Sale of Brazil's state-owned tech firms threatens citizen privacy and national sovereignty, study says

Research outlines the risks associated to the privatization of Dataprev and Serpro.

The imminent sale of two government-owned companies could present serious risks to the privacy of Brazilian citizens and national sovereignty, according to research.

The conclusions are part of a study published by the Inter-Union Department of Statistics and Socio-Economic Studies (DIEESE), which has analyzed 200 public sector organizations in terms of their current scope and possibilities after the pandemic.

Warnings in relation to the future of Dataprev, the government's social security technology and information company, and Serpro, the federal data processing service, are outlined in the study. The organizations, which employ over 12,000 staff, are due to be sold in 2021 as part of the national privatization program.

Dataprev and Serpro are responsible for the most critical data storage and processing systems for the functioning of the federal administration, the DIEESE study argued. The companies handle data from the tax and social security, including registration and monthly payments of social security benefits to tens of millions of Brazilians. In addition, they are also responsible for the development and management of IT solutions underpinning the growing portfolio of digital citizen services.

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Beyond those aspects, the research noted two crucial factors that would justify retaining control of Dataprev and Serpro. "First, [government control of the state-owned tech companies] prevents the privacy of - potentially - the entire Brazilian population from being exposed to companies private companies, including multinationals", the study noted.

"Second, and perhaps even more relevant, it avoids handing over to the private sector-especially to large international information technology companies-strategic information that allows not only to deeply know the private data of each Brazilian citizen", the research added.

The DIEESE study also warns that a potential sale to the private sector could open up the possibility of "large scale manipulation", through use of psychometric and micro-targeting technologies for commercial and even military purposes, "seriously compromising national sovereignty"

When the privatization plans became known, Dataprev employees voiced concerns around what will happen to the personal data belonging to millions of Brazilians that it handles after the sale, warning that shifting data to private servers could be seriously damaging to Brazil.

The process relating to the privatization of Dataprev and Serpro, including the privatization modeling work, market research, national and international sectorial diagnosis and regulatory studies, as well as alternatives to privatization, is being handled by a consortium comprising of the Brazilian subsidiaries of global consulting firm Accenture and PR firm Burson-Marsteller, as well as law firm Machado, Meyer, Sendacz, Opice e Falcão Advogados. The studies began in January and will take place across three phases, with findings becoming publicly after each stage.