A Belgian court has rejected an appeal by Netflix to scrap a law imposing financial obligations on streamers in the country’s French speaking Wallonia-Brussels region.
However, in a win for Netflix, the court has referred key questions about the working of the financial obligation to the European Union’s Court of Justice.
The Belgian court ruled that Wallonia-Brussels’s investment obligation scheme is “proportionate” and “reasonably justified,” and rejected most of Netflix’s arguments.
Netflix’s appeal centred on a new law introduced in the Wallonia-Brussels region that mandates that streamers and broadcasters must invest up to a maximum 9.5% of revenues on Belgian French-language independent productions in the region. Disney also signed up to the case as an interested party.
The Wallonia-Brussels region argued that it needs such investment to allow its French-speaking community to flourish culturally and prevent it from being drowned out by content from its larger neighbour France. However, Netflix had argued that the scheme was “unworkable and contrary to the principles of the EU’s single market.”
While the court largely ruled against Netflix, it said key aspects of the scheme “raise questions under EU law”, including the inability to count the acquisition of distribution rights as an investment, how funds paid into a public body are used, and whether companies can offset contributions imposed in other EU countries.
This opens the prospect of a wider challenge by Netflix in Europe’s top court against the EU’s Audiovisual Media Services Directive (AVMSD), which allows EU states to impose financial obligations on broadcasters and streamers to support the production of European works, and is currently under review.
In a joint statement, key film industry associations described the decision as “largely favourable to the contribution of streaming platforms and to cultural diversity in Belgium.”
The associations Les Professionnels de la production et de la création audiovisuelle (Pro Spere ASBL), the Union des producteurices francophones de films & séries (UPFF+), the Société des Auteurs Audiovisuels (SAA AISBL), the Association des producteurs indépendants (ARPI), and the European Producers Club (EPC), said: “This case goes beyond the framework of a purely Belgian dispute. It raises a central question for the future of the European cultural model: can global platforms develop in national markets without contributing in a fair and proportionate way to the creative ecosystems that make these markets attractive?”
Julie-Jeanne Régnault, managing director of the European Producers Club, said: “We welcome the Court’s decision to reject most of Netflix’s complaints, reaffirming Member States’ competence in cultural policy and their broad margin of discretion in determining the level of financing obligations. We take note of the four preliminary questions referred to the Court of Justice of the European Union, which do not call into question the validity of the scheme but concern specific modalities, notably the types of eligible investments.”
In a statement, a Netflix spokesperson said: “We acknowledge the Belgian Constitutional Court’s decision regarding our challenge and the referral to the European Court of Justice. We agree that the ECJ is best suited to look into this matter further. We will now study the decision in detail.”
