OTTAWA, July 4 (Reuters) - Global streaming companies
said on Thursday they were challenging new Canadian rules that
oblige them to help pay for local news, saying Canada's federal
government had acted unreasonably and provided no legal basis
for the demand.
The Canadian Radio-television and Telecommunications
Commission (CRTC), the national broadcasting regulator, said in
June that major online streaming services must contribute 5% of
their Canadian revenues to support the domestic broadcasting
system, including news generation.
The Motion Picture Association-Canada, which represents
Netflix ( NFLX ), Walt Disney Co ( DIS ) and other companies,
has filed applications in a federal court for leave to appeal
the rules and ask for a judicial review.
"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."
The CRTC said the funding would be directed to areas of what
it called immediate need in the broadcasting system, such as
local news on radio and television as well as French-language
and Indigenous content.
The regulator declined to comment because the matter is
before the courts. It has previously said the rules, which are
due to become effective in September, will raise roughly C$200
million ($146 million) a year.
The measure was introduced under the auspices of a law
passed last year that the federal government says will ensure
online streaming services promote Canadian music and stories and
support Canadian jobs.
Other streaming platforms the MPA-Canada serves include
those offered by Paramount, Sony ( SONY ), NBCUniversal and
Warner Bros Discovery ( WBD ).