The New Substitute for Brazil's Digital Markets Bill

Deputy Aliel Machado's preliminary substitute for PL No. 4,675/2025 keeps the bill's ex ante architecture intact, but fences in some of the discretion it gives the regulator.

On July 8, 2026, Deputy Aliel Machado – the rapporteur – shared a substitute to the Bill No. 4,675/2025.^[1] The substitute preserves the Bill's central design: CADE would designate certain companies that operate in digital markets as “economic agents of systemic relevance” and could then impose special obligations on them, administered by a new Special Superintendence for Systemic Relevance, Free Competition and Consumer Protection in Digital Markets. What changes is how much room the substitute leaves the authority to define and apply that regime.

Why this matters?

CADE's mission is to preserve competitive markets so that consumers, businesses, and innovators benefit from fair competition. The changes discussed throughout this blog move in that direction to varying degrees. Some, like the narrower merger notification duty and the shorter designation term, bring the text closer to established international benchmarks. Others, like the undefined qualifying terms and the open question of scope, leave CADE with discretion that could cut against the predictability the Bill otherwise seeks to provide. 

Whether the regime as a whole delivers its objectives will depend less on the text as filed than on the process still ahead: the extent to which the Bill's remaining open questions are tested through democratic debate, with meaningful input from academics, the private sector, and civil society, before its terms are finally settled.

Narrowing some, but not all, of the regulator's discretion

Several provisions that, in the original text, left room for a highly discretionary analysis have been rewritten as more precise rules, though, as discussed below, this precision is uneven across the substitute’s criteria. The provision creating the Superintendence now expressly bars CADE from granting the new Superintendence sanctioning powers, or from expanding, through internal resolution, either the designation criteria or the categories of special obligations set out in the law. 

The quantitative thresholds for designation – R$ 50 billion in global annual revenue or R$ 5 billion domestically – could previously be altered by a joint act of the Ministry of Justice and the Ministry of Finance; under the substitute, they may only be adjusted periodically in line with the variation of the IPCA, Brazil's official consumer price index, replacing what had been more open-ended adjustment authority. 

A related change concerns how obligations are scoped once imposed: the obligations could previously be delimited to specific services or products offered by the designated agent, but the substitute makes this mandatory, so that obligations must now be tied to the specific services identified in the administrative proceeding. 

Taken together, these changes narrow CADE’s interpretive latitude on paper. In practice, however, key qualifying terms remain undefined. What, exactly, characterizes “dependence” (Article 47-C, §2º, item IV) - a high volume of users routed through the platform? Technical integrations that are costly to unwind? Contractual exclusivity? Similarly, what distinguishes a “digital ecosystem” (item III and VI) from a company that simply offers multiple digital products? Where is the line for what counts as a “gatekeeper” (item VI)? 

Absent further specification, CADE retains considerable room to answer these questions case by case. The substitute’s criteria are thus more demanding in form than they may prove to be in application.

Merger notification duties realigned with the DMA standard 

The original text required designated agents to notify the Special Superintendence of all merger and acquisition transactions, including deals that fall below Brazil’s Antitrust Law ordinary mandatory-notification thresholds, a standard that, in practice, went beyond even what the EU’s Digital Markets Act imposes on gatekeepers. The substitute brings this obligation closer to the DMA's own framework: designated agents must now inform the Superintendence of such transactions on a purely informational basis, rather than submit them for prior review.

A textual ambiguity in the qualitative criteria

The substitute also changes how the qualitative criterias that accompany the revenue threshold are meant to be assessed. Where the original text allowed CADE to designate an agent based on the presence of any one relevant characteristic, the new text requires a “joint and reasoned analysis” of the criterias, suggesting a more integrated review of the qualitative side of the designation test. 

There is, however, a textual tension worth flagging. The list of qualitative criteria is still connected by “or” rather than “and”, which is the ordinary sign of an alternative, not a cumulative, requirement. It is not clear from the text alone whether the “joint analysis” language means that CADE must weigh whichever factors are present together in its reasoning, even if only one applies, or whether it signals an actual need for more than one factor to be simultaneously verified.

