The Ohio Supreme Court heard oral arguments Wednesday in a case that could change how streaming platforms operate. The city of Maple Heights, outside Cleveland, sued Netflix and Hulu in federal court in 2020. It argues that the streaming platforms should pay local governments franchise fees similar to what cable television providers have to pay. The federal court sent two questions to the Ohio Supreme Court to decide: Are Netflix and Hulu considered “video service providers?” Does Maple Heights have the right to challenge the companies over the issue? No state’s supreme court has ruled on those issues.
Ohio’s highest court ruled 5-2 against satellite companies that complained a sales tax is unfair because it doesn’t also apply to cable TV. The court affirmed a lower court’s decision that the tax does not amount to unconstitutional discrimination because it’s based on the different nature of the companies’ business activities.
