Which kind of data protection law will Brazil approve?

Brazil is still debating how it should regulate the use of personal data. Right now, two bills in the House and one bill in the Senate are attempting to tackle the matter.  How this issue will unfold, however, depends on how lawmakers will choose to define what “personal data” actually means. And billions of dollars depend on that definition.

The legal basis for the concept of personal data can be found in Brazil’s Constitution. It says that citizens’ right to privacy, intimacy, honor, and personal image cannot be touched – same with their right to telegraphic, data, and phone communications. We can’t neglect the fact that our Constitution was founded on the principle of free competition. Favorable treatment to small companies based within our borders is also guaranteed under Brazilian law.

A balanced construction of the legal concept of “personal data” must take into account just how crucial data is to the new digital economy. Revolutionary technologies that are changing lives and markets, including Big Data, the Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning, are all dependent on data. Lots and lots of data. 

A legal framework that is too restrictive or based upon vague concepts will harm Brazil’s digital economy, as well as its right to free initiative and development.

Basing personal data protection laws on classic models of consumerism, which were created for offline economies, would be a mistake. Such an approach pits disadvantaged consumers against tech giants including Facebook, Alphabet (Google’s parent company), Microsoft, Apple, and Amazon – or, as The New York Times’ columnist Farhad Manjoo calls them, the “Frightful Five.” This would lead to a David v. Goliath situation, where the law would aim to even the scales.

Those who support this approach fail to realize that future laws regarding personal data will affect nearly all sectors of Brazil’s economy – especially startups, which often use data as raw material for innovation. By aiming for the giants, we risk crushing...