Sanrio fined €6.2m for 11-year breach of EU competition rules

The licensor banned cross-border sales of Hello Kitty merch within the EEA and blocked contract renewals if licensees did not respect its rules

Written by Rhys Thomas

Posted 16.07.2019 | Entertainment

Sanrio fined €6.2m for 11-year breach of EU competition rules thumbnail

Sanrio has been struck with a €6.2 million fine by the European Commission for banning traders from selling Hello Kitty merchandise across borders within the EEA.

An antitrust investigation opened in June 2017 by the EC found that Sanrio flouted EU anti-trust rules for a period of 11 years. The probe concluded non-exclusive licensing agreements Sanrio imposed on its partners between January 2008 and December 2018 breached EU competition rules.

The Japanese licensor, which also owns a number of other high-profile IP such as Gudetama, was accused of aiming to restrict consumer choice and the ability for fans to shop around for the best deal, “one of the main benefits of the single market,” according to Margrethe Vestager, the commissioner in charge of competition policy.

Contracts imposed a number of “direct measures restricting out-of-territory sales by licensees”, the EC says. These include explicitly banning sales and implementing clauses directing companies to refer sales to other territories through Sanrio directly.

Companies found to be in breach of these contracts were hit with punitive measures including audits and the non-renewal of contracts.

"Today's decision confirms that traders who sell licensed products cannot be prevented from selling products in a different country,” Margrethe adds. “This leads to less choice and potentially higher prices for consumers and is against EU antitrust rules.”

The fine levied on Sanrio was reduced by 40 per cent for going above and beyond its legal obligation during the Commission’s investigation. The company was said to provide evidence with significant added value and acknowledged its competition infringements.

Sanrio has been contacted for comment. 

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