Content Localization Obligations in Cross-Border OTT Mergers & Acquisitions: A Case for Mandatory Disclosure

ABSTRACT The process of globalization of OTT or over the top streaming services has revealed an important gap between M&A (mergers & acquisitions) law and how they treat ‘content localization obligations.’ When a company buys an OTT platform that serves customers in different countries, there are legal obligations to invest in, develop, and promote real world domestic content for those many jurisdictions. These legal obligations related to content localization are imposed by regulators in places like EU, Canada and Australia and they relate to requirements around Revenue and Markets Access; however, they are an unusual type of liability because they exist in perpetuality, continually evolve over time, and are very difficult to satisfy using conventional indemnities, warranties and Representation & Warranties (R&W) insurance coverage.
While they are quite likely to impact the financial performance of an OTT platform and create ongoing operational challenges, due diligence is not treated as contingent regulatory liabilities and does not require any mandatory disclosure in an M&A transaction. This paper asserts that the regulators systematically undervalue due diligence in cross-border OTT acquisition, and do not offer sufficient regulatory disclosure under existing corporate and securities law regimes. This research paper will utilize the Environmental Response, Compensation and Liability Act( CERCLA) as a basis for examining how various content localization regulatory schemes surrounding the EU Audiovisual Media Services Directives, Canada’s Online Stream Act(Bill C-11), Australia’s Streaming Platforms Investment Obligation Act (2025), and proposes that content localization obligations be formally classified as contingent regulatory liabilities in M&A due diligence, triggering mandatory disclosure obligations on par with environmental remediation duties.