Long story short, this is exactly the same standoff that happened recently in the US between the FBI and Apple: the authorities want information from a suspect phone, and assume they can get it from a company, in this case WhatsApp. A warrant is issued, and the company refuses to comply.
The big difference is: WhatsApp has been a major headache for telecom companies in Brazil, especially since the arrival of voice calls. With Wifi everywhere, people have been avoiding expensive traditional calls and just using WhatsApp to call for free.
For that reason, the telcos in Brazil are more than happy to comply with court when it comes to WhatsApp blocks, so they do it right away, no questions asked.