Brazil’s long-anticipated Bill 4,675/2025, which President Luiz Inácio Lula da Silva’s government submitted last month to Congress, proposes to enact ex-ante regulation for digital markets (I offered an initial assessment here). While presented as a natural evolution of competition law, the proposal would instead alter some foundational aspects of the Brazilian antitrust framework.
The measure would amend Brazil’s existing Competition Law, rather than create a standalone regime like the European Union’s Digital Markets Act (DMA). But in doing so, it establishes an entirely new set of competition goals that risks undermining the existing economically grounded enforcement system—or, at least, conflating the ex-post and ex-ante enforcement of antitrust rules.
Consumer Welfare as the Compass of Brazilian Competition Law
While Brazil’s Competition Law (Law 12.529/2011, or BCL) does not explicitly define its objective, the law’s structure and Administrative Council for Economic Defense (CADE) case law reveal a clear lodestar: the promotion of consumer welfare.
Article 36, § 1º lays out this foundation by clarifying that a dominant position achieved “by natural process” or by being the “most efficient economic agent” is not illegal. This embeds an efficiency-based presumption: competition law intervenes only when conduct harms consumers through higher prices, lower quality, reduced output, or diminished innovation. In other words, size in itself, when acquired via efficiency—i.e., selling the best available product to consumers and achieving dominance of a relevant market—is not deemed to infringe the BCL.
The same logic governs merger control. Article 88 § 6º permits the approval of otherwise anticompetitive mergers (defined in Art. 88, § 5º) only if they create verifiable efficiencies and a “relevant portion” of the gains is passed on to consumers. This “non-negative net effect on consumers” standard, which CADE formalized in its 2016 Horizontal Merger Guidelines and 2024 Vertical Merger Guidelines, aligns Brazilian competition law with the mainstream global consensus: a merger or conduct is condemned only if consumers are worse off as a result of a specific conduct.
This interpretation also finds support in CADE’s case law and institutional practice. As Eric Hadmann Jasper observes in his empirical study of how CADE interprets the BCL’s goals:
An analysis of Brazilian competition law and CADE’s regulations and documents indicates, at least at this stage of the research, a diffusion of national antitrust principles/purposes (i.e., freedom of initiative, free competition, social function of property, consumer protection/consumer welfare, repression of abuse of economic power, efficiency, and protection of the competitive process) and a slight primacy of consumer welfare, at least with regard to the analysis of mergers. Finally, an examination of CADE precedents reveals a diffuse list of purposes, with emphasis on “consumer welfare” (6 mentions, including the expression “maximization of economic value to the consumer”), protection of competition (3 mentions), protection of markets (3 mentions), efficiency (2 mentions), economic welfare (2 mentions), and social effects (2 mentions).
Similarly, in their examination of how CADE’s decisions have defined “consumer welfare,” Rodrigo Fialho Borges and Gustavo Manicardi Schneider confirm that the Horizontal Merger Guidelines’ interpretation—with its focus on a “non-negative net effect” for consumers—has become the agency’s dominant operational definition:
Among these documents (those that defined consumer welfare), two directly adhered to Hovenkamp‘s standard of consumer welfare, one directly mentioned Bork but emphasized allocative efficiency, and 12 adopted the definition of consumer welfare contained in CADE’s Guide H.
Taken together, these findings reinforce that consumer welfare has emerged as the functional and analytical cornerstone of Brazilian competition policy. Indeed, the principle provides the evaluative axis for balancing efficiency gains and competitive harms, ensuring that enforcement remains focused on consumer outcomes, rather than the protection of individual competitors.
In short, Brazilian competition law is built on the measurable, economically testable effects on consumers, not abstract social ideals or the protection of competitors.
Where the Bill Deviates from the Status Quo
Bill 4,675/2025, however, introduces three new objectives for ex-ante digital regulation in Art. 47-B: (i) reduction of barriers to entry; (ii) protection of the competitive process; and (iii) promotion of freedom of choice.
