On March 25, 2019, the European Commission has fined Nike €12.5 million for banning traders from selling licensed merchandise to other countries within the EEA. The restriction concerned merchandising products of some of Europe’s best-known football clubs and federations, for which Nike held the licence.
In June 2017 the Commission opened an antitrust investigation into certain licensing and distribution practices of Nike to assess whether it illegally restricted traders from selling licensed merchandise cross-border and online within the EU Single Market.
The Commission investigation has found that Nike’s non-exclusive licensing and distribution agreements breached EU competition rules:
- Nike imposed direct measures restricting out-of-territory sales by licensees (e.g., 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).
- Nike enforced indirect measures to implement the out-of-territory restrictions, 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 EEA, and carrying out audits to ensure compliance with the restrictions.
- Nike imposed direct and indirect measures on master licensees to compel master licensees to stay within their territories and to enforce restrictions vis-à-vis their sub-licensees.
- Nike included clauses that explicitly prohibited licensees from supplying merchandising products to customers, often retailers, who could be selling outside the allocated territories.
The Commission has concluded that Nike’s illegal practices, which were in force for approximately 13 years (from 1 July 2004 until 27 October 2017), partitioned the Single Market and prevented licensees in Europe from selling products cross-border, to the ultimate detriment of European consumers and imposed a fine of €12 555 000.