On October 6, Brazil held its municipal elections. Over 150 million citizens—a number that is roughly 40 percent of the population of the US—were eligible to vote for their local leaders. On a national level, the Brazilian legislature is considering regulations to mitigate perceived risks that social media and artificial intelligence pose to the political process. These proposed regulations mark a notable shift towards the European-style approach of technology regulation and an overcaution around technology risks.
Currently, Brazil is considering several regulations that would change the technology landscape of the most populous country in Latin America. In 2022, Brazil introduced Bill 2768 to regulate digital platforms, similar to the EU’s Digital Markets Act. This bill aims to identify certain companies as “gatekeepers” of the technology industry; however, the threshold is only $14 million in revenue to reach the designation, thereby looping in not only the largest US Big Tech players, but many more US companies, global companies and, ironically, startup unicorns in Brazil that the regulation seeks to aid.
Success stories in Brazil like QuintoAndar, a platform to find housing, as well as the e‑commerce platform Nuvemshop are swept up in the broad threshold.
The Brazilian congress is also debating Bill 2630, known as “PL das Fake News” or the “Fake News Bill.” The bill establishes content moderation guidelines for social media platforms, including — as its name suggests — the criminalization of a type of content referenced only as “untrue facts.”
On the flip side, the bill has a vague must-carry obligation for “journalistic” content and content posted by “public interest” accounts. While the EU’s Digital Services Act does not supply a definition of what constitutes illegal content online, it does defer to the member states’ individual laws and holds platforms liable for not removing content reported as illegal through the notice and takedown process.
Both regulations encourage platforms to remove content that may violate provisions. This overcautious approach will influence the experience of American users.
As with Europe, Brazil’s movement towards a more restrictive regulatory regime has reduced its citizens’ access to technology. Earlier this year Meta decided to suspend its generative AI tools due to disagreements over the company’s privacy policy, and X terminated its service in the country because of a judiciary disagreement.
Brazil judge Alexandre de Moraes issued a court order to take down specific accounts, which X declined to follow. After threats to arrest X’s legal representative if the platform failed to comply with the court order, X removed all staff from the country and ceased operations. Ultimately, the platform agreed to block the accounts de Moraes flagged, reinstated the company’s legal representative, and paid a $5.2 million fine to operate again in the country.
However, the saga still highlights the negative consequences that arise when the government uses a heavy hand in its regulatory powers over tech companies.
All of this marks a notable shift from the more American style and less regulatory approach to technology policy previously seen in Brazil. One of the most important examples of this prior approach is Article 19 of the Brazilian Civil Rights Framework for the Internet, reminiscent of “Section 230” in the United States. Article 19 protects platforms from civil liability in the case of content generated by third parties — except if the platform violates a court order to take down a specific, identifiable, and locatable piece of content within a determined period.
While not as concrete as Section 230, Article 19 sets up an important system of immunization for platforms that host third-party content, supporting an important pillar of the Internet: a culture of free expression.
Unfortunately, the power of Article 19 erodes as the branches of government in Brazil take issue with the freedom the rule grants to technology companies, calling to chip away or entirely remove the shield with proposed legislation and resolutions. The Supreme Court of Brazil even held a public hearing on the constitutionality of Article 19. These actions are not unlike those of the United States, where Congress has considered a bill that would sunset Section 230 or proposed the No Section 230 Immunity for AI Act, which would carve out immunity in cases that involve generative artificial intelligence.
Because of the nature of technology regulation, proposals such as the ones in the US and Brazil affect not only the users within those countries, but the global social media experience. The social media landscape will look different due to regulatory obligations that incentivize companies to be overcautious in their removal of content.
In both the United States and Brazil, with elections top of mind, many observers are discussing the potential impact of AI. Unlike the US, Brazil started regulating the use of AI in political ads earlier this year in advance of their municipal elections with resolutions by the court. Per Resolution 23.732 by Brazil’s Superior Electoral Court, political candidates may not use artificial intelligence to “create, replace, omit, merge or change the speed” or “superimpose images or sounds on [a] person.” It also bans the use of “robots” that simulate dialogue.
As a result of those resolutions, Google updated its policy in May to remove many political ads on its platforms in Brazil. This illustrates what could happen in the US following a variety of legislative and regulatory proposals at a federal, state, and local level.
Brazil’s current and proposed actions have and will affect the technology ecosystem. If the United States creates a similar regulatory structure around artificial intelligence, they could likewise see a stifling of content. While the First Amendment prohibits regulation that may be legally allowed in other countries, it is still up to the regulator to interpret the definition of protected speech. This, in turn, could cause a chilling effect.
Brazil’s recent response to worries about technology, including a shift to a more regulatory approach to policy provides further notice of the pitfalls. Platforms will limit their options in markets that choose to undergo broad regulatory decisions. Users will be left uncertain as to what their rights are online. These consequences impact not only large US companies but also local innovators who will struggle with new burdens to entrepreneurship and consumers who will lose the benefits of such innovation.
As Brazil aligns with a more European approach to technology regulation, one wonders if other countries in Latin America will follow suit behind the largest economy of the region. Either way, the United States should be wary of the outcomes of Brazil’s technology policy stances as it looks to codify the same positions in regulation.
