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Today, the Commission has decided to fine NBCUniversal, together with other companies in the Comcast group, 14.3 million euros for anti-competitive licensing and distribution practices which are illegal under EU antitrust rules.
NBCUniversal is a US company that operates television networks and film and TV production companies around the world.
It also owns the intellectual property rights to the characters in its movies, and the themes, images and logos from those movies. And it licenses hundreds of companies in Europe to make and sell products which use that intellectual property - things like Jurassic Park toys, Minions school bags and Shrek mugs. In return, those licensees pay NBCUniversal part of their sales revenue, as a royalty.
You can find these products in millions of European homes. If you have children, there's a pretty good chance that you have some of them at home.
NBCUniversal's illegal behaviour affected a wide range of those products - from toys and sweets, to clothes, mugs and household products. Its contracts with licensees divided up the European single market. That took away choice from consumers, and may have led to higher prices.
The Commission's investigation
Our investigation found that NBCUniversal used these contracts to set out which countries the licensees could sell in, and which ones they were banned from. In some contracts, NBCUniversal also limited their freedom to sell their products online. It even gave some licensees a list of the customers which they were allowed to sell to.
These restrictions meant that shops couldn't choose freely which products to order, from different European distributors. A department store in Spain couldn't sell “E.T.” pyjamas from a Belgian manufacturer - because that manufacturer was banned from selling into Spain. The extra-terrestrial may have made it all the way to Earth - but he was stopped in Spain because of a contractual restriction. Meanwhile, a teenager in Sweden couldn't shop online for a “Big Lebowski” T-shirt. So, as a result of these restrictions, consumers lost out on choice, and possibly also on lower prices.
In short, consumers, retailers and licensees were all deprived of the benefits of the single market.
Today's decision makes it clear that brand owners cannot prohibit their non-exclusive licensees from selling in some Member States or to certain customers, or from selling online.
This illegal behaviour lasted more than six years. It started at the beginning of 2013, when NBCUniversal increased its licensing activities in Europe, ahead of the launch of the sequel to the very successful movie “Despicable Me”. It lasted until September 2019 when, in the course of our investigation, NBCUniversal told all its European licensees that these anti-competitive sales restrictions no longer applied.
This is why we have imposed a fine of € 14 327 000.
NBCUniversal cooperated with the Commission in our investigation. It acknowledged the infringement and provided additional evidence relatively early in the process. As a result, the company was granted a 30% reduction of the fine.
This sort of cooperation is now a well-established process in antitrust cases. In the last two years, we've adopted 10 decisions involving companies that have cooperated with us. And that's good news - because it means we can enforce the antitrust rules faster and more efficiently.
The importance of today's decision
So why does today's decision matter? There are two reasons. The first of those reasons is all about merchandising - the second is much broader.
This industry is a big business that's growing quickly in Europe and around the world, and it's expected to keep growing in the coming years. The merchandise sector in Europe was estimated to be worth more than 50 billion euros last year, from a global total of 230 billion euros.
Today's decision is the third antitrust decision, which the Commission has taken in the merchandise sector in less than a year. In March last year, we fined Nike for similar behaviour involving products that carried football club brands, like FC Barcelona and Juventus. And in July, we fined Sanrio for a similar infringement, to do with merchandising featuring Hello Kitty and other characters.
These three decisions send a clear message. The Commission will not tolerate restrictions, which undermine the EU single market.
And that brings me to the second reason why this decision is important. Because the single market makes a vital contribution to our prosperity. It provides a better deal for consumers, and more opportunities for business. And today's decision is part of our drive to make sure the single market works well.
That single market gives businesses the potential to reach almost half a billion consumers. And digitisation has made it even easier for consumers to buy - and for businesses to sell - across borders in the European Union.
That ought to create opportunities for European businesses - including digital businesses - to grow. But in practice, there are still obstacles to selling across borders. Even today, only one in five European consumers buys online from retailers in other Member States. So completing the Digital Single Market is an important part of making Europe fit for the digital age.
The obstacles to a full single market come in many forms - including the contracts that stop retailers from selling cross-border in the European Union. The sector inquiry into e-commerce markets, which we carried out in the Commission's last term, found that these territorial restrictions were becoming increasingly common - both in contracts for the sale of consumer goods online, and those for licensing digital products. That's why it has been a priority for us to tackle anti-competitive restrictions to online and offline cross-border sales.
For example, we fined Guess for limiting the ability of distributors of its clothes and accessories to sell cross-border and online. And we fined manufacturers of consumer electronics for limiting cross-border sales, or pressuring their online retailers to keep prices high.
With today's decision, the total fine we've imposed on companies for creating barriers to cross-border trade in the single market comes to 184 million euros. And this is since we completed the sector inquiry in May 2017. This is complemented by other parts of the Commission's work. Take for example the geo-blocking regulation, which aims at removing unjustified geographic restrictions in online shopping.
So today's decision is not just about Minions and dinosaurs and trolls. It's about consumers and businesses throughout Europe. It shows that the Commission is committed to making every effort, so that the single market - and Europe's economy - works better for us all.