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EXCLUSIVE: Initial impacts of Brazil’s new Data Protection law

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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 first impacts of Brazil’s new data protection law, challenges of green lithium mining in Latin America, and Brazil’s booming electronic sector. 

First reactions to Brazil’s new Data Protection Law

Brazil’s new general data protection law (LGPD) is already causing a headache for non-compliant companies,

even though sanctions can only be applied as of August 2021. Exclusive data provided to <strong>The Brazilian Report</strong> by customer protection institute Reclame Aqui shows that customers have wasted no time filing grievances related to data protection. In the week the <a href="https://brazilian.report/tech/2020/09/18/vale-launches-brazils-first-electric-train-tech-roundup/">law was enacted</a>, complaints went up almost 74 percent.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3841170" data-url="https://flo.uri.sh/visualisation/3841170/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <ul><li>So far, no one company or sector has been affected the most. Giants such as Banco Pan bank, retailer Magazine Luiza, and credit bureau Serasa Experian were among the firms that received the most complaints from customers.</li></ul> <p><strong>Litigation. </strong>At least two companies have faced lawsuits concerning data protection issues. The first was filed by the Public Prosecution Service in the capital city Brasilia, suing a Minas Gerais company that sells personal data such as people&#8217;s names, emails, addresses, and phone numbers. Prosecutors believe over 500,000 people in the state of São Paulo alone had their information sold — but there were victims from all over the country.</p> <ul><li>Meanwhile, in Recife, a student filed a lawsuit against the company that manages the city&#8217;s public transport card system, after his card was blocked due to a lack of biometric registration. The student questions whether the company even has the right to collect biometric data.</li></ul> <p><strong>Why it matters. </strong>Brazilian consumers are increasingly aware of their rights over their personal data. While companies will have one year until fines are issued, the first days of the law show that they better get their act together.</p> <ul><li>A March 2020 survey by Serasa Experian showed that 85 percent of companies had yet to adapt to the new rules. While most big corporations have the structure for major changes, there remains much uncertainty about whether small firms will be able to comply with the rules.</li></ul> <iframe src="https://open.spotify.com/embed-podcast/episode/0R8BLk5ncZvZ3rJh5nhESe" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>Could electric vehicles turn South America mining firms green?</h2> <p>Recent <a href="https://www.nsenergybusiness.com/features/electric-vehicle-growth-projections-2035/">projections</a> by consultancy firm GlobalData state that electric cars will make up almost 12 percent of the world&#8217;s total vehicle production by 2030. These forecasts have jacked up demand for the minerals used in batteries, piquing the interest of mining companies in South America. The region is home to around <a href="https://brazilian.report/latin-america/2020/08/02/2019-coup-bolivia-elon-musk-lithium-resources/">60 percent of the world&#8217;s lithium</a> — a key component in modern battery cells.</p> <p><strong>Yes, but … </strong>Companies are increasingly concerned about the sustainability of their supply chain, with electric car giant Tesla announcing it wants to remove cobalt from its batteries due to its environmentally harmful production process.&nbsp;</p> <ul><li>Emily Hersh, managing partner at financial consultancy DCDB Group, says that it is not only about having the resources —&nbsp;but about the ability to exploit them. &#8220;Many countries only have aspirational projects. They have to attract investors to finance and develop the sector,&nbsp;which takes years and hundreds of millions of dollars,&#8221; she told <strong>The Brazilian Report</strong>.</li><li>Moreover, legal and political insecurity — Bolivia, for instance, witnessed a <a href="https://brazilian.report/podcast/2020/02/19/explaining-brazil-human-rights-abuses-powered-cia-technology/">coup d&#8217;état in 2019</a> — may scare investors away, making many projects unviable. These factors could turn countries such as the U.S., Canada, and Germany into bigger lithium producers, despite having smaller reserves.</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/3841277" data-url="https://flo.uri.sh/visualisation/3841277/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Challenge.</strong> Ms. Hersh points out that South American countries have both ends of the production chain: the inputs and a potential consumer market. Developing battery factories is the true challenge.&nbsp;</p> <p><strong>Change. </strong>Ana Costa-Gardner, co-chairman of miner Sigma Lithium, believes that lithium &#8220;should bring prosperity to the areas in which it is found,&#8221; which are some of the driest and poorest places in South America.</p> <ul><li>Sigma Lithium has just <a href="https://www.infomoney.com.br/mercados/canadense-sigma-lithium-quer-ganhar-mercado-produzindo-litio-em-minas-gerais/">raised</a> USD 13.3 billion to extract lithium from the Vale do Jequitinhonha, one of Brazil’s least-developed areas. Since 2013, BRL 200 million has been invested in the project, with another BRL 450 million to come, says Ms. Costa-Gardner.