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Streaming giants challenge new Canadian revenue-sharing rules

Major global streaming companies are fighting back against new Canadian regulations. On Thursday, these companies argued that the rules, which require them to contribute to the funding of local news, are unreasonable and lack legal justification.

The Canadian government, through its broadcasting regulator, the CRTC, introduced these regulations in June. The CRTC mandated that major streaming services set aside 5% of their Canadian revenue to support the domestic broadcasting system, which includes funding for news production.

The Motion Picture Association-Canada (MPAC), representing companies like Netflix and Disney, is leading the charge against the new regulations. They filed an appeal in a federal court, arguing that the CRTC overstepped its bounds. The MPAC is requesting a judicial review of the rules, claiming the government failed to provide a legal justification for demanding financial contributions from streaming services.

“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,” it said in a legal filing.

“The CRTC acted unreasonably in compelling foreign online undertakings to contribute monies to support news production.” 

Meanwhile, the CRTC maintains that the collected funds will address critical needs within the Canadian broadcasting system. Their priorities include supporting local news on radio and television, as well as content produced in French and by Indigenous creators.

The CRTC, unsurprisingly, declined to comment while the legal battle unfolds in court. Previously, they estimated the new regulations, set to take effect in September, would generate roughly C$200 million (around $146 million) annually.

These regulations stem from a law passed last year. The Canadian government’s stated goal is to ensure online streaming services contribute to the country’s cultural landscape. This includes promoting Canadian music and stories while also supporting jobs in the Canadian entertainment industry.

The Motion Picture Association-Canada (MPAC) represents a wide range of streaming platforms beyond just Netflix and Disney. Their membership includes services offered by Paramount, Sony, NBCUniversal, and Warner Bros Discovery.

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BRL Editor
BRL Editorhttps://businessreviewlive.com
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