Antitrust Law Daily Distribution practices of Nike, other licensors under investigation by EC
Wednesday, June 14, 2017

Distribution practices of Nike, other licensors under investigation by EC

By Jeffrey May, J.D.

The European Commission (EC) is taking a close look into whether Nike, Inc., Sanrio Co., Ltd., and Universal Studios are restricting cross border and online sales of merchandising products in the European Union (EU). Today, the EC announced that it had opened formal investigations into the three companies’ licensing and distribution practices.

The EC is trying to determine whether the companies, in their role as licensors of rights for merchandising products, are illegally restricting traders from selling licensed merchandise cross-border and online in violation of EU competition rules. Nike, Sanrio, and Universal Studios license the rights for some of the world's most well-known brands, the EC noted. Nike is the licensor of rights for Futbol Club Barcelona's merchandise, Sanrio is the licensor of rights for Hello Kitty, and Universal Studios is the licensor of rights for the "Minions" and "Despicable Me" movie franchises.

E-commerce sector inquiry, other investigations. In announcing the investigation, the EC noted that these three investigations complement the e-commerce sector inquiry. In May 2015, the EC launched an antitrust competition inquiry into the e-commerce sector in the EU in the context of its Digital Single Market strategy. In its recent final report on the e-commerce sector inquiry, the EC found that more than one in ten retailers experienced cross-border sales restrictions in their distribution agreements. Such restrictions limited their ability to sell online to consumers in other Member States.

The announcement of these latest investigations comes a little more than a week after a formal investigation into the distribution practices of clothing company Guess, Inc. was disclosed. On June 6, the EC announced that opened a formal investigation into that company’s distribution agreements and practices to determine whether Guess illegally restricts retailers from selling cross-border to consumers within the EU Single Market.

Companies: Guess Inc.; Nike, Inc.; Sanrio Co., Ltd.; Universal Studios

MainStory: TopStory Antitrust FranchisingDistribution

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