The French Community of Belgium has made it all the way to Hollywood, as the leading US entertainment website Variety reported on the community's triumph over streaming giant Netflix.
A decision by Belgium's Constitutional Court surprisingly became one of the most-read stories on Variety's website last weekend. Variety referred to the decision as a "potentially landmark case" as its outcome may set an important precedent.
As the outlet reported, the Belgian court dismissed a legal challenge from Netflix, which had appealed against the implementation of European Union rules requiring streaming platforms to fund local productions.
The French Community of Belgium (also referred to as the Wallonia-Brussels Federation) decided in 2023 that Netflix, as well as competitors such as Disney+, must increase their investment in local French-language content from 2.2% to 9.5% of their turnover by 2027.
'Disproportionate and discriminatory'
Under EU legislation, foreign streaming services are required to invest a portion of their revenue into local productions. How big this portion should be is up to the individual Member States.
In Flanders, streaming services are also obliged to reinvest a portion of their revenue in Flemish fiction, either through a contribution to the Flemish Audiovisual Fund (VAF) or by investing in a specific series. Since last year, this obligation has also been extended to Google/YouTube, Meta and TikTok, which have also brought a case on this matter before the Constitutional Court – although that is still pending.
Netflix called the French Community's decision to raise this percentage to 9.5% "disproportionate and discriminatory", arguing that it is far too high for the small market that the Francophone part of Belgium and its local creative sector ultimately represent.
Now, the Constitutional Court ruled that the French Community Government is entitled to make this demand, stating that "the rate of 9.5%, although higher than the rates in most other EU Member States, is not disproportionate".
Credit: Pxfuel
The court also added that there were additional questions on its application that have been sent to the EU Court of Justice for an opinion. Importantly, these questions do not call into question the validity of the French Community's scheme, but concern specific modalities, such as the type of eligible investments.
"We acknowledge the Belgian Constitutional Court's decision regarding our challenge to the Wallonian investment obligation and the referral to the European Court of Justice," a Netflix spokesperson told Variety.
"We agree that the ECJ is best suited to look into this matter further. We will now study the Court’s decision in detail," they added.
While a final ruling has not yet been issued, this is already being considered a first defeat for Netflix.
