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  HOME | Business & Economy (Click here for more)

Nike Handed Fine over Soccer Merchandising Restrictions

BRUSSELS – The European Commission handed on Monday the United States-based sportswear giant Nike a 12.5-million-euro ($14.1 million) fine for restricting the sale of soccer merchandising.

Nike has imposed illegal restrictions on retailers for selling licensed merchandise belonging to major soccer clubs like Spain’s FC Barcelona, England’s Manchester United, and Italy’s Juventus across borders within the European Union single market, the Commission said.

“Soccer fans often cherish branded products from their favorite teams, such as jerseys or scarves,” Margrethe Vestager, the European Commissioner in charge of competition policy, was quoted as saying.

“Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers,” she added.

The Commission said that Nike carried out the illegal merchandising practices that breached the EU competition rules between July 2004 and October 2017.

The Commission then was forced to launch an anti-trust investigation in June 2017.

The statement also added that licensor, which is Nike in this case, “typically grant non-exclusive licenses to increase the number of merchandising products in the market and their territorial coverage.”

“Nike’s core business is the design and sale of athletic footwear and apparel, including for soccer clubs and federations, which generally feature Nike’s registered trademarks, such as its name or ‘Swoosh’ logo. Other products, so-called ‘licensed merchandise’, only feature the brands of a soccer club or a federation, not Nike’s trademarks,” the statement read.

“For these products, Nike acts as a licensor of IPRs (intellectual property rights) that grants licenses to third parties, who become entitled to manufacture and distribute those products. It is in the context of Nike’s role as a licensor for the manufacture and distribution of these licensed merchandise products that the Commission is imposing a fine,” EC stated.

The European Commission, who reviewed the contracts between Nike and its licensees, said that the US-based corporate used direct and indirect restrictions to prevent these licensees from selling those “out-of-territory” products, and often from providing retailers with them.

Meanwhile, the Commission praised Nike’s cooperation in regards to the investigation, as the sportswear corporate did provide the commission with the needed information.

“Therefore, the Commission granted Nike a 40% fine reduction in return for this cooperation,” the statement said.

 

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