Nike fined €12.5m for restrictions on football merchandise sales

Nike's illegal practices affected the licensed merchandise products of clubs like FC Barcelona, Manchester United and Juventus

The European Commission has announced on Monday it had fined Nike €12.5m for banning traders from selling licensed merchandise to other countries within the EEA. In particularly, the restriction concerned merchandising products, like mugs, bags, bedsheets, stationery, toys, of some of Europe's best-known football clubs and federations, for which Nike held the licence.

Most affected were FC Barcelona, Manchester United, Juventus, Inter Milan and AS Roma, as well as national federations like the French Football Federation.

"Football fans often cherish branded products from their favourite teams, such as jerseys or scarves. Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers. This is illegal under EU antitrust rules," Commissioner Margrethe Vestager, in charge of competition policy, commented on the occassion.

According to Commission's findings Nike imposed a number of direct measures restricting out-of-territory sales by licensees, such as clauses explicitly prohibiting these sales, obligations to refer orders for out-of-territory sales to Nike and clauses imposing double royalties for out-of-territory sales. In addition to obliging licensees to pass on these prohibitions in their contracts, Nike would intervene to ensure that retailers (e.g. fashion shops, supermarkets, etc.) stopped purchasing products from licensees in other EEA territories. The company also enforced other indirect measures to implement the out-of-territory restrictions, for instance by threatening licensees with ending their contract if they sold out-of-territory, refusing to supply “official product” holograms if it feared that sales could be going towards other territories in the European Economic Area (EEA), and carrying out audits to ensure compliance with the restrictions. All illegal practices were in force for approximately 13 years (from 1 July 2004 until 27 October 2017), the Commission also found.

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