Fanatics Anticompetitive Actions with NFL Merchandise Antitrust Class Action

This antitrust class action brings suit against the National Football League, Inc., its affiliates, its teams, and Fanatics, Inc., alleging that they conspired to dominate online retail sales of NFL-licensed goods, such as t-shirts, hats, glasses, and other licensed merchandise. The complaint claims that, because of the conspiracy, consumers who bought the merchandise had to pay more than they otherwise would have.

The class for this action is all persons or entities in the US, including its territories and the District of Columbia, who bought NFL-licensed products online from Fanatics, an NFL defendant, or an NFL team, or any current or former subsidiary or affiliate of them, at any time between January 1, 2016 and the time when the effects of the anticompetitive conduct end.

The complaint alleges that the anticompetitive conspiracy had at least four elements:

• First, the complaint claims, the defendants “colluded to boycott competing retailers who sold NFL[-]Licensed Products through third-party online marketplaces (‘TPOMs’)” like Amazon. This removed the downward pressure they might have generated on merchandise prices.
• Second, the complaint alleges, after reducing the number of outlets for the merchandise in the above way, they “enter[ed] into exclusive dealing arrangements that denied their competitors access to manufacturers and suppliers.”
• Third, the complaint says, after having established a dominant position for online retail merchandise, they did not then compete with one another but “entered into anticompetitive licensing agreements to further reduce competition.”
• Fourth, the complaint alleges, they further undermined the ability of those not in the conspiracy to compete with them “by forbidding those retailers from using NFL-related keywords to advertise or even describe their product offerings.” This meant that consumer searches were more likely to lead to the conspirators’ sites than to others.

The complaint quotes Fanatics executive chairman Michael Rubin as saying, “If your strategy is just to win on price, you’re eventually going to die.”

The complaint alleges that Fanatics, an online retailer of licensed products, “is the key driver and enforcer of the conspiracy, using high-pressure strong-arm tactics to encourage licensees to help eliminate Fanatics’ competitors from TPOMs. Fanatics created reports that it sent to licensees showing the names of sellers and products offered for sale on TPOMs and threatened the licensees with consequences if the reports did not show ‘progress’ in lowering the number of competing retailers and product offerings.”

The complaint details efforts to push TPOMs out of the NFL merchandise market or out of business altogether, including prohibiting them from selling on the merchandise on Amazon. Eventually, Fanatics took over the sales of NFL merchandise on Amazon. The complaint alleges, “Fanatics now operates both the NFL’s online store and the NFL Shop ‘storefront on the Amazon Marketplace to the exclusion of other retailers that formerly competed with Fanatics.

The complaint alleges, “With far fewer competitors, Defendants no longer face meaningful price competition in the online retail market and prices have increased accordingly.”

Article Type: Lawsuit
Topic: Antitrust
Tags: Anticompetitive Actions, Antitrust, Requiring Consumer to Pay Higher Prices