Industry Has Right to be Heard in Determining Tariffs

  • December 17, 2015

Netflix, Inc. v. Society of Composers, Authors and Music 2015 FCA 289 (Nadon, J.A., Boivin J.A., De Montigny J.A.)

December 17, 2015

David W. Kent and Jonathan O’Hara for the Applicant
D. Lynne Watt and Matthew Estabrooks for the Responents

In the underlying application, Netflix sought judicial review of a decision of the Copyright Board certifying the tariff of royalties for audiovisual webcasts (Tariff 22.D.1). Netflix challenged a provision of the Tariff that established a monthly minimal fee for free subscription trials.

Although the judicial review raised a number of issues, the Federal Court of Appeal addressed only the issue of whether the Board's process for certifying the Tariff was procedurally fair. Netflix only objected to a provision of the Tariff that did not appear in the version of the Tariff that was publicly available during the objection period. Although Netflix did not participate in the initial opposition process regarding the Tariff, the Court found that the industry affected by the provision (of which Netflix is a member) had a right to be heard and to put its case forward. Because Netflix was denied the opportunity to fully make its case, introduce fresh evidence and submit new arguments on subject matters not included in the proposed Tariff, the Federal Court of Appeal found there was a breach of Netflix's right to be heard. The application was allowed with costs and the Board's decision regarding free trials was returned to a differently constituted board for redetermination.

By Greg Beach, Belmore Neidrauer LLP