Switzerland’s referendum on «Lex Netflix» and its implications of the regulatory framework for OTT(Over-the-top) service providers

Abstract

Switzerland guarantees a system that allows its people to express and validate their opinion on relevant laws through the submission of a referendum when deemed necessary. In 2021, both chambers (the National Council and the Council of States) imposed an obligation for streaming platforms to invest in local Swiss cinema. With this new law, not only video streaming service providers based in Switzerland but also those abroad would have to re-invest 4% of their gross revenues generated in Switzerland in Swiss independent film creation. In addition, the law introduced a quota system requiring at least 30% of the offered catalogue to be made up of European cinema productions. In May 2022, a referendum against this draft bill was initiated by the referendum committee due to consumer opposition As a result, more than half of the amendment voted in favour of the amendment, and the revised film law will come into force in 2024. In the recommendation, the referendum committee expresses its opinion against the law and stipulates whether it originally was the logic of regulatory approval by the regulators and against regulations imposed by consumers. As a result, consumers’ benefits and welfare, which remained up to now unclear, can be verified through actual cases, and the regulatory differences for the same service provider in Switzerland and in Korea can be highlighted. We examine the implications of such platform regulations by looking at Switzerland, which regulates the obligation to reinvest in the local film industry to protect cultural diversity and content comptetitiveness, and Korea, which requires the obligation to stabilize services for network quality.