European Commission fines Nike €2.15 million for restricting cross-border sales of popular football merchandise
News    ·   28-03-2019
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AUTHOR: Ron Galea Cavallazzi; Lisa Abela; Katya Gatt

The European Commission (‘Commission’) has earlier this week communicated its decision to fine the sportswear giant Nike for antitrust practices, namely the banning of its licensees from selling merchandise of some of Europe’s best-known football clubs to other countries within the European Economic Area, resulting in less choice and higher prices for consumers. As stated by Commissioner Margrethe Vestager the decision “makes sure that retailers and consumers can take full advantage of one of the main benefits of the Single Market: the ability to shop around Europe for a larger variety of products and for the best deals”.

The fine relates to Nike’s licensed merchandise featuring the brands of football clubs or federations, not products featuring its own trademarks. The decision came following an investigation opened in June 2017 which found that Nike’s non-exclusive licensing and distribution agreements breached EU competition law since they imposed (i) direct measures restricting out-of-territory sales by licensees as well as indirect measures to implement these restrictions; (ii) direct and indirect measures on master licensees to stay within their territories and enforce restrictions on their sub-licensees; and (iii) obligations on licensees to pass on these prohibitions in their own contracts, amongst other measures.

These practices were found to have affected to varying degrees products bearing the brands of clubs like Manchester United, FC Barcelona, Juventus, Inter Milan and AS Roma, apart from national federations like the French Football Federation.

In setting the fine, the Commission took into account the value of sales relating to the infringement as well as the gravity of the infringement and its duration. However, a 40% reduction in the fine envisaged was granted in return for Nike’s extensive cooperation in the investigation, which went so far as to provide the Commission with information allowing it to extend the scope of its case. The final fine imposed amounted to €12,555,000.

European Commission press release may be accessed on <http://europa.eu/rapid/press-release_IP-19-1828_en.htm>

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