Netflix refused to heed a demand from Canada’s federal broadcast regulator to hand over confidential customer data by Monday evening despite threats its exemption from regulation would be revoked if the video streaming service did not comply.
“While Netflix has responded to a number of the CRTC’s requests, we are not in a position to produce the confidential and competitively sensitive information ordered by the commission due to ongoing confidentiality concerns,” said Netflix spokesperson Anne Marie Squeo in a statement Monday night.
“While the orders by the CRTC are not applicable to us under Canadian broadcasting law, we are always prepared to work constructively with the Commission.”
When Netflix’s global public policy director Corie Wright testified at the Let’s Talk TV hearings last week, Canadian Radio-television and Telecommunications Commission chair Jean-Pierre Blais ordered the company to provide the regulator with the number of subscribers and other closely held data by Monday at 5 p.m.
Wright repeatedly requested confidentiality guarantees during the hearing, saying she was concerned whether the information would be kept confidential even if a third party requested the data under a public interest argument.
The commission made no guarantee, but said it regularly guards business data that could affect a company’s competitiveness.
As a web-based service, Netflix operates under an exemption from rules and levies applied to conventional broadcasters. Blais told Wright the exemption order requires the company to provide such information; failure to provide that information, he said, would put Netflix’s exemption at risk.
The CRTC declined to provide comment on Monday.
The hostile discussions between the federal broadcast regulator and the video streaming giant have turned into a high-stakes game of chicken.
The CRTC drew a line in the sand by threatening to revoke Netflix’s exemption so Netflix decided to push back, says University of Ottawa law professor Michael Geist, an authority on digital privacy issues who also writes a column for the Star.
The commission maintains it has the power to regulate Internet-based services but chooses not to, Geist wrote in a blog post about the hearing last week. Their threats, he wrote, confirms the CRTC believes it regulates Netflix, but the company could argue it’s not a broadcaster so it shouldn’t have to conform to Canada’s Broadcasting Act.
“In fact, it could challenge the CRTC’s orders for information, arguing it does not fall within the Canadian legislation and does not maintain a physical presence in the country,” Geist wrote.
By ignoring the deadline, Netflix is calling the commission’s bluff, Geist told the Star Monday.
“In many respects (Netflix) must feel that the CRTC backed them into a corner when Blais threatened to withdraw the media exemption and essentially said, ‘We’re going to step up and regulate you.’ Clearly their response, in turn, is, ‘You don’t have the current legislative power to regulate us.’ ”
Prime Minister Harper has made it clear he would not support a so-called Netflix tax, also undermining the CRTC’s authority, Geist said.
“The CRTC, I think, is in a bit of a bind because it’s got a company that it has said it regulates saying, ‘You don’t have the power to regulate us,’ and it’s got a government saying, ‘We’re not interested in adding new regulations.’ ”
- With files from Michael Lewis