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Tech Roundup: The end of the Data Protection Law soap opera?

. Aug 28, 2020
Tech Roundup: The end of the Data Protection Law soap opera? Image: Bloomicon/Shutterstock

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: the long path to enforce a new data protection law, Brazil’s connected city woes, and the unprecedented boost for e-commerce. 

Two years on, data protection law to go live. What now?

After two years of hemming and hawing,

Brazil&#8217;s Congress has finally approved the new General Data Protection Law (LGPD), which will come into force within two weeks. However, legal battles surrounding the regulations are far from over, and there is much to be done before sanctions <a href="https://brazilian.report/tech/2020/04/04/impact-postponing-brazil-data-protection-law/">may be applied in 2021</a>.</p> <p><strong>ANPD. </strong>Soon after Congress&#8217; decision, President Jair Bolsonaro issued a <a href="https://www.in.gov.br/en/web/dou/-/decreto-n-10.474-de-26-de-agosto-de-2020-274389226">decree</a> finally creating the National Data Protection Agency (ANPD), which will serve as the watchdog and sanctioning body for the LGPD. However, experts complain that the new regulator may suffer from a severe lack of autonomy.&nbsp;</p> <p><strong>Breaking it down. </strong>According to lawyer and Digital Law specialist Alisson Possa, the main problem is that the president will be able to remove members of the ANPD board by way of administrative procedures.&nbsp;</p> <ul><li>“The main problem is not in the nomination process, as board members are appointed by the president, but approved by the Senate. The problem is in removing them: the president can strip a board member from his/her job and put them on ‘trial’ following an administrative process. This gives too much power to the president,” he tells <strong>The Brazilian Report</strong>.&nbsp;</li><li>Experts point out that the ANPD will not be a standalone agency, being subject to the President&#8217;s Office, thus diminishing its independence.</li></ul> <p><strong>More to come. </strong>Besides the LGPD, <a href="https://www.convergenciadigital.com.br/cgi/cgilua.exe/sys/start.htm?UserActiveTemplate=site&amp;infoid=54678&amp;sid=11">organizations from the sector support</a> the approval of Constitutional Amendment Bill (PEC) 17, which establishes data protection as a constitutional right.&nbsp;</p> <ul><li>In its current form, PEC 17 would also allow for the reformulation of the ANPD, as it demands the data protection watchdog be fully independent to ensure data privacy as a fundamental right.&nbsp;</li><li>The LGPD also states that any changes to the ANPD’s legal status should take place over the next two years.&nbsp;&nbsp;</li></ul> <hr class="wp-block-separator"/> <h2>Brazil struggles to create connected cities</h2> <p>Though Brazilian cities are moving forward with various connectivity projects, a recent <a href="http://paineltelebrasil.org.br/">report</a> from an association of telecom providers shows that advances are being hindered by time-consuming red tape in the installation of antennas.&nbsp;</p> <ul><li>In an event to present its annual ranking of Brazil’s most “internet-friendly” cities, sector representative Marcos Ferrari <a href="http://www.agenciatelebrasil.org.br/Noticias/Sao-Jose-dos-Campos%2C-Santo-Andre-e-Joao-Pessoa-sao-destaques-do-Ranking-das-Cidades-Amigas-da-Internet-2020-601.html?UserActiveTemplate=site">highlighted</a> that the cities with the best performance were those which reduced bureaucracy and updated their infrastructure frameworks.</li></ul> <p><strong>Why it matters. </strong>Brazil currently has roughly 100,000 antennas, but it would need to double this number in the next four years to<a href="https://brazilian.report/newsletters/brazil-daily/2020/08/06/brazil-communications-ministry-snubbing-huawei-5g-talks/"> enable the use of 5G technology</a>.</p> <p><strong>Leaders. </strong>São José dos Campos, a mid-sized city in the state of São Paulo, is Brazil’s most internet-friendly city for the second straight year. Santo André, also in São Paulo, led the intelligent services ranking, offering digital services for 20 of the 26 categories studied.</p> <p><strong>Lagging behind. </strong>Surprisingly, the country’s major state capitals seem to be in a race to the bottom. Belo Horizonte tanked, falling to 92nd place overall, while Brazil&#8217;s biggest city São Paulo came in at 98th. Brasília, the capital built from scratch just 60 years ago, was also in the bottom end. It <a href="https://www.agenciabrasilia.df.gov.br/2020/07/13/sancionada-a-lei-que-regulamenta-instalacao-de-antenas-de-telefonia-no-df/">has just approved</a> its own law to regulate antennas.