At first glance, these objectives may sound compatible with competition policy, but in practice, they diverge from the consumer-welfare standard in both logic and application.
Reduction of barriers to entry
Barriers to entry are an analytical factor, not a goal. CADE already considers them when evaluating unilateral effects in merger cases (section 2.5.1 of CADE’s Horizontal Merger Guidelines) or dominance in unilateral-conduct cases.
There is no clear economic or legal justification for treating “barrier reduction” as an end in itself, divorced from its ultimate impact on consumers, since many other factors that are as more important could also be turned into standalone goals This would bring confusion to the system. Elevating “barrier reduction” into a regulatory mission risks transforming a diagnostic tool into a policy end in itself.
Protection of the competitive process
This phrase is conceptually empty. As Nicolas Petit and Lazar Radic observe:
The “protection of the competitive process” is similarly redundant. All acts of bad conduct spelled out in antitrust statute epitomize “distortions of the competitive process”. Collusion removes independence from competitors and monopolization eliminates rivalry. Both standards add nothing to text law and are thus circular, with Herbert Hovenkamp calling them “slogans”.
Without a measurable benchmark, this standard would grant enforcers vast discretion and businesses little predictability. The result is precisely what competition law has long tried to avoid: arbitrary enforcement unmoored from demonstrable consumer harm.
Promotion of freedom of choice
Freedom of choice is another term deployed in the bill that lacks a clear definition. Product variety alone does not guarantee welfare. Markets with numerous low-quality options may leave consumers worse off than markets dominated by a few superior products. Indeed, competition sometimes narrows choice when consumers naturally gravitate toward efficiency and quality.
CADE’s empirical record reflects this reality: Borges and Schneider find that “freedom of choice,” along with “information made available to consumers,” appears only once as a proxy for consumer welfare in CADE’s decisions, whereas “price” appears 94 times—by far the most common indicator. Price, quality, quantity, and innovation remain the key measurable variables through which CADE operationalizes the consumer-welfare standard. “Freedom of choice,” by contrast, is conceptually diffuse and analytically weak.
Why These Changes Matter
In light of these observations, the bill’s three stated goals represent a departure from the consumer-welfare standard embedded in the BCL. While the first (reduction of barriers to entry) and, to a limited extent, the third (promotion of freedom of choice) maintain indirect links to consumer welfare, the second (protection of the competitive process) diverges sharply from it, inviting vagueness and legal uncertainty. Enshrining such an indeterminate concept as a statutory objective risks creating enforcement inconsistency and depriving firms of clear guidance on lawful and unlawful conduct.
Two principal conclusions follow.
First, from an economic perspective, the three objectives lack clear measurement methodologies capable of guiding CADE’s decisionmaking under an ex-ante framework. This deficit of measurability likely will—or, at least, should—compel enforcers to revert, explicitly or implicitly, to the well-established consumer-welfare analytical framework as the only economically coherent standard for antitrust analysis.
Second, from a legal standpoint, because Bill 4.675/2025 amends the BCL rather than creating a new regulatory regime, it would be structurally and doctrinally entrenched within the existing antitrust regime. As a consequence, the consumer-welfare standard remains the prevailing normative and interpretive benchmark. In other words, the BCL’s consumer-welfare framework trumps the bill’s other three goals.
Indeed, consumer welfare should remain the ultimate lodestar of Brazilian competition policy. The articulation of new and imprecise objectives not only risks distracting CADE from its core analytical framework but may also undermine coherence between ex-ante and ex-post competition enforcement.
If the legislature nonetheless wishes to preserve these broader principles, the bill should at least clarify that special obligations may only be imposed on designated “systemically relevant” digital platforms after a thorough economic assessment demonstrating consumer harm and establishing that no less-restrictive alternative could achieve the same objective. Without such clarification, the proposed goals may dilute the consistency, predictability, and economic rationality that have been built through much effort, and that have long characterized Brazil’s competition regime.
