Belgium’s Constitutional Court has rejected a legal challenge by Netflix, which was appealing against the implementation of European Union rules requiring streaming platforms to fund local productions in French-speaking Belgium.
The potentially landmark case centers on a 2023 Decree issued by the tiny Walloon-Brussels Union, one of Belgium’s three federated communities and home to 4.6 million French-speaking residents in Brussels and Wallonia. The Walloon-Brussels Federation said streamers including Netflix and Disney+ must increase their investment in supporting local French-language content from 2.2% of regional sales to 9.5% by 2027.
On Thursday, a Belgian court ruled that most of the legal requirements issued by the Walloon-Brussels Federation remain in place. However, it added that it had further questions regarding the application and that it had been referred to the EU Court of Justice for an opinion.
Europe’s Audiovisual Media Services Directive (AVMSD) requires foreign streaming services to invest a portion of their revenue in local productions, but the nature of this obligation is left to each country.
The Belgian ruling comes amid a review of the EU’s AVMSD directive in Europe amid U.S. President Donald Trump’s tariff battle, and U.S. distributors have stepped up their lobbying efforts to amend some of the directive’s obligations. Netflix and Disney+ believe that the investment obligations imposed by Wallonia are disproportionate, given the size of the Wallonia-Brussels region. They claim they are unreasonable because of their small creative community and their violation of the principles of the EU single market.
The case has now been referred to the EU Court of Justice, opening up a new judicial forum for this battle. The first hearing in the case in this court is scheduled for June.
“We welcome the court’s decision to dismiss the majority of Netflix’s claims and reaffirm member states’ capacity in cultural policy and broad discretion in determining the level of financing obligations,” said Julie-Jeanne Regnault, managing director of the European Producers Club, an umbrella organization that has been directly involved in supporting the French-speaking Belgian government, along with other industry associations in Belgium and Europe.
“We take note of the four preliminary questions referred to the Court of Justice of the European Union. These questions do not call into question the effectiveness of the regime, but concern specific schemes and, in particular, the types of eligible investments,” she added.
A Netflix spokesperson said: “We acknowledge the decision of the Belgian Constitutional Court regarding our challenge to Wallonia’s investment obligation and the referral to the European Court of Justice. We agree that the ECJ is the best place to investigate this matter further. We will now consider the court’s decision in detail.”
