The Ghost in the Machine:The Undefined "Digital Market" in Bill 4675/25

Bill N. 4675/25 in Brazil uses the term "digital markets" 83 times throughout 13 pages of text. It does not define it once.

This omission is not merely a technical oversight; it lies at the heart of a profound regulatory challenge. Brazil is currently debating a shift from a reactive (ex post) competition regime to a preventive (ex ante) framework designed to target "systemically relevant actors". Yet, as Bill 4.675/2025 moves through the legislative process at a rapid pace, the very foundation upon which it is built—the concept of a "digital market"—remains a contested and elusive label.

A Regulatory Label in Search of an Economic Identity

Historically, competition or antitrust law has relied on functional economic analysis.^[1] The relevant question for regulators has traditionally been whether a service constrains or is constrained by economically viable alternatives. By anchoring new regulations in the broad notion of "digital markets", the Bill risks obscuring how competition actually functions.

Digital technologies today permeate virtually every economic sector, from retail and banking to transportation and media. This reality raises a fundamental question: where does the "digital" start and end? For example, a food delivery app does not only compete with other apps; it competes with the offline delivery services of local restaurants and even traditional walk-in consumption.^[2]

Treating "digital" as a self-contained category risks creating a regulatory silo that ignores the fluid boundaries of modern commerce.

The Problem of Selective “Digitalization”

The challenge of scope becomes even clearer when examining actors that were not "born digital" but have rapidly digitalized. Major pillars of the Brazilian economy, such as Vale in mining or Petrobras in oil and gas, now rely heavily on sophisticated digital infrastructures and data-driven models. However, these actors are typically not captured by the current convention of what constitutes a "digital market".

Instead, the term is often used selectively to denote specific platform-mediated environments, app ecosystems, or sometimes digital advertising. This linguistic convention tracks particular competitive settings (such as those characterized by strong network effects) rather than digitalization itself. Without a stable conceptual criterion, infrastructure services like cloud computing or data storage, for example, exist in a gray zone, treated as part of a so-called "digital market" in some contexts or as a mere input in others.

Legal Uncertainty

The absence of a clear definition for "digital markets" has direct implications for the rule of law. A regulatory framework built on an undelimited category necessarily grants substantial discretion to the Administrative Council for Economic Defense (CADE) in determining its own scope of application. This ambiguity creates a risk of "regulatory creep", where intervention extends beyond its intended scope, potentially chilling innovation and investment in a critical sector of the Brazilian economy. 

Moreover, it is worth stressing that Bill 4.675/2025 seeks to import solutions from international models like the European Union's Digital Markets Act (DMA) and the UK's Digital Markets, Competition and Consumers Act (DMCCA). However, these frameworks are themselves the subject of intense academic and institutional disagreement regarding their long-term effects on economic dynamism. By adopting a label that lacks clear legal and economic boundaries, Brazil risks building its new regime on unstable foundations.

Looking Ahead

Ultimately, the ambiguity surrounding "digital markets" is not a puzzle to be solved, but a structural flaw that may be inherent to the project. The term acts as a "ghost in the machine". In other words, an elusive, phantom concept that animates the entire Bill but disappears whenever one tries to pin it down with legal precision. 

By building a massive administrative apparatus around an undefined term, the Bill ensures that the "digital market" remains a spectral presence: it might come to be felt through heavy-handed interventions and regulatory discretion, but never fully visible or predictable for the agents being regulated.

This lack of a clear definition is likely an unsolvable paradox. If the definition is too broad, the law becomes a tool for limitless state intervention across the entire economy; if it is too narrow, it becomes obsolete before the ink is dry. 

As a result, Bill 4675/25 is not merely a flawed piece of legislation waiting for a better glossary. In the rush to regulate the future, Brazil is creating a regime haunted by a concept that exists in the minds of regulators but finds no stable ground in the reality of its economy.

Notes and References

[1] In this sense, antitrust literature has emphasized, technological labels cannot replace functional economic analysis. See HOVENKAMP, Herbert. Antitrust and eMarkets. Stanford Law & Policy Review, v. 36, 2025. Available at: https://scholarship.law.upenn.edu/faculty_articles/590/.

[2] ITS Rio. Foundations and Influences of the Digital Markets Regulation in Brazil. Available at: https://itsrio.org/wp-content/uploads/2017/01/Relatorio-Decodificando-Ingles.pdf.