{"id":1281,"date":"2021-05-11T09:12:55","date_gmt":"2021-05-11T09:12:55","guid":{"rendered":"https:\/\/www.andrelang-law.de\/?p=1281"},"modified":"2023-10-05T14:27:47","modified_gmt":"2023-10-05T12:27:47","slug":"nikes-sales-ban-eur-12-5-million-fine-for-restricting-crossborder-sales-2","status":"publish","type":"post","link":"https:\/\/andrelang-law.de\/en\/nikes-sales-ban-eur-12-5-million-fine-for-restricting-crossborder-sales-2\/","title":{"rendered":"NIKE&#039;s sales ban \u2013 EUR 12.5 million fine for restricting cross-border sales"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"1281\" class=\"elementor elementor-1281\" data-elementor-settings=\"{&quot;ha_cmc_init_switcher&quot;:&quot;no&quot;}\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-710326fe elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"710326fe\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;_ha_eqh_enable&quot;:false}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-387613e2\" data-id=\"387613e2\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-77cd7c49 elementor-widget elementor-widget-text-editor\" data-id=\"77cd7c49\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\tYet another sales ban fine \u2013 The EU Commission today has imposed a fine of \u20ac12.5 million on Nike for restricting cross-border sales by banning its retailers from selling licensed football merchandise to other countries within the EEA. Please see the respective press release of the EU Commission here. Author: Dr. Christian Andrelang, LL.M. Attorney-at-Law Bar Certified Lawyer International Trade Law Bar Certified Lawyer Commercial and Corporate Law\n<h2>Sales ban \u2013 What is it about?<\/h2>\nNike prevented many of its licenses from selling branded football products in different countries of the EEA, the European Economic Area. This is a breach of EU antitrust rules. In June 2017, the EU Commission opened an antitrust investigation into certain licensing and distribution practices of Nike to assess whether Nike illegally imposed sales bans on its retailers from selling licensed products across borders and online within the EU. The EU Commission investigation established that Nike&#039;s non-exclusive licensing and distribution agreements infringed EU competition rules in various ways: \u2013 Nike chose direct measures to restrict out-of-territory sales by its licensees and retailers, in particular clauses which directly prohibiting these sales, Obligations to refer orders for out-of-territory sales to Nike, and clauses which impose double royalties for out-of-territory sales. \u2013 Nike also opted for indirect measures to enforce and implement the out-of-territory restrictions, in particular by threatening its retailers with contract termination in case of out-of-territory sales, with refusals to supply official products, and by carrying out audits to ensure compliance with the restrictions. \u2013 In some cases, Nike used master licenses in each territory to grant sub-licences for the use of the different rights to third parties. To secure this practice within its distribution network, Nike imposed direct and indirect measures on master licenses. Through these measures, Nike compelled master licenses to stay within their territories and to enforce restrictions vis-\u00e0-vis their sub-licensees. \u2013 Nike included clauses that explicitly prohibited licenses from supplying products to customers, in particular retailers, who would be selling outside their allocated territories. \u2013 Furthermore, NIKE obligated its retailers to pass on these prohibitions in their contracts to their retailers. Nike also intervened to ensure that retailers stopped purchasing products from licenses in other EEA territories.\n<h2>Sales ban \u2013 Why is it important?<\/h2>\nThe clauses on sales ban in Nike&#039;s manufacturing and distribution agreements infringed Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements between companies that prevent, restrict or distort competition within the EU&#039;s Single Market. The EU Commission concluded that Nike&#039;s illegal practices partitioned the Single Market and prevented licenses in Europe from selling products cross-border, to the ultimate detriment of European consumers. Nike&#039;s illegal practices affected to varying degrees the licensed merchandise products, in particular bearing the brands of various football clubs. The decision of the EU Commission to impose a fine safeguards that retailers and consumers can take full advantage of one of the main benefits of the Single Market: the ability to shop across borders around Europe for a larger variety of products and for the best deals. The ban of passive sales in the EEA is prohibited, and sales bans are prone to be qualified as anti-competitive behavior. Sales bans often pertain to bans of passive sales, in particular online sales. According to the EU Commission, passive sales mean responding to unsolicited requests from individual customers including delivery of goods or services to such customers. General advertising or promotion that reaches customers in other distributors&#039; (exclusive) territories or customer groups but which is a reasonable way to reach customers outside those territories or customer groups, for instance to reach customers in one&#039;s own territory, are considered passive selling.\n<h2>\nSales ban \u2013 What does it mean for you?<\/h2>\nIt doesn&#039;t matter if you are a high profile, exclusive licensor of a globally renowned brand, a medium sized company operating a selective distribution system or a start-up which struggles to establish its brands. Any sales ban which prohibits cross-border sales, in particular via the internet may qualify as a breach of antitrust laws. The recent activities of the EU commission as well as regional antitrust authorities indicate that sales bans won&#039;t fly under the radar of antitrust investigations any longer. The so-called Geoblocking Regulation also prohibits one-sided impediments of cross-border purchases by end-customers. You are invited to download or share this article.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-14c2def elementor-widget elementor-widget-button\" data-id=\"14c2def\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"http:\/\/More%20Information%20a\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Learn more about international<br>distribution and competition law <\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>Yet another sales ban fine &#8211; The EU Commission today has imposed a fine of \u20ac12.5 million on Nike for restricting cross-border sales by banning its retailers from selling licensed football merchandise to other countries within the EEA. Please see the respective press release of the EU Commission here. Author: Dr. Christian Andrelang, LL.M. Attorney-at-Law [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83,76],"tags":[],"class_list":["post-1281","post","type-post","status-publish","format-standard","hentry","category-antitrust","category-sales-ban"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>NIKE\u2019s sales ban | andrelang law<\/title>\n<meta name=\"description\" content=\"NIKE\u2019s sales ban \u2013 EUR 12.5 million fine for restricting crossborder sales. Insights from Dr. Christian Andrelang. 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