Executive Summary

  • Nation-wide elections for mayors and city councilors will likely impact Brazil’s national politics, its federal government, and the upcoming elections for the Speaker of the House and President of the Senate – all of them relevant for investors.
  • The local elections will be seen as a referendum on President Luiz Inácio Lula da Silva’s policies, as well as a test of the opposition’s strength, including former President Jair Bolsonaro’s current political standing.
  • The outcome of these elections might impact the Lula administration’s policy trajectory, the strength of the pro-business majority in Brazil’s National Congress, and the functioning of federal regulatory agencies in 11 key economic sectors.

Analysis

On October 6, Brazil will hold its nation-wide elections for mayors and city councilors.  All 5,569 Brazilian cities will elect the head of the local executive branch, as well as all city council members for a four-year term.

While this electoral cycle focuses on local issues, and mayors and city councilors have a limited policy impact on businesses, the local elections will likely have a significant impact on national politics, the federal government, and the upcoming elections for the Speaker of the House of Deputies and the President of the Federal Senate – all of them relevant to investors.

Impact on federal government

Election watchers will be looking at the performance of the main political groups based on three indicators: the total number of mayors and city councilors they elect; wins in the 27 state capitals; and wins in the so-called “G103”, the 103 cities with a population of more than 200,000.

If the election results in a larger number of mayors and city councilors formally supported by President Luiz Inácio Lula da Silva, this will likely be seen as voters’ endorsement of his policies.  While voters might not focus on specific policies – including, among other aspects, a lax fiscal policy, increased taxation, and state capitalism-type measures – individual perceptions on cost of living and economic prosperity tend to play a role in voting decisions.  In this scenario, the Lula administration will likely continue its current policy trajectory.  However, if the total number of mayors and city councilors supported by the president is equal to or lower than the existing number, the result will probably be seen as a rebuke of the Lula administration and might result in pressure to change current policies.Continue Reading Impact of Brazil’s Local Elections on Businesses

On Friday, California Governor Gavin Newsom signed SB 399, the “California Worker Freedom from Employer Intimidation Act” (the “Act”) that should be of interest to any company with employees in the state. The Act, which takes effect on January 1, 2025, adds a new section to the California Labor Code to prohibit employers from taking or threatening adverse employment action against an employee because the employee refuses to attend employer meetings about, or to participate in, receive, or listen to, any communications about the employer’s opinion on religious or political matters. The law is similar to, but broader than, laws in several other states that attempt to decrease the influence of “captive audience” meetings communicating an employer’s political or religious opinions.

Captive audience laws are frequently promoted by labor organizations that aim to limit employer communications related to unionization. However, the new California law is broader and applies to meetings and communications related to employers’ opinions on “political matters” or “religious matters,” both of which are defined terms in the Act.

“Political matters” are “matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization.” While the state will likely sharpen the contours of the law through regulation, as drafted this includes not only electoral and partisan political matters, but also issue-based activity, such as meetings about an employer’s position on proposed regulations or efforts to “activate” employees on a grassroots level to contact legislators about pending legislation. The definition of “political matters” also would cover union organizing.

“Religious matters” are “matters relating to religious affiliation and practice and the decision to join or support any religious organization or association.”Continue Reading California Joins Growing List of States Prohibiting Employer Action Against Employees Who Refuse Political or Religious Communications

The UK Government has announced that it intends to introduce the Cyber Security and Resilience Bill (the “Bill”) to Parliament in 2025. Formally proposed as part of the King’s Speech in July, this Bill is intended to strengthen the UK’s cross-sectoral cyber security legislation to better protect the…

Continue Reading What to expect from the UK’s Cyber Security and Resilience Bill (and when)

What are the key take-aways of the mission letter to Teresa Ribera Rodríguez, EVP-designate responsible for EU competition policy?

On 17 September 2024, European Commission (“Commission”) President Ursula von der Leyen (“President”), announced her proposed College of Commissioners (“College”) for her second 5-year term. The Commissioners-designate still need to be confirmed by the European Parliament (“EP”).

Of particularly interest from a competition policy perspective is the President’s mission letter (“Mission Letter”) to Teresa Ribera Rodríguez, the designated Executive Vice-President (“EVP-designate”) for a “Clean, Just and Competitive Transition”. The Mission Letter sets out the priorities and action plans of the European Commission for the next 5 years.

In this blogpost, we introduce EVP-designate Ribera and the tasks which the President has set for her, specifically on competition policy. 

About EVP-designate Ribera

Like many of her colleague Commissioners, past and present, EVP-designate Riberahas held several national ministerial posts: she has been serving as Spain’s Minister for Ecological Transition and Demographic Challenge since 2018 and has had two consecutive terms as Vice-President of the Spanish Government since 2020. She has also been serving as a member of the Spanish Parliament since 2019.

