A lawsuit challenging the “base contribution” element of the Online Streaming Act can move forward according to Federal Court of Appeal.
It was bound to happen.
One of the things I’ve long argued about the Online Streaming Act since the very beginning of this sorry debacle is that it was going to spark a lawsuit. One of the reasons why it was a litigation magnet is because it steals money from online streaming platforms and gives it to legacy media players who long dismissed the internet as little more than a fad that would go away on its own. Thanks to the internet not just “going away on its own”, the legacy media companies responded by saying that they feel slighted and that they should make huge amounts of money no matter how many tune out and go directly to the internet to get their entertainment and information.
Of course, both the government and legacy media company dress this up in a term known as “base contribution”. In short, it requires the streaming platforms to fork over a percentage of their revenues so that the legacy media companies can get that money for free so they can continue making the programming and content fewer and fewer Canadians have any interest in consuming. This under the argument that the legacy media companies feel that they deserve free money for no real reason because they are important and that they alone can represent Canadian culture (spoiler alert: they don’t have that exclusivity). After all, they are entitled to success for all eternity (no they are not), so who could possibly argue against that?
Obviously, many experts and observers have long warned of the consequences of the Online Streaming Act (formerly Bill C-11). This ranged from increased cost to consumers, screwing over digital first creators, trade retaliation from the US, messing with consumer choice, and, of course, the threat of obvious litigation that was less of a matter of “if” and more of a matter of “when”. Despite calls for common sense, the Canadian government, for it’s part, ignored all common sense and rammed Bill C-11 through anyway.
With the legislation currently working it’s war through the CRTC regulatory process, it seems little can be done to try and insert even the smallest amount of common sense into the process. The CRTC has a mandate to blow up the internet and that’s exactly what they intend to do. Amidst the murky froth that is the CRTC regulatory process (which it has done an impeccable job at keeping the general public and artists alike out of the process), the CRTC released it’s decision on funding distribution among the entities that really control the process – the legacy media.
In doing so, however, it finally gave the green light for the platforms to fire up their litigation engines – and that is exactly what they did. The first lawsuit against the Online Streaming Act was filed back in May. A second lawsuit was subsequently filed in July. We don’t know if there are any more, but what we do know is that multiple lawsuits were predictably filed against the CRTC. So, the litigation process has already begun – something that anyone paying attention could have easily predicted.
Now, we are learning that the lawsuits filed against the CRTC have been consolidated. This thanks to a decision made by the Federal Court of Appeal which also ruled that the lawsuits against the CRTC can proceed. From CARTT:
The Federal Court of Appeal ruled Monday that the major foreign streamers may have a legitimate grievance against the imposition by the CRTC of a base financial contribution levied on them to support Canadian content.
The high court granted a hearing to Apple, Amazon, Spotify, and the Canadian affiliate of the Motion Picture Association (MPA) – which represents Netflix, Paramount, Pluto, and Crunchyroll – after the parties filed their own applications against the proposed June decision, which was finalized in August. The court consolidated all the leave applications before making the decision.
In approving the applications, the court rejected a submission by the Canadian Association of Broadcasters (CAB) that sought to have the court throw out the applications on the grounds that the CRTC decision is a matter of policy, not law, and that the parties were challenging a proposal that had yet to be finalized, which it said made the leave applications irrelevant. The court, however, gave the streamers an opportunity to amend their applications to incorporate the CRTC’s final order in August.
So, yet another prediction made around here is coming true and litigation is proceeding against the Online Streaming Act and the CRTC. Obviously, the litigation process is going to take a while to sort out and there’s still a lot that has to be decided still. Whether that delays the implementation process of the Online Streaming Act remains to be seen (it’s entirely possible).
(Via @Pagmenzies)
