment and growth with uncertainty and the heavy burdens of compliance.
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Author: Caden Hubbs
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