The Framework

Colombia’s local content policies for online video platforms focus on ensuring the visibility of national audiovisual content while stopping short of imposing strict quotas. Article 154 of the National Development Plan (NDP) mandates that online video-on-demand (VOD) providers create a clearly identified section for Colombian content that is easily accessible to users in Colombia.[1] Decree 681 of 2021 built on this requirement by compelling VOD providers to identify users in Colombia and include relevant content in the local section. Although there are no mandatory content quotas, these prominence requirements aim to ensure that users are pushed toward Colombian content. While the Colombian government has considered a broader regulatory framework for online video services, the current approach emphasizes prominence over specific quotas.

Implications for U.S. Technology Companies

These prominence requirements pose several challenges for U.S. tech companies. The most significant concern is the compliance burden of identifying and prominently displaying local content. While not as restrictive as a quota, this still requires platforms to divert resources for developing technical solutions to identify Colombian users and curate the local content section. Additionally, although Colombia has not implemented local content quotas, the government has considered more comprehensive regulations. The lack of clarity on future regulatory measures creates uncertainty, potentially discouraging U.S. companies from investing in the Colombian market. The 19 percent value-added tax (VAT) on foreign-supplied digital services also adds to the financial burden for U.S. companies. Additionally, these policies can act as a disincentive for non-Colombian companies because they do not extend to services based in Colombia.

How China Benefits

While not directly designed to favor China, these policies indirectly benefit Chinese tech companies. If U.S. companies find the Colombian market less attractive due to compliance burdens and uncertainty, it could open the door for Chinese companies to gain a competitive advantage. Moreover, if Colombia were to introduce additional restrictive measures, it may influence other countries to do the same, thus fragmenting the global market and making it easier for Chinese companies to grow. As with the Mexican situation, it should be noted that while there are no local content quotas in place beyond the prominence requirement, Colombia has considered further regulation of online content platforms, so this issue is not entirely resolved.

Endnotes