March 8, 2021

Brussels fines Sanrio with 6.2 million for restricting Hello Kitty 'merchandising'



The European Commission has fined Sanrio with 6.2 million for restricting the sale of merchandising to third countries within the European economic area. Which affects Hello Kitty and other Sanrio characters.

The products licensed for the merchandising they are extremely diverse (cups, bags, sheets, stationery, toys), but all carry one or more logos or images protected by intellectual property rights, such as trademarks or copyrights.

Through a license agreement, one party allows another party to use one or more of its intellectual property rights in a certain product. Licensors generally grant them non-exclusively to increase the quantity of marketing products in the market and their geographical coverage.

Sanrio is a Japanese company that designs, produces and sells products with Hello Kitty, a cat known by its name of Kitty White, and other popular characters such as My Melody, Little Twin Stars, Keroppi or Chococat. Through its subsidiary Mister Men Limited, Sanrio also owns the intellectual property rights to the animated series Mr Me Mr Men and Little Miss.

In June 2017, the European Commission opened an antitrust investigation to Sanrio to assess whether it illegally restricted merchants from selling merchandising with a cross-border license and on-line within the single market of the EU. The Commission's investigation has found that the Sanrio agreements violated EU competition rules:

Sanrio imposed a series of direct measures that restrict sales outside the territory by licensees, such as the clauses that explicitly prohibit these sales, the obligations to refer orders to Sanrio for sales outside the territory and the limitations to the languages ​​used in the merchandising products.

Sanrio also applied a series of measures to encourage compliance with the restrictions: conducting audits and not renewing contracts if the licensees did not respect the restrictions.

The European Commission has come to the conclusion that the illegal practices of Sanrio, which were in force for approximately 11 years (from January 1, 2008 to December 21, 2018), divided the single market and prevented the licensees – owners of licenses- in Europe to sell cross-border products, to the detriment of consumers.

The fine imposed by the European Commission on Sanrio amounts to 6,222,000 euros. The fines imposed are entered into the general budget of the EU. This money is not intended for private expenditure, but the contributions of the Member States to the EU budget for the following year are reduced by the money received from the fines.

Competition Commissioner Margrethe Vestager said: "The decision confirms that merchants selling licensed products can not be prevented from selling products in a different country, which means that there are fewer options and potentially higher prices for consumers. against EU antitrust rules. "

The European authorities have applied to Sanrio a reduction of 40% in the amount of the penalty in response to the collaboration "beyond its legal obligation" provided by the Japanese company, particularly with regard to the provision of information to determine the period of the infraction.

(tagsToTranslate) Brussels (t) Sanrio (t) merchandising (t) Hello (t) Kitty



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