Should international streaming services co-pay for local productions?

International streaming services such as Netflix and Disney+ may be legally required by Belgian authorities to contribute financially to the local audiovisual sector. The Constitutional Court ruled in its ruling of March 26, 2026 that the core of this investment obligation and a progressive rate of up to 9.5% on turnover are legitimate and proportionate. While the principle remains intact, some specific modalities of application (such as the rules around double taxation) do remain subject to review by the European Court of Justice.

The facts and legal context

On December 7, 2023, the French Community adopted a decree that significantly tightened the rules around contribution to audiovisual production. This decree requires publishers of linear and non-linear television services (such as streaming platforms) to contribute financially to local audiovisual creation.

This contribution can take two forms:

• Direct investment in the co-production or pre-purchase of audiovisual works or in the ordering of programs.
• A direct financial deposit to the Centre du Cinéma et de l'Audiovisuel (CCA).

In addition, the legislature introduced a progressive rate based on turnover, which rises to 9.50% for the largest players (with a turnover of 150 million euros and above).

Netflix (joined by Disney) went to the Constitutional Court to demand the annulment of this decree. They argued that the regulation violated several European directives, restricted the free movement of services and disproportionately infringed on freedom of enterprise and freedom of expression.

By the way, this case has a wide scope for all of Belgium. The Flemish Community has also recently introduced a similar, comprehensive incentive scheme , which is currently being challenged by major tech companies such as Google, Meta and TikTok in that same Constitutional Court.

Constitutional Court's decision

In its March 26, 2026 ruling, the Constitutional Court rejected the streaming platforms' main objections, although it does not yet rule definitively on the entire decree.

• The principle is legitimate: The Court rules that the investment obligation does not violate European law. The European AVMSD Directive (2010/13/EU) explicitly allows member states to require financial contributions from media services that target their audiences, even if these companies are based in another member state.
• The rate of 9.5% is proportional: Although Netflix argued that the top rate of 9.5% was disproportionate and protectionist, the Court ruled otherwise. Because the system is progressive and takes into account companies' financial strength, it is a reasonable measure to promote cultural and linguistic diversity. Moreover, the tariff will be phased in until 2027.
• No illegal state aid: The Court rejects the argument that this scheme would constitute unlawful state aid. The measure is not financed from state resources, as it is compulsory investment from private companies' own resources without state control.
• Prejudicial questions: However, the Court deferred final judgment in order to first submit five preliminary questions to the European Court of Justice (ECJ). These questions concern technical but important modalities of application. For example, the Court wants to know whether refusing to invest in already existing European productions is proportionate and whether Belgium is obliged to take into account contributions that Netflix may have already paid in other member states in order to avoid double taxation.

Legal analysis and interpretation

This ruling is a textbook example of the delicate balancing act between the fundamental economic freedoms of the European single market on the one hand, and the protection of cultural identity on the other.

Netflix relied heavily on the E-Commerce Directive (2000/31/EC) and the country-of-origin principle contained therein. However, in line with recent European case law, the Constitutional Court confirms the lex specialis nature of Article 13(2) of the AVMSD. This provision creates an explicit exception: Member States may impose extraterritorial charges to promote “European works”.

Very interesting is the application of the so-called Uteca caselaw of the European Court of Justice. The Constitutional Court follows the reasoning that obstacles to the free movement of services and freedom of establishment can be justified by overriding reasons of general interest, in particular the preservation of multilingualism and national culture. The fact that a quota of 35% for investment in “French-speaking Belgian audiovisual works” de facto mainly benefits local producers is considered by the Court as inherent to the legitimate aim, and thus not a disproportionate discrimination.

Nevertheless, the Court shows caution on the cumulation prohibition. By asking preliminary questions on Article 13(3) of the AVMSD, the Constitutional Court forces the ECJ to rule on the risk of double taxation for international platforms. If the ECJ rules that member states must compulsorily deduct levies from the country of establishment from the local levy, this could substantially affect the ultimate financial return of the Walloon (and by extension the Flemish) decree.

What this specifically means

The impact of this (preliminary) decision is rippling throughout the media sector:

• For international streaming and video platforms: The basic principle stands. Foreign platforms that earn money from Belgian consumers will have to contribute to the local ecosystem. The argument that such levies are by definition contrary to freedom of enterprise or constitute state aid is off the table. The only prospect for relief remains via the European Court of Justice on the avoidance of double taxation.
• For local producers, directors and authors: This ruling is a huge boost. It secures structural and substantial private investment in the local creative sector, reducing reliance on public subsidies.
• For the Flemish incentive scheme: Although this ruling is formally only about the French Community decree, the precedent value is considerable. The Flemish extension of the investment obligation to platforms such as YouTube and TikTok leans on exactly the same European legal grounds. That the Constitutional Court validates the principle, high rates and lack of state aid in this Francophone case is a strong indication that the Flemish regulation may largely survive the ongoing proceedings.

Frequently asked questions (FAQ)

Can Belgian governments force foreign streaming services to invest in local films?
Yes. The Constitutional Court has confirmed that the European Audiovisual Media Services Directive (AVMSD) allows member states to require financial contributions from platforms targeting their territory, even if those platforms are based in another country. This serves to protect cultural and linguistic diversity.

Isn't a mandatory contribution of 9.5% of sales illegally high?
According to the Constitutional Court, this is not disproportionate. Because the scheme works with tranches, this top rate only applies to sales from €150 million and up. Moreover, platforms get to choose which productions they invest in, allowing them to derive commercial income from those works.

Is this ruling on the investment obligation final?
The core legal principle has been approved, but the final judgment is still pending. The Constitutional Court first asked some very specific, technical questions of the European Court of Justice, including the risk of platforms having to pay twice in different European countries.

Conclusion

The battle between large international tech and media companies and the protection of local cultural distinctiveness has finally erupted in court. With this ruling, the Constitutional Court demonstrates that the obligation to invest locally is legally robust in Belgium, provided the legislature monitors proportionality. The final effect now depends on Europe.