This study was carried out at the request of Data Privacy Brasil Research Association (“DPB”). Funding was provided by Open Society Foundations (“OSF”), a nonprofit organization which funds several independent institutions around the world in connection with research projects that have social impact. OSF’s work encompasses different areas, one of which is information protection and privacy rights of individuals and companies in the digital era.Notwithstanding the funding from OSF and the partnership with DPB, those institutions have had no influence on the findings or opinions presented in this work. The antitrust and regulatory issues raised in this report are the result of independent analysis and the author’s own ideas based on the scholarly articles, case studies, and reports used in this work. The only alignment with DPB was regarding the scope of the project and the methodology to be deployed in this research. The study’s results were discussed with the Brazilian Institute for Consumer Defense (“IDEC”, acronym in Portuguese), who did not interfere in any way with the topics discussed herein.The main objectives of this report are: (i) to put into context discussions recently raised by academia, foreign antitrust authorities, and third sector organizations over relevant antitrust issues related to mergers intended to increase data collection capabilities (data-driven mergers); (ii) to demonstrate how the current merger control regime provided by Law No. 12,529/2011 is insufficient to “capture” potentially sensitive transactions in technology markets; (iii) to show that, as a result of the deficiencies indicated in the item above, the Administrative Council for Economic Defense (“CADE”, acronym in Portuguese) has failed to analyze important transactions that are scrutinized abroad; (iv) to assert that, even if CADE had investigated the mergers examined in this report, CADE’s assessment would have been incomplete and superficial; and (v) to recommend, in light of the academic materials studied and this report’s empirical results, that some institutional and legislative improvements should be made to close legal loopholes in Brazil.In order to do so, this report is structured in the following manner: (i) the first section is this introduction; (ii) the second section describes the scope and methodology of this project; (iii) the third section establishes the assumptions upon which this research was based; (iv) the fourth section approaches the current merger control regime in Brazil and identifies loopholes affecting data-driven mergers; (v) the fifth section critically examines five transactions that were investigated by foreign antitrust authorities (Facebook/Instagram, Google/Waze, Facebook/WhatsApp, Apple/Shazam and Google/Fitbit) and identifies deficiencies in the analysis of those cases; (vi) the sixth section suggests ways to close loopholes found and antitrust advocacy actions; (vii) the seventh section ends with my conclusions.It is not the objective of this research to advocate for or against specific mergers or for the commercial interests of any technology company. It is to the credit of those companies which have invested capital and effort into developing previously nonexistent products and services which are used by companies, governments, and individuals. Therefore, they should be appropriately rewarded, so that there remain incentives for innovation. Data-driven mergers, by themselves, do not necessarily raise antitrust or data protection concerns; in some cases, they may be very beneficial to consumers, the market, and to society as a whole.This report was written by an independent consultant who, at the time of the writing, had no contractual, corporate or employment relationship with any technology company or law firm which may potentially have a stake in the cases analyzed here. It is worth mentioning that it is up to the antitrust authorities to consider each specific case and to consider the arguments of all parties involved and conclude on whether a merger has any anticompetitive impacts
