In November 2025, ARTICLE 19 and ARTIGO 19 (ARTICLE 19 Brazil and South America) contributed to the Brazilian government’s consultation on the National Data Centre Policy. In our submission, we urge the Brazilian government to adopt an approach that places less emphasis on data localisation, and instead prioritises regulatory models that address market concentration and risks stemming from technical dependencies, focusing on sustainable planning to avoid environmental and societal harm.
Echoing a global trend for digital infrastructure development, the government of Brazil is investing in data centre expansion, with planned measures aimed at reducing operating and investment costs by up to 30%. This interest in developing data centres in Latin America’s largest country is part of a larger global turn towards data centre expansion – one that is visible from Belém to Berlin. Behind the Brazilian initiative lies a narrative of ‘digital sovereignty’, which promises to reduce dependence on foreign Big Tech companies and infrastructure, to secure control over national data. Yet, the sovereignty rhetoric often obscures more than it reveals.
The government argues that Brazil lacks the capacity to meet its internal data storage needs and that around 60% of Brazilian data is currently processed abroad. Hosting data domestically, authorities say, is more expensive due to economic barriers and tax inefficiencies. The proposed solution, therefore, is to promote large-scale data centre construction within national borders. To this end, the government published a Provisional Measure with tax incentives for companies willing to build facilities within its borders, and a public call for contributions for a National Data Centre Policy.
A number of Brazilian civil society organisations have been calling out these issues, criticising the environmental impacts of the large and resource-intensive infrastructures. Organisations have highlighted weak environmental safeguards, with sustainability criteria remaining vague and deferred to future regulation, and the absence of impact assessments for water, energy, and community effects. They’ve pointed out that Brazil’s energy grid, though largely renewable, is not infinite, and energy-intensive data infrastructure could displace other sectors or deepen regional inequalities.
Drawing on ARTICLE 19’s submission to the Brazilian government’s consultation on the National Data Centre Policy, here we consider what ‘digital sovereignty’ means in practice –and what it risks becoming when reduced to data localisation and attracting foreign investment for data centre development. In addition to the concerns already raised by civil society, we highlight additional urgent dimensions: how market structure and technical control determine whether infrastructure genuinely serves public interests or simply relocates existing dependencies on Big Tech.
Policy evolution and its contradictions
Over the past few months, Brazil’s data centre expansion has been discussed under the umbrella of a forthcoming ‘national data centre policy’, but without a public draft being made available for scrutiny. In early September 2025, the government published a Provisional Measure offering tax benefits for companies investing in data centre development.
Although the policy includes criteria related to the use of renewable energy and parameters for water and energy efficiency, it is based on assumptions that warrant closer scrutiny, revealing two fundamental paradoxes.
The first paradox concerns ownership and control. The central idea underlying the policy – that local data hosting guarantees sovereignty – is misleading. Even if data is stored within Brazilian territory, most of the new facilities are likely to be owned or operated by foreign hyperscalers, like Amazon Web Services (AWS), Google, and Microsoft – the same handful of American corporations that dominate global cloud markets. If these companies were to build Brazilian data centres, any data stored in Brazil could still fall under laws such as the US Cloud Act, which compels US-based companies to hand over data upon request by American authorities, regardless of where it is physically located. Moreover, data hosted in Brazil is not necessarily Brazilian data – data centres can store global datasets for companies and users worldwide.
The second paradox emerges around market structure. By offering generous tax incentives to foreign tech companies without corresponding governance requirements, the policy risks inviting precisely the kind of market concentration it should be addressing. Without measures on interoperability or oversight of ownership structures, the expansion of local infrastructure could simply extend the hold of American Big Tech companies over Brazilian data centres and its industry. This hold would extend into every aspect of Brazilian society that comes to rely on these new data centres, from public media, to hospitals, to governments – with all the well-known dangers of such a stranglehold that ARTICLE 19 has outlined elsewhere.
The real question, therefore, is not just where data is stored, but who owns, controls, and governs the data centres that store and process it. There must be greater clarity about Brazil’s existing data centre capacity – including who operates these facilities and under what governance models. Not all data centres are alike, with different business and service models ranging from hyperscale facilities to colocation centre providers, enterprise data centres, and smaller edge facilities.
Without addressing these fundamental contradictions, data centre expansion risks deepening Brazil’s technological dependency even further.
Sovereignty as rhetoric, concentration as reality
Brazil must not fall for a tale of ‘digital sovereignty’ without truly examining whether what lies ahead is a genuine promise or merely an illusion. This becomes especially clear when we consider the evolution of Brazil’s data centre policy and its intrinsic contradictions in-depth.
In responding to the Brazilian consultation, ARTICLE 19 urges the Brazilian government to adopt an approach that looks beyond data localisation, and toward more comprehensive regulatory models that encompass market and state power as well as technical dependencies.
The current debate remains narrowly focused on fiscal incentives and competitiveness, while sidestepping broader questions of governance and market power. In particular, the proposed data centre policy offers tax breaks to Big Tech without requiring interoperability standards or diversification of cloud dependencies. This allows companies to lock users into their ecosystems while public services and critical infrastructure risk becoming reliant on a handful of global hyperscalers.
The long-term effects of the government’s current policy when it comes to market concentration and strengthening the infrastructural hold of Big Tech globally deserve closer scrutiny. Questions like ‘Does hosting data domestically actually deliver sovereignty or does it simply relocate dependency while leaving power structures intact?’ remain unanswered. In addition, the current Brazilian approach raises fundamental questions about who will own and operate these data centres, and whether localisation alone can address deeper issues of market concentration and equitable governance.
By leaving these structural issues unexamined, Brazil risks embracing the rhetoric of ‘digital sovereignty’ while replicating the very dependencies it claims to want to escape. Real engagement with the need for digital self-determination requires confronting who controls, owns, and operates data centres, not just the data and software it hosts.
Towards regulatory alternatives
The current debate focuses heavily on physical infrastructure – the data centres themselves. But they are just one piece of a much larger puzzle. In ARTICLE 19’s submission, we proposed several measures that take a more systemic approach:
- Dependency risk assessments: Public institutions and critical infrastructure operators should map their dependencies on various data centre providers, identify single points of failure, and adopt diversification requirements to avoid overreliance on a single provider.
- Governance standards: Establish oversight over market concentration, requiring companies to disclose ownership structures and critical dependencies, with accountability mechanisms for anti-competitive practices and environmental obligations.
- Sustainable infrastructure planning: Avoid reproducing environmental and social harms. Support community networks and small operators for last-mile connectivity. Develop data centres in dialogue with local environmental and social conditions.
Looking beyond
Brazil’s government initiative to set parameters for the development of data centres can be an opportunity – but to really take a leap forward, policymakers need to look beyond the frame of ‘digital sovereignty’, data localisation and attracting foreign investment.
Appeals to sovereignty can have their own downsides. The rhetoric can be used to serve agendas that don’t necessarily align with broader public interest and human rights. The question shouldn’t simply be whether data stays within borders, but whether governance structures and regulation protect rights, promote competition, and serve democratic accountability.
Paying attention to these aspects is essential to avoid falling for illusions. The tale of digital sovereignty can be compelling, but without addressing market concentration and governance across the digital stack, Brazil risks building infrastructure without real benefits for its population and public interest.