Wednesday, July 24, 2024

Nike fined $14 million by E.U. regulators over antitrust violation

Must read

Nike has become the latest target in the Europe Union’s crackdown on antitrust violators.

The bloc’s competition commission slapped Nike with a $14 million fine, saying the sports apparel giant prevented many of its licensees from selling soccer team merchandise across European borders, leaving shoppers with fewer choices and higher prices.

Nike is just the latest U.S. company to get sideways with the E.U. over its business practices. Five days ago, the bloc’s top competition cop, Margrethe Vestager, levied a $1.7 billion fine against Google for using “illegal practices” to cement its edge in advertising and search functions. Her agency also has launched inquiries against other high-profile tech companies.

“Today’s decision makes sure that retailers and consumers can take full advantage of one of the main benefits of the Single Market: the ability to shop around Europe for a larger variety of products and for the best deals,” Vestager said Monday in a statement.

Nike did not immediately respond to a request for comment.


Stories to keep you informed

The licensed merchandise included mugs, bags, toys and bedding with branding for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation. The E.U. panel said Nike engaged in what is known as geo-blocking from 2004 to 2017. Vestager has been looking into Nike’s licensing and distribution behavior, along with those of Universal Studios (which holds the licensing rights to “Minions” and “Despicable Me”) and Sanrio (Hello Kitty) since 2017.

The fine came after a turbulent year for the company. Last March, several Nike executives were forced out amid complaints about a “boys’ club” culture. Female employees had circulated an informal survey that also raised concerns about gender and pay disparities within the company.

In September, Nike debuted a campaign featuring Colin Kaepernick, the former N.F.L. quarterback who took to kneeling during the national anthem to protest social injustice and police brutality. Nike initially took some heat for the ad, and there were calls for a boycott. But the campaign turned out to be a boon: Nike reported a 10 percent jump in income in its second quarter, when the Kaepernick ad was released. Since the release of the ad, Nike’s stock has risen nearly 3 percent.

The competition commission said that Nike cooperated with its investigation “beyond its legal obligation to do so” and that its fine was cut 40 percent as a result.

Nike’s fine was relatively small compared with the penalties Vestager has handed Google for its anti-competitive practices — more than $9 billion in three years. In 2018, she hit Google with a record $5 billion antitrust fine for bundling its apps on Android devices. At the time, Vestager ordered Google to stop promoting its own search and browsing functions on smartphones and tablets running Google’s Android system. And in 2017, the commission fined Google for giving its own shopping-comparison service higher placement in search results over its rivals.

Vestager is also in the midst of a preliminary investigation into Amazon, telling the Post earlier this month that the probe is in a “quite advanced” stage. The commission is scrutinizing whether Amazon uses the data it collects from other merchants on its site to undercut competitors and boost its own sales.

(Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)

Amazon has so far been immune to antitrust penalties in the United States, though calls to split it and other major technology companies have become a hot-topic among some 2020 presidential candidates.

Latest article