Welcome to this week’s news round-up on the Brazilian innovation and technology ecosystem. Here is a selection of key developments and news you should know in Latin America’s largest economy during the week ending July, 4, 2020:
On Tuesday (30) the Brazilian Senate passed a bill that outlines measures to tackle the spread of fake news and defamatory content online. The proposals would be applicable to platforms with over 2 million users and include several requirements.
This was the fourth version of the bill, which was changed considerably amid concerns raised by the social media platforms, civil rights organizations and academia. Despite the changes, critics argue the proposal does little to track the individuals and organizations financing the spread of false content across social media platforms and introduces red tape as well as threats to user privacy and freedom of expression.
Several controversial points, such as a requirement to provide ID and a valid mobile phone number in order to create a social media account and a requirement for platforms to remove certain types of content, were removed from the proposal. But many other points remain: for example, platforms would be required to store message chains that have gone viral, and suspend accounts in the event mobile numbers are disabled – a process that would entail sharing personal user data between mobile operators and social media companies.
The proposal will now be voted by the Congress and should be altered further before it reaches president Jair Bolsonaro, who said on Wednesday (1) there is a possibility he may veto the bill.
The Bolsonaro administration still plans to sell the main government-owned technology companies in the coming months. The sale of data processing service Serpro, social security technology firm Dataprev and telecommunications company Telebras, will go ahead in 2021 as part of a wider privatization plan, government officials said at an event held by a Brazilian bank this week. Serpro and Dataprev have been playing an important role in the response to the Covid-19 outbreak, in initiatives such as the emergency aid scheme.
Concerns have been raised by the companies themselves over the measures that should be taken to protect citizen data in the event of a sale. At the time the privatization plans were announced, Dataprev staff warned “hifting critical social security data could compromise national sovereignty”. No plans have been announced to mitigate such risks.
Microsoft lacks top leadership for the Latin America region. The former president for the region, Cesar Cernuda, left on Wednesday (1) to join software firm NetApp. Cernuda should have been shadowed since May, and eventually replaced, by Rodrigo Kede Lima, a former high-ranking executive at IBM. However, Lima has been temporarily restrained from taking over, as the Big Blue launched court action to prevent the executive from joining Microsoft, arguing he is violating his non-competition agreement.
The executive’s new employer argue IBM’s business would not be jeopardized. “In general, we do not discuss personal matters related to our team, but we emphasize that we are not interested in any of IBM’s confidential information and we believe that Rodrigo can resume the role in which he was hired here, without violating the terms of his contract with IBM”, Microsoft said in a statement. “We hope that the court will decide as soon as possible when Rodrigo will return to work.”
The next court hearing on the matter is scheduled for July 14.
Delivery app workers held their first major nationwide strike on Wednesday (1). Thousands of couriers hit the streets of São Paulo, Rio de Janeiro, Brasília, Espírito Santo, Minas Gerais, Rio Grande do Sul and Pernambuco.
Worker demands include specific work legislation, the right to defense in cases where workers are blocked or banned from the apps, was well as the responsibility of companies to provide personal protective equipment for protection during the Covid-19 pandemic. In addition, the couriers seek better rates and work conditions, as well as life and accident insurance paid for by the apps, in addition to formal employment. Currently, delivery workers in Brazil work as freelancers.
This week’s noteworthy deals
Aerospace conglomerate Embraer acquired a controlling stake in Tempest Security Intelligence as part of a move to focus on the cybersecurity market. Tempest is considered of the main success stories in the Brazilian software industry and is headquartered in the Porto Digital innovation district in the city of Recife, in the northeast of Brazil, with offices in São Paulo and London. The company has a portfolio of over 300 clients in Brazil, Latin America and Europe.
One of Brazil’s largest brokerage firms, XP Inc, acquired a majority stake in supply chain financing fintech Antecipa, as part of a strategy to strengthen its presence in the market for prepayment of receivables. “The acquisition is an opportunity to expand the product range and reinforce its presence in the middle and corporate segments in Brazil,” said XP in a statement.
Pet e-commerce and brand Zee.Dog announced an investment of BRL 100 million (USD 18.8 million) by TreeCorp Investimentos in return for a minority stake. The new cash will go towards the launch of the company’s delivery service Zee.Now in the United States, starting in New York and Seattle, as well as a pet food division, a flagship store in São Paulo, as well as technology projects. The deal follows a wave of interest in pet-focused startups in Brazil. In April, pet e-commerce PetLove raised USD 48 million in funding in a round led by Japan’’s SoftBank, in what is the largest deal in the segment so far.