Nike Fined N5.6 Billion for Blocking Cross-Border Sales of Football Merchandise
American multinational sportswear maker, Nike on Monday has been hit with a 12.5 million euros fine for blocking cross-border sales of football merchandise of some of Europe’s best-known clubs.
The fine, which is about 10.7 million pounds or N5.6 billion, is the latest European Union (EU) sanction against such restrictions. The European Commission, which oversees EU’s activities, said Nike’s illegal practices occurred between 2004 and 2017.
It said the practices were related to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation (FFF).
The European Union case focussed on Nike’s role as a licensor for making and distributing licensed merchandise featuring a football club’s brands and not its own trademarks.
The sanction came after a two-year investigation triggered by a sector inquiry into e-commerce in the 28-country bloc. The EU wants to boost online trade and economic growth.
European Competition Commissioner, Margrethe Vestager said Nike’s actions deprived football fans in other countries of the opportunity to buy their clubs’ merchandise such as mugs, bags, bed sheets, stationery and toys.
She said in a statement “Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers.”
Nike’s practices included clauses in contracts prohibiting out-of-territory sales by licensees and threats to end agreements if licensees ignored the clauses. Its fine was cut by 40 per cent after it cooperated with the EU enforcer.