The European Commission has imposed a fine of €6.2m on Japanese company Sanrio, owner of the Hello Kitty brand, for restricting merchandise sales between Member States.
The Commission opened its Hello Kitty antitrust investigation in June 2017, examining Sanrio’s licensing policy to determine whether the company had engaged in illegitimate practices in restricting online and cross-border sales of licensed merchandise within the EU Single Market. Legislation covering EU online shopping and cross-border trade prevents licence holders from applying different practices or pricing schemes between Member States.
The Hello Kitty antitrust investigation found that non-exclusive licensing agreements held by Sanrio were in breach of EU-wide antitrust law in the following ways:
- A number of the company’s licensing agreements included clauses restricting the sale of Sanrio-branded products out of a defined territory, with restrictions on the languages permitted for use orders for sales from out of territory to be referred back to Sanrio; and
- In order to guarantee compliance with the geographical restrictions defined in the licensing agreements, Sanrio imposed measures including conducting audits on noncompliant licence holders and refusing to renew contracts with licensees which did not observe the restrictions.
The Commission stated that Sanrio’s co-operation with the Hello Kitty antitrust investigation went ‘beyond its legal obligation’, so the fine imposed on the company was reduced by 40%.
Margrethe Vestager, the EU’s Commissioner in charge of competition policy, said: “Today’s decision confirms that traders who sell licensed products cannot be prevented from selling products in a different country. This leads to less choice and potentially higher prices for consumers and is against EU antitrust rules. Consumers, whether they are buying a Hello Kitty mug or a Chococat toy, can now take full advantage of one of the main benefits of the Single Market: the ability to shop around Europe for the best deals.”
