Belgium’s Constitutional Court has rejected a Netflix appeal opposing local production investment obligations in the country’s French-Speaking Wallonia-Brussels region.
Netflix filed the appeal last summer in response to a 2024 decision by the Wallonia-Brussels Federation (FWB) to oblige streamers operating in the region to invest up to 9.5% of their turnover in the territory in local production, against 2.2% before.
The obligation was imposed within the tenets of the European Union’s 2018 Audiovisual Media Services Directive (AVMSD) under which streamers must ensure that at least 30% of their content offering is European in origin.
The transposition of the directive into law across the EU has seen some territories impose obligations around investment in local productions, as well as special clauses to protect producer independence and the ring-fence rights.
While widely dismissing the appeal, the Court also referred preliminary questions to the Court of Justice of the European Union (CJEU) regarding certain aspects of the obligation mechanism., leaving the legal debate open.
European audiovisual professional organisations Pro Spere, UPFF+, SAA AISBL, ARPI, and the European Producers Club (EPC) welcomed the ruling in a joint statement on Friday and also downplayed the CJEU referral.
“The referral of certain questions to the Court of Justice of the European Union must be interpreted carefully and without exaggeration,” they said.
“It does not call into question the principle of platform contributions, nor the overall validity of the objective pursued. It concerns specific aspects of the scheme, including certain eligible forms of investment, the consideration of possible contributions paid in other Member States, and certain technical aspects of implementation.”
The bodies, representing thousands of producers, directors, writers, composers and performers from across the EU, noted that the decision was significant from a cultural standpoint, especially for a relatively small territory such as the Wallonia-Brussels region.
“The Court recognizes the legitimacy of the legislator’s objective, namely the promotion of cultural and linguistic diversity. It also validates the principle that a significant share of investments must benefit French-speaking Belgian audiovisual works,” it read.
“This point is fundamental: it acknowledges that cultural diversity cannot be preserved without concrete instruments, structured financing, and effective support for works, talents, and creative sectors rooted in Belgium.”
The ruling also has strong significance for an ongoing five-yearly review of the AVMSD, which was passed in 2018 with a requirement for EU members to transpose it into law by September 2020.
U.S. streamers and studios are expected to step up lobbying for the softening of some of the directive’s obligations and quotas during the review period.
There have been suggestions that the Netflix appeal against the Wallonia-Brussels region obligations was also an attempt to set a legal precedent in Europe with which to counter AVMSD-supported obligations in other European territories.
Contacted by Deadline for comment, Netflix replied with the following statement: “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. We agree that the ECJ is best suited to look into this matter further. We will now study the Court’s decision in detail.”