Streaming Giants Challenge New Canadian Regulations to Fund Local News: A Legal Battle

In response to new Canadian regulations that require streaming companies, including Netflix and Walt Disney Co, to fund local news, global streaming giants have filed a legal challenge. The Motion Picture Association-Canada (MPA-Canada), representing these companies, has submitted applications in federal court seeking a judicial review. They argue that Canada’s federal government acted irrationally and provided no legal basis for the demand.

In June 2021, the Canadian Radio-television and Telecommunications Commission (CRTC) announced that major online streaming services must contribute 5 percent of their Canadian revenues to support domestic broadcasting. This includes news production. However, MPA-Canada criticized the decision, stating that there was no justification for requiring foreign online services to contribute to news generation.

The CRTC defended its decision by stating that the funding would support areas in immediate need within the broadcasting system, such as local news, French-language content, and Indigenous programming. Despite criticism from MPA-Canada and other industry stakeholders, the regulator remained silent on further commentary until it became clear that the matter was before the courts. These rules are set to take effect in September and are expected to raise approximately $146 million annually.

These measures were introduced as part of a law passed last year aimed at promoting Canadian music and content while supporting Canadian jobs in the entertainment industry. In addition to Netflix and Walt Disney Co., MPA-Canada also represents streaming platforms offered by Paramount, Sony, NBCUniversal, and Warner Bros Discovery.