&nbsp;</p> <ul><li>In São Paulo, a parliamentary hearings committee found that <a href="https://www.telesintese.com.br/em-cpi-claro-cobra-atualizacao-da-lei-das-antenas-de-sao-paulo/">27 percent of the city&#8217;s population</a> access the internet using irregular antennas. </li></ul> <p><strong>Regulation.</strong> While Brazil&#8217;s current regulatory framework is good, it is not enforced. A 2015 bill established that cities must assess requests for antenna installations within 60 days, but this process can last up to a year in major urban centers such as São Paulo. The federal government wants to pass a rule establishing that a lack of response from municipal administrations constitutes tacit approval.</p> <p><strong>Impact.</strong> Brazil&#8217;s Deputy Telecoms Secretary Artur Coimbra estimates that properly enforcing the law could generate up to BRL 3 billion in investments within a year.</p> <hr class="wp-block-separator"/> <h2>Brazilian e-commerce has best six months in 20 years</h2> <p>With a 47-percent increase in revenue as a result of social isolation, <a href="https://brazilian.report/tech/2020/08/21/how-brazilian-e-commerce-survives-postal-workers-strike/">Brazilian e-commerce</a> managed to raise BRL 38 billion in the first half of 2020. According to a Nielsen report, this was the best six-month performance for the sector in 20 years. The performance was boosted by a 39-percent bump in purchases — now at almost 91 million — and an increase in the average order price.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3598939"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Heavy users.</strong> The number of online shoppers in Brazil rose 40 percent, but this was not the main reason for the sector&#8217;s success. Instead, the report suggests that people already accustomed to buying goods digitally are becoming even more loyal to e-commerce and contributed to 82 percent of the H1 2020 growth.</p> <p><strong>Next frontier. </strong>The Southeast, Brazil&#8217;s richest and most populated region, accounted for 47 percent of the e-commerce growth in the country. However, the North and Northeast areas combined were responsible for one-third of the revenue growth in H1 2020. Online sales grew an impressive 107 percent in Northeast and 93 percent in the North, the highest rates nationwide.</p> <p><strong>Yes, but … </strong>The unexpected increase in sales has also exposed logistic issues, with 14 percent of orders arriving late.&nbsp;</p> <ul><li>One of the main bottlenecks is the so-called &#8220;last mile of delivery.&#8221; To get around the issue, Germany&#8217;s DHL Express started a <a href="https://labs.ebanx.com/en/articles/business/dhl-express-launches-project-to-bring-e-commerce-to-lockers-in-rio-de-janeiro/">pilot project</a> in August to integrate delivery services with self-service lockers in subway stations, with customers able to pick up orders themselves.</li></ul> <hr class="wp-block-separator"/> <h2>Take note</h2> <ul><li><strong>Proxy. </strong>Personal finance app Guiabolso is allowing users to make instant wire transfers between banks, for free, on a 24/7 basis. The functionality mirrors PIX, the Central Bank&#8217;s instant transfer system set to be launched in November. The platform will reportedly <a href="https://exame.com./seu-dinheiro/guiabolso-se-antecipa-ao-pix-e-lanca-transferencia-a-qualquer-hora-do-dia/?utm_source=Newsletter&amp;utm_medium=email&amp;utm_campaign=Desperta&amp;utm_term=seu%20dinheiro&amp;utm_content=pausa">adopt</a> PIX once it is up and running, in an attempt to compete with banks. Guiabolso now aims to consolidate several functions within its app, such as financial management, a marketplace, and payments.&nbsp;</li><li><strong>Beauty-tech. </strong>Startup JustForYou — which uses AI to create shampoos and hair conditioners according to people’s own physical specificities — received investment from Neuron Ventures, a venture capital fund sponsored by drugstore chain Eurofarma. The undisclosed amount will be used to increase its product portfolio, expand the lab, marketing, and customer wellness, which the company hopes will drive its revenues up by 150 percent.&nbsp;</li><li><strong>Cybersecurity. </strong>Research by cybersecurity company Akamai Technologies indicated that 43 percent of Brazilian bank customers are now using digital banks — twice the amount of last year — and are increasingly concerned about data security. Fifty-seven percent of interviewees said they check the bank’s background on security breaches before opening an account and, for one-third, this information proved to be a decisive factor to become a customer.&nbsp;

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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