“You don’t have the control”: the Complementary Law 157/2016 and Netflix in Brazil

Abstract

The aims of this study are to discuss the constitutionality of Complementary Law 157/2016 and examine its possible impacts to Netflix in Brazil. The central argument points out that the Law is unconstitutional, because, since streaming is a mechanism of data distribution through packets, the distributed information is not stored by the user receiving the media to be reproduced. In this sense, it does not constitute a service as an obligation to do of a physical or intellectual nature. According to the Brazilian Constitution, municipalities do not have the right to institute ISS on services that characterize obligations to do. The approval of Complementary Law 157/2016 may be harmful to Netflix, since the company brought the possibility of new services based on digital media and impacted the distribution – expanding global access and minimizing transaction costs – and the consumption of cultural and creative goods in the audio-visual sector. With the possibility that streaming services may become more expensive and less accessible – since ISS charging may end up increasing the prices of the service the company offers to its customers - the Brazilian consumer may limit its search for goods and services from these new forms of data distribution.