Nike hit with €12.5m fine from EU
US sportswear maker Nike has been hit with a €12.5m fine for blocking cross-border sales of soccer merchandise of some of Europe’s best-known clubs, the latest EU sanction against such restrictions.
The European Commission said Nike’s illegal practices occurred between 2004 to 2017 and related to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation.
The EU case focused on Nike’s role as a licensor for making and distributing licensed merchandise featuring a soccer 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. uropean Competition Commissioner Margrethe Vestager said Nike’s actions deprived soccer fans in other countries of the opportunity to buy their clubs’ merchandise such as mugs, bags, bed sheets, stationery and toys.
“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 said.
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% after it co-operated with the EU enforcer.
Meanwhile, the US Supreme Court has declined to consider reviving a copyright case in which Nike was accused of unauthorised use of photographer Jacobus Rentmeester’s famous 1984 photograph of basketball superstar Michael Jordan soaring through the air. The court turned away an appeal by Mr Rentmeester, a former Life Magazine photographer, of a lower court’s ruling throwing out his copyright infringement lawsuit against the sportswear company. Mr Rentmeester had said the decision against him by the San Francisco-based 9th US Circuit Court of Appeals could stifle creativity and reward piracy.
Mr Rentmeester accused Nike of commissioning a version of his photo for its commercial benefit, infringing his copyright. Nike’s version shows Mr Jordan in a similar pose against the backdrop of Chicago’s skyline after he joined the NBA’s Chicago Bulls. Nike used the photo on posters and billboards promoting its lucrative Air Jordan brand. Nike shares were up marginally yesterday, having fallen by 4% last Friday after the sportswear maker’s North America sales fell short of estimates for the first time in a year.