A shorter, revisable designation

The maximum duration of a systemic-relevance designation falls from ten to six years. This partially follows the recommendation ITS Rio made in the first report^[2], which proposed replacing the fixed ten year term with a model of mandatory periodic reviews, citing the DMA's three year review cycle and the DMCCA's five year fixed term with early reassessment as reference points.

The substitute did not adopt a pure periodic review model. Instead, it shortened the fixed term itself and added a non-mandatory review window. Two years after the Tribunal's decision, CADE may open a fresh administrative proceeding to reassess a designation, or the special obligations attached to it, if significant market changes point to a relevant shift in the competitive conditions that justified the original decision.

The result addresses part of the concern the first report raised, since a shorter term and an earlier review point both reduce the risk of an outdated designation persisting unchanged. However, the measure does not make review by CADE mandatory, nor does it specify how many times such review may occur within the designation period, leaving relevant gaps in the law's interpretation.

New institutional tools: market analysis and an advisory council

The substitute adds two mechanisms with no equivalent in the original Bill. The substitute creates a standalone, non-sanctioning “digital market analysis procedure”, which the new Superintendence may open on its own initiative or by determination of the Tribunal to study the competitive dynamics of digital markets, ecosystems, services or activities. The law is explicit that its conclusions do not by themselves produce a designation, an obligation or a sanction, and that it is not a mandatory step before either of those proceedings. 

The substitute also authorizes CADE to establish an Advisory Council on Competition in Digital Markets, consultative and non-binding, with plural representation from academia, civil society, the productive sector and public authorities. At least half of its members must come from academic or research institutions, or from non-profit civil society organizations working on competition, the digital economy, consumer protection, digital rights or innovation.

Looking ahead

One question the substitute leaves untouched is the scope of the regime itself. Neither the original text nor the substitute defines what counts as a “digital market” for purposes of designation. Unlike the DMA, which anchors its application to an enumerated list of “core platform services”, the Brazilian text leaves the concept undefined, so the task of delimiting the object of regulation falls to CADE, to be worked out case by case as designation proceedings unfold. 

The substitute tightens several aspects of how CADE exercises its discretion once a market has been identified as digital, but it does not narrow, or even address, the prior question of which markets qualify as such in the first place.

The eventual need for carve-outs focusing on certain sectors raises similar questions. The substitute defines a “digital ecosystem” as comprising multiple complementary products, services, or assets. Does that description also fit a major financial institution that offers banking, payments, insurance, credit, and investment services through an integrated app? If so, would such an institution fall within the scope of a regime the rapporteur intended for large technology platforms, rather than the financial sector? 

Questions like these illustrate why the boundaries of the regime, not just the criteria applied once those boundaries are set, still call for further precision. 

Precision of this kind, on where the regime's boundaries lie and not only on how CADE applies them once set, is exactly what a public hearing could help resolve.. On July 6, 2026, Deputy Rodrigo da Zaeli filed a request before the House's Economic Development Committee (CDE) for a public hearing on the economic impacts of digital market regulation under the Bill.^[1] Granting that request would give economists, industry representatives, civil society and academics a formal channel to engage with issues such as the one raised here, before the Bill's terms are further settled. 

The House of Representatives has already granted the Bill an “urgent” status that could trigger a voting in the plenary at any given time. How Brazil addresses competition in digital markets, whether through this Bill or through CADE's existing toolkit, remains an open question with real consequences for the country's regulatory puzzle. Because of that, time spent on that kind of deliberate, well-informed debate is time well spent, ensuring a path to a more considered and durable piece of legislation. As CADE's former president put it in a recent public statement, the National Congress should broaden the dialogue with the Brazilian society before the Bill’s final approval.^[3]

References

[1] House of Representatives. Bill No. 4,675/2025. Available at: https://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2562481. 

[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.

[3] LinkedIn. CADE’s former president, Gustavo Augusto Freitas de Lima, post. Available at: https://www.linkedin.com/feed/update/urn:li:activity:7480713337811451904/.