Global streaming services such as Netflix and Disney Plus are challenging a regulatory policy under the Online Streaming Act that would provide financial support to the Canadian broadcasting sector, including for local news.
The Motion Picture Association-Canada, which also represents the platforms HAYU, Sony’s Crunchyroll, Paramount Plus and Pluto TV, has filed two lawsuits in federal court in response to the new rule.
The Canadian Broadcasting and Telecommunications Commission said in June that foreign broadcasters must pay five percent of their annual revenue from Canada into a fund dedicated to the production of Canadian content, including local television and radio news, as well as Indigenous and French-language content.
According to the CRTC, streaming companies that are not affiliated with a Canadian broadcaster and generate at least $25 million in revenue in Canada would have to pay into the fund, which is expected to inject about $200 million into the system each year.
MPA-Canada is seeking leave to appeal and a judicial review of the CRTC’s decision, arguing that the regulator does not have the legal authority to compel foreign companies to support Canadian news production and that “legal and jurisdictional errors” were made.
The US-based Digital Media Association also announced that three of its members – Amazon, Apple and Spotify – had filed a lawsuit against the mandatory financial contributions. They described the CRTC’s decision as “backward-looking” and untenable.
The CRTC said in a statement on Friday that it would “continue to maintain a balance between comprehensive consultation and expeditious action in creating a new regulatory framework,” but declined to comment on the streamers’ lawsuits because the case is pending in court.
While the CRTC’s move is intended to create a level regulatory playing field for tech giants and cable companies, a spokesperson for MPA-Canada said requiring global entertainment streaming services to pay for local news was “a discriminatory measure that goes far beyond the intentions of Parliament.”
“Our members’ streaming services do not produce local news, nor do they enjoy the significant legal privileges and protections enjoyed by Canadian broadcasters in exchange for the responsibility of providing local news,” the group’s president, Wendy Noss, said in a statement.
In its court filings, MPA-Canada also argues that the CRTC rule could indirectly allow foreign streamers to share confidential revenue information with the Canadian broadcasters they compete with.
The Digital Media Association has also expressed concern about its members being required to share “sensitive commercial information” with third parties, including Canadian broadcasters.
“The approach taken is backwards and represents poor policy by the current Canadian government. It also fails to recognize the existing contribution of streaming to music production,” the association wrote in a statement calling on the CRTC to reconsider the implementation of the online streaming law.
This report by The Canadian Press was first published July 5, 2024.
The Canadian Press
