Privatization of Serpro poses risks to Brazilian data, says researcher | Brazil

Among the main points on the current agenda of the Ministry of Economy, in which minister Paulo Guedes is at the head, is privatization. One of them is Serpro – Federal Data Processing Service -, which entered the PND (National Privatization Program) after decree of the President of the Republic in January 2020. But a study carried out by a researcher at USP (University of São Paulo) states that the privatization of the largest federal data operator should give the owner unprecedented competitive power, in addition to running into LGPD rules.

Serpro Headquarters in Salvador, Bahia (Image: Serpro/Disclosure)

Serpro’s privatization could generate monopoly

The sale of Serpro could give its controller excessive power to compete in the market and several undue advantages if, by chance, the company’s database is not deleted. This is the assessment of the Economic Law professor and researcher at USP, Diogo Coutinho.

In his study of the privatization case of the federal data operator, Coutinho assesses that Serpro’s legal regulations must be reformulated to prevent the sale from harming the state’s public policies.

The new laws that regulate Serpro must prevent the commercialization of data from a base of millions of Brazilians. With the privatization of the company, if it is in fact completed, as the government intends, it is necessary to sign legal commitments for whoever becomes the total or partial owner of the state-owned company, says Coutinho.

The researcher says that, if this does not happen, privatization could become a headache for the government:

“If this does not happen or does not occur satisfactorily, legal uncertainty may not only undermine the government’s privatizing pretensions by making the future private company’s performance uncertain, but – more serious – it may lead to the dismantling of important public actions in the area of information technology and data processing.”

For MPF and researcher, privatization violates LGPD

The Federal Public Ministry (MPF) released a note on March 4, in its official electronic journal, in which it questioned Bolsonaro’s decree to include Serpro in the PND. According to the agency, the sale of the state-owned company runs into legal obstacles for the LGPD.

Federal Public Ministry

Headquarters of the MPF in Cáceres, MT (Image: MPF/Disclosure)

Diogo Coutinho confirms that the provision of the General Data Protection Law that prohibits the use of data collected for purposes of public security, national defense and State security cannot be accessed by private entities is a legal obstacle to privatization — in the case of Article 4 of the LGPD.

Serpro is an agency under the umbrella of the Ministry of Economy. It therefore processes Brazilian citizens’ Income Tax data — information used for “state security”, according to the MPF.

ANPD does not participate in the discussion due to lack of structure

For Diogo Coutinho, the role of ANPD (National Data Protection Authority) in Serpro’s privatization discussions is fundamental. It must reformulate the data operator’s statute so that the sale fits the LGPD’s terms, conferring public duties on companies interested in the state-owned company.

ANPD (National Data Protection Authority) (Image: Reproduction)

ANPD (National Data Protection Authority) (Image: Reproduction)

“ANPD has a role it cannot give up in the eventual privatization of Serpro: the articulation with which it models the process (the BNDES), as well as participation in an institutional communication forum, through technical cooperation, with other bodies administration involved in the process”, points out the researcher and professor of Economic Law at USP.

However, ANPD is not yet fully structured to dialogue with BNDES and other bodies involved in talks about the privatization of Serpro, such as Cade (Administrative Council for Economic Defense).

The agency has not even established its own regulations to act on the sector it oversees. It has just officially published a guide for defining data controllers in public and private companies. For now, nothing about regulation of acquisitions from a federal data operator like Serpro.

Researcher criticizes lack of details in government project

Finally, Coutinho criticized the decrees of the Ministry of Economy that warn about the inclusion of Serpro in the PND. For the researcher, the government did not provide enough details on how the state-owned company should operate if it is sold, nor on the model of privatization — whether it will be total or whether the Union will still have participation as a shareholder.

The future of Serpro is uncertain for Brazilian society, points out Coutinho. For him, negotiations must be transparent and with the participation of civil society — citizens are the holders of the data processed by the state-owned company.

“Without this, Serpro’s privatization will be no more than a demagogic adventure, with all the negative consequences that this will bring to the population”, concludes the researcher.

With information: Digital Convergence

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