STF ruling on digital platform liability may impact 144 million users and thousands of businesses

The advancement of proposals that expand the civil liability of digital platforms in Brazil has reignited the debate on the boundaries between content moderation and censorship. On June 26, the STF (Supreme Federal Court) ruled by 8 votes to 3 that platforms operating social networks should be held directly liable for illegal posts made by their users. In response, Google publicly admitted it might reduce its operations in the country if the STF "drastically changes" the moderation rules, a statement that has raised alarms in the digital market. 

With 144 million Brazilians active on social networks, according to the DataReportal platform, any change in this scenario directly affects the routine of small advertisers, content creators, and startups that use these platforms for marketing, sales, and customer acquisition. The impact goes beyond freedom of expression; the end of Article 19 of the Marco Civil da Internet (Brazilian Civil Rights Framework for the Internet) could pave the way for a regime of preventive censorship and incentives for the excessive removal of content, the so-called chilling effect. For digital companies, this represents legal uncertainty and the risk of retraction by major players, as already indicated by Google.

In the assessment of Lucas Mantovani, co-founder of SAFIE, a leading company in legal solutions for technology companies, startups, and digital businesses, and an expert in startup legal governance and data protection, holding platforms liable prior to a court decision could compromise fundamental principles of networks. "Holding platforms liable before a judicial decision compromises fundamental principles such as network neutrality and due process of law. This transfers to the private sector the power, and the fear, to decide what can or cannot remain online," he analyzes. "There are more effective alternatives, such as strengthening notice-and-takedown mechanisms with swift judicial oversight, already adopted in established democracies," he adds.

With the global legaltech market surpassing USD 26 billion, according to the Legal Tech Market Global report, the expert points out that Brazil needs to ensure legal security and predictability to continue attracting innovation and investments to the digital ecosystem. "Without a stable regulatory environment consistent with democratic principles, Brazil risks deterring investors and inhibiting the development of local technological solutions. Legal predictability is what allows startups to innovate safely and enables the digital ecosystem to continue generating value for the economy and society," states Lucas Mantovani.