With globalization and the increase in international business transactions, Brazil has become an attractive destination for foreign investments. Usually, foreign companies conduct market research to understand the growth potential and business opportunities in the country, adapting their offerings to comply with local regulations, the language and Brazilian business culture.
Therefore, it is essential to understand how Brazilian laws protect consumers regarding possible problems that may arise with products and services offered by foreign companies.
When the topic is consumer relations, we refer to the compliance and application of the Consumer Defense Code (CDC), a specific law enacted to protect consumer rights in Brazilian territory.
According to the CDC, a consumer is a person or a company that acquires a product or uses a service as final recipient. Also, the law equates consumers with a group of people, even if not determinable, who intervene in consumer relations.
On the other hand, the law defines that a supplier is a person or a company, public or private, national or foreign, that carries out activities of production, assembly, creation, construction, transformation, import, export, distribution or commercialization of products, or provision of services.
Therefore, a foreign company that carries out a commercial and profitable activity in Brazil, offering products or services, is subject to Brazilian law, including the CDC.
In this matter, Brazilian Courts have decided that the relation between users and social media platforms must be protected by the CDC. Thus, if the social media platform provides a paid service, even indirectly, it benefits from the data provided by users, attracting advertising and generating profits and, because of it, if there is proven damage to the user, the platform is objectively liable, according to article 14 of the CDC.
It is also worth mentioning that Brazilian Law has jurisdiction over foreign companies operating in Brazil, especially those that offer specific products and/or services to Brazilian consumers and make a significant profit from their commercial exploration.
However, the topic is still in constantly evolving. Both law and caselaw need to continue to adapt to the complexities of international trade, especially in relation to companies that use artificial intelligence and algorithms as essential pillars of their business strategy, using their users data to make a greater profit.
Brazil does not have yet specific legislation to regulate artificial intelligence, but there has already been progress in discussions on the subject, including Bill No. 759/23, which is being analyzed by the House of Representatives.
In conclusion, for foreign companies interested in operating in Brazil, it is essential to understand and comply with the Consumer Protection Code, adapt to local regulations and also seek specific legal advice, to ensure compliance and success in the Brazilian market.