A lawyer by training, EVP-designate Riberahas also held high-level private and public posts focusing on sustainable development and climate change. She served as Spain’s State Secretary for Climate Change (2008-2011) and as director of the Institute for Sustainable Development and International Relations (2014-2018) – likely suitable experience given indications in her Mission Letter that these topics will only gain in relevance, both for the Commission and its competition portfolio.Continue Reading New Commissioner, New Mission, New Policy for Competition?

Updated October 1, 2024.  Originally posted September 19, 2024.

Last month, far-reaching proposals to regulate sports betting were introduced in the U.S. Senate and the House of Representatives by Senator Richard Blumenthal and Representative Paul Tonko which mark “the first comprehensive legislation that would address the public health implications inherent in the widespread legalization of sports betting.”  The bills, called the Supporting Affordability and Fairness with Every Bet (SAFE Bet) Act, would establish a broad federal scheme imposed on State gambling authorities to limit sports betting advertising, address problem gambling, and focus on other “public safety” measures. 

The SAFE Bet Act would establish a general nationwide prohibition on sports betting with an exception for States that receive approval from the Department of Justice (DOJ) to operate a sports betting program consistent with the requirements of the proposed legislation.  DOJ approval of a State’s application would be valid for three years and would be renewable.  To receive approval, a State would have to show that it meets minimum federal standards related to sports betting advertising, controls on customer deposits, general consumer-protection requirements, and the use of artificial intelligence (AI) by sports betting operators.  The following is a high-level summary of the key standards.

Advertising Limits.  The bills’ advertising standards include prohibitions on broadcast advertising between 8 AM and 10 PM (local time) and during live sports events.  Also, advertisements could not utilize common promotional mechanisms such as “bonus,” “no sweat,” or similar offers.  Advertisements also could not instruct the audience how to gamble or explain how wagers work.Continue Reading Bills to Regulate Sports Betting Introduced in Senate and House

Now that the EU Artificial Intelligence Act (“AI Act”) has entered into force, the EU institutions are turning their attention to the proposal for a directive on adapting non-contractual civil liability rules to artificial intelligence (the so-called “AI Liability Directive”).  Although the EU Parliament and the Council informally agreed on the text of the proposal in December 2023 (see our previous blog posts here and here), the text of the proposal is expected to change based on a complementary impact assessment published by the European Parliamentary Research Service on September 19.

Brief Overview of the AI Liability Directive

The AI Liability Directive was proposed to establish harmonised rules in fault-based claims (e.g., negligence).  These were to cover the disclosure of evidence on high-risk artificial intelligence (“AI”) systems and the burden of proof including, in certain circumstances, a rebuttable presumption of causation between the fault of the defendant (i.e., the provider or deployer of an AI system) and the output produced by the AI system or the failure of the AI system to produce an output.

Potential Changes to the AI Liability Directive

In July, news reports leaked a slightly amended version of the European Commission’s AI Liability Directive proposal to align the wording with the adopted AI Act (Council document ST 12523 2024 INIT).  The amendments reflect the difference in numbering between the proposed AI Act and the enacted version.

Over the summer, the EU Parliamentary Research Service carried out a complementary impact assessment to evaluate whether the AI Liability Directive should remain on the EU’s list of priorities.  In particular, the new assessment was to determine whether the AI Liability Directive is still needed in light of the proposal for a new Product Liability Directive (see our blog post here).Continue Reading The EU Considers Changing the EU AI Liability Directive into a Software Liability Regulation

In the past several months, two state courts in the District of Columbia and California decided motions to dismiss in cases alleging that the use of certain revenue management software violated state antitrust laws in the residential property rental management and health insurance industries.  In both industries, parallel class actions…

Continue Reading State Courts Dismiss Claims Involving the Use of Revenue Management Software in Residential Rental and Health Insurance Industries

On September 29, California Governor Gavin Newsom (D) vetoed the Safe & Secure Innovation for Frontier AI Models Act (SB 1047), putting an end, for now, to a months-long effort to establish public safety standards for developers of large AI systems.  SB 1047’s sweeping AI safety and security…

Continue Reading California Governor Vetoes AI Safety Bill

In a new post on the Inside Government Contracts blog, our colleagues discuss new reporting requirements by the Department of Commerce, Bureau of Industry and Security for the development of advanced AI models and possession of large-scale computing clusters.

Continue Reading Every Quarter, On the Quarter:  BIS Proposes New Reporting Requirements for the Development of Advanced Artificial Intelligence Models and Possession of Large-Scale Computing Clusters

On September 12, 2024, the European Commission announced that it will launch a public consultation on additional standard contractual clauses for international transfers of personal data to non-EU controllers and processors that are subject to the EU GDPR extra-territorially (“Additional SCCs”), something that has been promised by the European Commission…

Continue Reading EU Commission Announces New SCCs for International Transfers to Non-EU Controllers and Processors Subject to the GDPR