</li><li>Construction on facilities is about to begin and Sigma expects to start production by early 2022.</li><li>The company has a strong focus on ESG standards (environmental, social, governance) and adopted technologies such as dry-stacking to protect the environment. “How could I use water to fill a dam with mud in the middle of a semi-arid area — where people don’t have access to water? It makes no sense.”</li><li>In partnership with industry educational service SESI, they have trained local people to work as technicians in the mine. Also, by assembling a plant near the mine &#8211; and not the port &#8211; Sigma aims to foster the area’s development.&nbsp;&nbsp;&nbsp;&nbsp;</li></ul> <p><strong>Electric cars in South America. </strong>Ms. Cabral-Gardner believes Brazil’s auto industry will sustain its leading position in the transition toward electric vehicles, but she doesn’t see major fleet changes in the next “five years or so,” as the country’s cars already predominantly run on ethanol — which is already &#8220;greener&#8221; than gasoline. However, she sees major potential for electric buses, as they are major polluters in local cities and don’t face infrastructure obstacles as cars would, as they can be charged while in bus depots.</p> <hr class="wp-block-separator"/> <h2>Despite currency woes, electronics sales skyrocket in Brazil</h2> <p>No currency has lost as much ground against the U.S. Dollar as the Brazilian Real. Still, the sales of electronic goods in Brazil — often affected by foreign exchange fluctuations — have been promising, according to new reports.</p> <ul><li>A <a href="https://valor.globo.com/empresas/noticia/2020/09/21/vendas-de-eletronicos-superam-as-do-ano-passado.ghtml">study</a> by consultancy GfK shows a 32-percent jump in July against the same month last year.</li><li>Meanwhile, sales of wearable devices such as activity trackers and smartwatches grew by 21 percent in Q2 2020 (against Q2 2019).</li></ul> <p><strong>Why it happened.</strong> Experts say it is a normal trend: first, consumers go into a “panic” phase and withhold spending. Then, they usually enter a period of “indulgence.”</p> <p><strong>What to expect? </strong>Companies such as Samsung and Panasonic have high hopes for this year’s Black Friday and Christmas season. Panasonic Brazil CEO Michikazu Matsushita said he believes in “double-digit growth rates” for both dates.</p> <hr class="wp-block-separator"/> <h2>You should also know</h2> <ul><li><strong>Crypto.</strong> Brazilian fintech Hashdex is launching the first exchange-traded fund for cryptocurrencies in the world. The Hashdex Nasdaq Crypto Index ETF, as the product is called, was developed in partnership with tech stock exchange Nasdaq and will replicate the Nasdaq Crypto Index. The ETF will be listed in the Bermuda Stock Exchange (BSX), as the country is known for innovative legislation for digital assets.&nbsp;</li><li><strong>Entertainment.</strong> In Argentina, the first fiction series broadcast via WhatsApp, entitled “<a href="https://www.infobae.com/inhouse/2020/09/21/de-que-se-trata-la-primera-serie-argentina-que-se-vera-via-whatsapp/">Velozapp</a>,” will be launched. Users will receive a digital flyer through the app, where they can click a button to watch all six episodes for up to four minutes. The series is completely adapted for cell phone screens and is the result of a partnership between the Foundation for International Studies and Rolling Films.&nbsp;</li><li><strong>Android. </strong>In 2019, the revenue of all companies directly connected with Android-based products reached BLR 136 billion in Brazil — 2 percent of the country&#8217;s GDP. The <a href="https://www.telesintese.com.br/mercado-em-torno-do-sistema-android-movimentou-r-136-bi-no-brasil/">survey</a> was carried out by global consultancy Bain &amp; Company and showed that 35 percent of workers in the technology and telecom industry are part of the Android chain.</li><li><strong>Environment.</strong> A social-media bot called “Da Mata Repórter” (<a href="https://twitter.com/DaMataReporter">@DaMataReporter</a>) is posting information and alerts about deforestation in the Amazon rainforest on Twitter. The <a href="https://novoemfolha.blogfolha.uol.com.br/2020/09/21/inteligencia-artificial-produz-e-compartilha-alertas-sobre-desmatamento-na-amazonia/">project</a> uses an environmental monitoring platform developed by the National Institute for Space Research (Inpe)<strong> </strong>and was developed through a partnership between the Federal University of Minas Gerais and the University of São Paulo.</li><li><strong>Credit. </strong>Uber has <a href="https://exame.com/negocios/uber-faz-parceria-para-linha-de-credito-a-motoristas-e-entregadores/">partnered</a> with fintech Digio to offer a credit line to its drivers and couriers in Brazil. Loans ranging from BRL 1 thousand to BRL 5,000&nbsp; will be offered at an interest rate of 2.7 percent per month and with a term of up to 12 months. Initially, the program will include 1,000 drivers and in the future will expand to all employees of the company, of which there are almost 1 million.

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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.

Ariádne Mussato

Ariadne Mussato is a social media expert

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