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Nike Fined €12.5 Million for Restricting Intra-EEA Sales

In a warning shot to businesses using intellectual property rights to restrict cross-border sales within the European Economic Area (EEA), on 25 March 2019 the European Commission fined Nike €12.5 million for banning traders of licenced football merchandise from selling to other EEA countries. The decision underscores the Commission’s commitment to eliminating commercial practices that threaten the integrity of the internal market to the detriment of consumers.

The Commission investigation found that, as licence holder for merchandise of various well-known European football clubs and federations, Nike operated a network of licensing and distribution agreements which prevented sales between countries within the EEA.

The restrictions included contractual provisions that explicitly restricted out-of-territory sales, as well as indirect measures that penalised such sales.

By restricting cross-border sales, Nike was able to partition the Single Market and maintain different prices for the same products, or sell selections of products at higher prices in different countries. The tough stance on restrictions in distribution networks that seek to allocate customers and markets is a unique feature in the EEA, where the free movement of goods is guaranteed under the Single Market imperative.

The €12.5 million fine includes a 40 percent reduction to reflect a high level of cooperation by Nike in the investigation. According to the Commission’s press release, Nike cooperated beyond its legal obligation to do so, provided evidence with significant added value, and expressly acknowledged the facts and infringements of EU competition rules. The European Commission is conducting at least two other ongoing investigations into similar licensing practices.

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About this Author

Gillian Sproul, Greenberg Traurig Law Firm, London, Litigation Attorney
Shareholder

Gillian Sproul focuses her practice on advising clients on the impact of EU and UK competition law on their transactions, operations and business strategy. She represents clients in cartel and abuse of dominance cases, energy regulatory investigations and market inquiries before the EU and UK regulators and courts and has obtained EU, UK and other national clearances for numerous complex M&A and joint venture transactions. Her experience extends also to advising clients on competitor co-operation and information exchange, distribution and licensing and compliance....

440203-349-8861
Addiped Cheng, Greenberg Traurig Law Firm, London, Antitrust Litigation Attorney
Associate

Addiped Cheng is an attorney Greenberg Traurig's Competition and Regulatory Group. She advises clients on all aspects of EU, UK and Hong Kong competition law, including behavioural competition advice, contentious matters and UK/EU merger control.

In addition to competition law, Addiped also advises on anti-bribery and corruption issues, and has assisted clients in conducting internal investigations into fraud, bribery and corruption. Addiped’s experience spans a range of industries including gaming, racing, airlines, construction and construction materials, real estate development, telecoms, shipping, oil and financial services.

Concentrations

  • Competition law
  • Merger control
  • Litigation and dispute resolution

Credentials

Education

  • Post-Graduate Certificate in Law, The University of Hong Kong, 2012
  • Bachelor of Laws, The University of Hong Kong, 2011

Admissions

  • Hong Kong  Qualified in Hong Kong.
440203- 349- 8700