Challenges to AI development
Brazil's artificial intelligence (AI) regulation bill, 2338/2023, approved by the Senate at the end of last year, was also a cause of concern for the lobby group. It wrote that the law could "severely restrict US AI developers, as well as other US businesses that deploy AI-powered services" and ultimately "harm US companies that compete with Chinese and other foreign providers".
The law, which is now under scrutiny in Brazil's House of Representatives, would require developers, distributors and applicators of AI to introduce measures designed to limit bias and potential discrimination by automated decision-making, as well as address copyright issues related to AI training.
According to the CCIA, it would impose "excessive reporting obligations for high and low-risk AI offerings, none of which are well defined". One of its main complaints is about mandatory copyright compensation, "that extends far beyond proposals floated elsewhere globally, which would require developers to provide compensation for any Brazilian content used to train AI models."
The group argues that this will lead to AI applications not being developed in Brazil and that the US government "should monitor this regime to ensure the framework is aligned with international agreements" and "to avoid discriminatory treatment" of US suppliers.
Against public platform regulation
The CCIA also took issue with draft bill 2768/2022, which would hand Brazil's National Telecommunications Agency (Anatel) powers to regulate, supervise and – where necessary – sanction digital platforms with annual revenues of more than $12.5m, including search engines, social networks, cloud computing and email services and video sharing platforms.
Such companies, considered by the bill "holders of essential access control power", will also have to pay a fee of 2% over revenues to source a new Digital Platform Oversight Fund.
The bill, the Big Tech lobby group argued, would give the agency "broad discretionary authority to set the definitions and draft rules".
"As such," it continued, "the bill would empower Anatel to require US services providers to contribute to the telecommunications and transmissions infrastructure of Brazilian companies – some of which compete against these US firms in the realm of content and streaming – even though the US internet services do not have any direct access to or control over the infrastructure relevant to the fund."
Against tax on digital products and services
The report called attention to the executive decree 1262/24, issued by the Brazilian Ministry of Finance, which set a minimum tax of 15% on foreign corporations operating in the country. This is in line with the rules proposed by the Organisation for Economic Co-operation and Development (OECD) to ensure that large multinational corporation pay a minimum level of tax on their income in each jurisdiction where they operate.
For the CCIA, "the government appears intent on seeking new revenue streams for its coffers by disproportionately taxing foreign corporations". It asked the Office of the US Trade Representative to "remain watchful of Brazil's actions on this matter".
Taxing the internet
The group also pointed out that in 2023, Anatel launched a public consultation on the regulation of value-added services (supplementary features or enhancements that go beyond a product's core offering), "including exploring the feasibility and appropriateness of network usage fees in Brazil".
Taking issue with this, it said: "A proposal to impose network usage fees on "large" companies would by definition discriminate against US internet services, given their popularity in Brazil."
The CCIA also criticised draft bill 2804/2024, currently pending in the Chamber of Deputies, which proposes that digital platforms contribute 5% of their revenue to the Universal Telecommunications Fund. According to the group, "this law could violate the principle of competitive neutrality under the WTO's [World Trade Organisation] rules governing universal service, as Brazilian suppliers would receive preferential treatment at the expense of foreign suppliers that are unable to access the Fund".
The report urged the US Trade Representative "to remain vigilant as Brazil continues to pursue network usage fees".
*This is a translated and edited version of piece originally published by Agência Pública
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