On May 27, 2026, Chancellor Friedrich Merz's cabinet approved a draft Media Services Investment Obligation Act that would compel streaming services and broadcasters to plow at least 8% of their German net turnover into German and European film and television. Two days later, US Trade Representative Jamieson Greer called the measure discriminatory and a breach of the 2025 Turnberry trade framework, saying it treats American companies "like a piggy bank for pet, protectionist projects." Berlin's government spokesman countered on May 29-30 that the law is a cultural-policy tool, not a digital trade barrier.
Both sides are partly right, and both are missing the more important point. The trade-law question is real but narrow. The policy question — whether mandatory investment quotas are a sensible way to fund domestic culture — is the one that should worry anyone who cares about a competitive, open audiovisual market.
The strongest case for the quota
Germany is not improvising. Its bill implements Article 13(2) of the revised EU Audiovisual Media Services Directive, which expressly lets member states require on-demand providers to invest a share of their territorial revenue in European works. France, Italy, and Spain already run comparable regimes; France's obligation reaches roughly 20% of local revenue for the largest streamers. Seen this way, Germany is a latecomer harmonizing with EU neighbors, not a rogue protectionist.
The underlying worry is also legitimate. Global streamers earn substantial sums from German subscribers while commissioning a relatively thin slate of genuinely local, culturally specific work — the kind of mid-budget, German-language drama that rarely travels but anchors a national film ecosystem. Markets undersupply public-good cultural output, the argument runs, so a modest, predictable obligation that recycles platform revenue into local production corrects a real gap. Germany pairs the rule with roughly €250 million a year in public production incentives, signaling it sees this as industrial policy, not a shakedown. Domestic producers, in fact, complain the 8% floor is too low.
That is the case to beat. It is not a strawman, and proportionate cultural support is a defensible aim.
Where the design goes wrong
The problem is not that Germany wants more local content. It is that a turnover-based quota is a clumsy instrument that distorts the market it claims to serve.
First, an investment mandate is a quota on spending, not on quality or audience. It tells a platform how much to spend and, via sub-quotas, on whom — the German draft directs at least 60% to new works, 70% to independent producers, and 80% to productions with a German cultural connection. That guarantees money flows; it guarantees nothing about whether anyone watches. Spending floors reliably inflate production costs and reward output that satisfies the regulator's checklist rather than viewers — the predictable result when you subsidize inputs instead of outcomes.
Second, the levy lands unevenly. Because the obligation scales with German turnover and bites hardest on large foreign on-demand services, it functions as a sector-specific cost on the firms that have invested most in serving German audiences, while sparing smaller players (the draft exempts providers under €10 million in turnover). Greer's "piggy bank" framing is rhetorical, but the structural complaint is sound: the cost falls disproportionately on US streamers, which is precisely why it raises a trade-discrimination flag.
Third, the trade-law exposure is not imaginary. The Turnberry framework, reached at Turnberry, Scotland in July 2025 and implemented through EU legislation in 2026, locked in a 15% baseline tariff arrangement and a web of regulatory commitments meant to stabilize transatlantic trade. A new, platform-targeted financial obligation introduced months later is exactly the kind of measure that invites retaliation and reopens a settlement both sides spent a year negotiating. Even if Berlin is legally correct that cultural policy sits outside the deal's tariff core, the political cost of testing that proposition is high — and it is European consumers and producers who would absorb any tit-for-tat.
A better path
None of this means governments must accept whatever the market produces. It means the instrument should match the goal. If the aim is more German-language and independent work, the cleaner tools are the ones Germany is already using on the side: direct, transparent public funding and competitive grants, paid from general revenue and accountable to a budget line. Tax-and-grant beats mandate-and-quota because it makes the subsidy visible, lets it be aimed at genuine market gaps, and does not conscript private capital allocation or single out foreign firms.
If a contribution from streamers is still wanted, a low, flat, non-discriminatory levy into a neutral fund open to all qualifying European productions — rather than a spending mandate with nationality-weighted sub-quotas — would be far easier to defend under both EU law and the Turnberry framework. It would also let producers compete for the money on merit instead of platforms spending to a quota.
The EU is reportedly weighing harmonization of these national regimes through its AVMSD review. That is the moment to ask the harder question Greer's trade complaint skips past: not merely whether Germany's quota is legal, but whether revenue-based content mandates are a good idea at all. The experience in France and Italy suggests they reliably move money — and far less reliably produce the vibrant, competitive, globally relevant audiovisual sector their backers promise.