Global streaming services to challenge Canada’s broadcasting payment rule in court

Several global streaming services are challenging a recent Canadian directive requiring them to pay into the national broadcast sector.

Last month, the Canadian Radio-television and Telecommunications Commission (CRTC), under the Online Streaming Act, began requiring foreign streamers to contribute five percent of Canadian revenue to local news production and Canadian content.

Now, the Motion Picture Association-Canada (MPA-Canada), which represents the likes of Disney+, Netflix and Paramount+, has filed two legal challenges in Federal Court to oppose this new rule. Online streamers who aren’t affiliated with a Canadian broadcaster and make at least $25 million in Canadian revenue are subject to the directive.

In the July 4th legal applications, MPA-Canada is seeking leave to appeal and a judicial review of the CRTC’s ruling.

“The decision does not reveal any basis for the CRTC’s conclusion that it is appropriate to require foreign online undertakings to contribute to news production,” wrote MPA-Canada in its legal filing. “The CRTC acted unreasonably in compelling foreign online undertakings to contribute monies to support news production.”

Meanwhile, U.S.-based Digital Media Association says three of its members — Amazon, Apple and Spotify — have filed their own legal challenges in response to what it calls a “backward-looking” decision from the CRTC.

The CRTC, for its part, has said the new ruling will bring $200 million into Canada’s broadcasting system annually. (Notably, this is markedly below the $1 billion the Department of Canadian Heritage estimated that the Online Streaming Act would generate.) The government argues that this requirement will help level the playing field between foreign streamers owned by tech giants and traditional broadcasters who already contribute to Canadian content.

It’s worth noting that The Globe and Mail film editor Barry Hertz indicated last month that the CRTC’s decision was final, so it remains to be seen what, if anything, will come out of streamers’ applications to the federal court.

In related news, major foreign tech companies are also taking issue with Canada’s recently enacted Digital Services Tax, which sees them subject to a three percent levy on Canadian revenue. Experts suggest the U.S. might respond with some sort of trade retaliation, while streamers may consider raising subscription prices.

Via: CP24