Sales restrictions on licensed goods not allowed in EU

Sales restrictions on licensed goods not allowed in EU
Vice-president Margrethe Vestager, in charge of competition policy, Credit: EC-Audiovisual Service

In an anti-trust case, the European Commission fined last week several companies belonging to Comcast Corporation, including NBCUniversal LLC, an American company.

The companies were fined  €14 327 000 for restricting traders from selling licensed merchandise within the European Economic Area (EEA) to territories and customers beyond those allocated to them.

The restrictions concerned merchandise products featuring the Minions, Jurassic World and other images and characters from NBCUniversal's films.

"This is the third decision dealing with sales restrictions on licensed products sold across Europe,” said Executive Vice-President Margrethe Vestager, in charge of competition policy, at a press briefing on Thursday (30 January).

“NBCUniversal's strategy to prevent traders from selling licensed products across customer groups and countries is against EU antitrust rules. Such sales restrictions undermine the very foundations of the EU Single Market and cannot be tolerated."

In June 2017, the Commission opened an anti-trust investigation into certain licensing and distribution practices of NBCUniversal. It found that NBCUniversal illegally restricted traders from selling licensed merchandise freely within the EU Single Market, such as restricting out-of-territory sales by license holders and prohibiting online sales.

NBCUniversal's licensing practices 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's Single Market.

The illegal practices were in force for more than 6.5 years (from January 2013 until September 2019). Asked by The Brussels Times why it took so long time to solve a relatively simple anti-trust case, Westager replied that although the case was straightforward it had to come the Commission’s attention before it could start investigating it.

“Unfortunately, the holders of the licenses were very reluctant to come forward and complain because of their relationship with NBCUniversal,” she said. “Once they did, the investigation went very fast and that also because the company cooperated with the Commission so the infringement process could end. This sends a strong message to all concerned.”

In return for its cooperation, NBCUniversal was granted a 30% fine reduction.

Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages.

The Commission has also set up a tool to make it easier for individuals to alert it about anti-competitive behaviour while maintaining their anonymity. The tool protects whistleblowers' anonymity through a specifically-designed encrypted messaging system that allows two-way communications.

The Brussels Times

Copyright © 2023 The Brussels Times. All Rights Reserved.