*Originally published in JOTA.

**This is an AI-powered machine translation of the original text in Portuguese.

The main interlocutors in the debate on competition in digital markets—academics, economists, lawyers, authorities, and technology specialists—gathered in Brasília on February 17 in an event organized by the Lawgorithm Association together with the Legal Grounds Institute.

The objective was to debate the regulation proposal from the Ministry of Finance and, in particular, practices related to the management of operating systems for mobile apps. The topic is crucial on the regulatory agenda for the digital sector, which also includes the regulation of artificial intelligence and the fight against misinformation.

Role of Cade in Regulating Digital Markets

The first panel discussed what role Cade should play in regulating digital markets, bringing together Felipe Roquete (Cade), Ravvi Madruga (Ministry of Economy), Sílvia Fagá (Ecoa Economic Consulting), and Vinicius Klein (UFPR).

Both in Bill 2768/2022 and in the Ministry of Finance’s proposal, the imposition of general obligations or prohibitions on large digital platforms is accepted. However, while Bill 2768/2022 establishes more generic obligations in the law to be monitored by Anatel, under the Ministry’s proposal Cade itself would impose more specific obligations on sector agents and also carry out the monitoring.

As Ravvi Madruga pointed out, considering that Cade is no longer merely a repressive administrative tribunal, the new power to create obligations would add to Cade the role of a sui generis regulatory agency. This is because, unlike other agencies, it would not strictly regulate an entire economic sector but rather different types of services in the digital environment, and the imposed obligations would be directed at specific agents rather than all agents in the so-called digital markets.

There was also discussion on whether the legislation, which still expressly characterizes Cade as a judicial body, should evolve to explicitly recognize its nature as a regulatory body. This would have consequences in terms of the current legislation applied to agencies and even in relation to bills—such as the one regulating artificial intelligence—that assign specific competencies to regulatory agencies to oversee the use of that technology.

Other difficulties mentioned concern the risk of error in regulation, as highlighted by Sílvia Fagá, given that there is no impact analysis when imposing the obligations and that all interested parties who might be affected by the regulation should be involved. This desideratum contrasts with Cade’s tradition of conducting investigations against specific agents.

Thus, regulation would have to choose between imposing obligations on types of services, with regulatory impact analysis, or imposing obligations on specific platforms, which could require an efficiency analysis—making the process similar to the imposition of ex post obligations typical of administrative sanctioning processes. The major challenge identified lies in extending Cade’s powers while ensuring sufficient flexibility in any future regulation so as not to hinder technological development.

Mobile Operating Systems and Competition

The second panel gathered Amanda Flávio de Oliveira (UnB and consultant at UNCTAD/UN), Cesar Mattos (economist and consultant at the Chamber of Deputies), and Mario Zúñiga (professor at the Pontificia Universidad Católica del Perú and former advisor to Peru’s antitrust authority). The debate highlighted the difficulty of defining relevant markets and competitive relationships in the digital environment. For example, Mario Zúñiga argued that systems like Android and Apple’s iOS are competitors and that the analysis of the restrictions imposed by these systems’ operators on apps should consider mutual competitive pressures.

Cesar Mattos, for instance, pointed out that restrictions preventing the redirection of purchases or downloads outside the platform provide more security, and that this is a competitive factor in that consumers choose Android or iOS based on their respective qualities—flexibility on one hand, and security and privacy on the other.

Amanda Flávio questioned the extent to which this market presents new competitive issues, or whether it is possible to find solutions to these dilemmas by drawing analogies with traditional cases, such as shopping centers, where retailers are also prohibited from diverting consumers to make purchases outside the shopping center.

The discussion also covered the intersection and boundaries between antitrust and industrial policy for promoting innovation and productivity within the digital economy. The current political context was underscored, with Cesar Mattos mentioning the Draghi Report, which questions the excess regulation of the European approach and how excessive interventions might discourage a country’s innovation and competitiveness in digital markets.

Mobile Operating Systems, Security, and Privacy

The final panel, which gathered Miriam Wimmer (ANPD), Marcos Lima (economist and partner at M&A Economic Consulting), and Mônica Fujimoto (professor at IDP and lawyer), delved into the topic of protecting security and privacy in operating systems—objectives that are weighed against the defense of competition in cases involving operating systems.

Miriam Wimmer stressed the importance of analyzing the negative externalities of each regulatory measure—that is, potential privacy and security externalities caused by measures imposed in the interest of competition, or the expansion of market power of a given agent as a result of measures imposed for the protection of personal data.

One challenge highlighted for this analysis was the information asymmetry between the regulator and the regulated, which is accentuated in digital ecosystems. To this end, cooperation between ANPD and Cade was considered essential, although not without challenges for public administration.

Conclusions

At the end of the event, it became clear that the topic involves broader issues, necessitating a clearer investigation into what the intended objective of using competition defense policy in relation to digital ecosystems would be.

Would the goal be to effectively correct market failures, or to bring more balance in the distribution of revenues and opportunities between large platforms and other agents that complement their activities? Or is the real objective even to prevent the concentration of political and informational power, thereby promoting a democratic public sphere?

In any case, there is consensus that the regulation of competition in digital markets and the regulation of content moderation and misinformation in digital services are distinct issues that should not be conflated in regulatory efforts.

The event was recorded and can be accessed on the YouTube channels of the Lawgorithm Association and the Legal Grounds Institute.