10 July 2019TrademarksSarah Morgan

European Commission fines Hello Kitty owner €6.2m

Europe’s antitrust authority has hit Sanrio, the licensor of the Hello Kitty brand, with a €6.2 million ($6.9 million) fine for restricting cross-border sales of merchandise.

The European Commission, which announced the fine yesterday, July 9, said that Sanrio’s illegal practices partitioned the European Single Market and prevented licensees in Europe from selling products cross-border.

Its practices, which included direct measures restricting out-of-territory sales by licensees, such as clauses explicitly prohibiting these sales, were in force for approximately 11 years.

Sanrio also implemented measures as an indirect way to encourage compliance with the out-of-territory restrictions, including audits and the non-renewal of contracts if licensees didn’t respect the out-of-territory restrictions.

Margrethe Vestager, the 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.”

Sanrio’s fine was reduced by 40% as the Hello Kitty owner had cooperated with the Commission “beyond its legal obligation to do so”.

The investigation began in June 2017, when the European watchdog began competition investigations into the licensing and distribution practices of Nike, Universal Studios and Sanrio.

Earlier this year, in March, the European Commission fined Nike €12.5 million, after finding that the sports company had banned traders from selling licensed merchandise to countries within the European Economic Area.

The investigation against Universal Studios is on-going.

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More on this story

15 June 2017   The European Commission has begun competition investigations into the licensing and distribution practices of Nike, Universal Studios and Sanrio, the licensor of the Hello Kitty brand.
8 February 2019   The owner of popular children’s character Hello Kitty, Sanrio, has taken legal action against a California-based company which it alleges is producing counterfeit products that infringe its trademarks and copyright.