Sat. Apr 20th, 2019

Brussels fined Nike 12.5 million for restricting the sale of its products between EU countries | Economy

Brussels fined Nike 12.5 million for restricting the sale of its products between EU countries | Economy



The European Comission has imposed a fine of 12.5 million euros on Monday Nike by banning merchants from selling products licensed in other European Union countries, a restriction that affects products from some of Europe's best-known football clubs and federations such as FC Barcelona, Manchester United, Inter de Milan or ACE. Rome.

"There are many fans who want products like scarves or shirts with the brand of their favorite football team, Nike has banned many of its licensed merchants from selling these products in another country, which restricts supply and increases prices. according to the EU Competition rules ", has summarized the curator Margrethe Vestager.

The community executive started the investigation in June of 2017 to determine if the sports firm illegally restricted the cross-border and online sale of its licensed products. Brussels has concluded that Nike's non-exclusive licensing and distribution agreements have infringed Community rules.

First, it imposed a series of direct measures restricting sales outside the territory of licensed merchants, for example, through contractual clauses that prohibited them, the obligation to send sales orders from outside that territory. to Nike or with double taxation clauses to the said cross-border operations.

To these measures it added others of an indirect nature, which consisted in threatening to end the license agreement for sales outside the territory, denying the supply of official product labels if it suspected that its sales could be directed to other EU countries and audits for ensure that the conditions were met.

In addition, in some cases, the multinational used its principal licensed vendors from each territory to grant sub-licenses to other merchants. To guarantee its practices, Nike forced its main partners to impose the same restrictions on its subordinate vendors.

Finally, the US company prohibited its partners from supplying merchandising to customers who may be selling products outside the assigned territories. In the same way, he intervened to make sure that clothing stores and supermarkets do not acquire products from merchants from different countries.

The European Commission has determined that Nike's illegal practices that lasted more than 13 years - from July 1, 2004 to October 27, 2017 -, segmented the single market and prevented the cross-border sale of products to the detriment, ultimately , of European consumers.

Brussels has granted, however, a reduction of 40% of the fine for the cooperation of Nike "beyond its legal obligation to do so". The sports firm provided the community services with information that made it possible to broaden the scope of the investigation, provided evidence with "an important added value" and expressly acknowledged the facts and the infractions.

In addition to the investigation that has concluded with the imposition of the fine announced this Monday, the community executive is investigating since January of this year the granting of illegal tax advantages to Nike in the Netherlands.

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