Recently, Brazil’s Administrative Council for Economic Defense (CADE) held a public hearing to discuss digital platform regulation—an issue with enormous implications for the ACT | The App Association community both in and outside of Brazil. The App Association has worked with governments around the world to bring small business innovator viewpoints to the fore on regulation proposals to ensure that the platforms’ key features that have propelled our community’s immense growth and job creation remain intact: cost-effective access to a global market; built-in consumer trust mechanisms; and bundles of services that reduce overhead costs.
Brazil’s proposal to adopt a digital platform regime mirroring that of the European Union in its Digital Markets Act handcuffs some of the most important features of digital platforms to small businesses, and more broadly reduces competition and innovation. (We explained further in detailed comments filed with CADE – EN and PR.) And we have urged Brazil and other governments considering adopting DMA-like approaches that they can and should benefit from lessons learned from the EU’s mistakes in DMA policy and implementation, which have only increased compliance costs and barriers for small developers. (For more on DMA at its first implementation anniversary, see here.)
Unfortunately, the digital economy small businesses so impacted by Brazil’s proposals were not included in the hearing. Instead of offering a diverse range of perspectives, CADE’s hearing was dominated by large companies, with no meaningful representation from independent developers and small businesses—including operating in Brazil who applied to participate and were excluded.
CADE has allowed the public debate on platform regulation in Brazil to be distorted by excluding the voices of entrepreneurs and innovators from this debate. Without their input, any new rules risk favoring entrenched players—whose views were indeed fully featured during the hearing— while making it harder for new entrants to succeed.
CADE has a responsibility to include small business developers in the conversation. Our community’s experiences and insights are crucial to understanding how new regulation of digital platforms impact market access, innovation, and competition.
If CADE is serious about fostering digital competition, it must engage with all stakeholders—not just large companies and one-issue popup coalitions representing the same. Fortunately, CADE has ample opportunity to meaningfully engage the small business developer community through further formal and informal hearings and calls for input. The App Association commits to work with CADE to bring our community to the table to ensure that Brazil’s digital economy isn’t held back by its policy frameworks.
Read the Portuguese translation here and here.