European Commission fines Nike for vertical restraints

The European Commission has fined Nike EUR12,555,000 for restricting distributors from selling its licensed products outside their allocated territories in the EEA in violation of Article 101 TFEU.

The Commission found that the infringing practices lasted for thirteen years between July 2004 and October 2017.  It found that Nike used non-exclusive licensing and distribution agreements which illegally banned out-of-territory sales by licensees.  It further found that these restrictions were reinforced with threats to terminate or refuse supply and the use of master licences which expressly prohibited licensees from supplying products to customers who could be selling outside their allocated territories. The Commission also found that Nike took steps to prevent licensees from selling to customers who would sell on the products outside their allocated territories.

The Commission found that the practices limited cross-border trade involving branded products for clubs such as FC Barcelona, Manchester United, Juventus, Inter Milan and AS Roma, as well as national associations such as the French Football Federation.

The Commission reduced the fine on Nike by 40% for its cooperation with the investigation.

The decision illustrates that the Commission’s sustained interest in vertical restrictions that partition the internal market shows no sign of abating.  The Commission is currently evaluating whether its existing rules on vertical restraints contained in the vertical block exemption regulation and guidance should continue, elapse or be changed.

Case 40436 - Nike. Commission press release IP/19/1828.