Sanrio fined for restricting cross-border sales of licensed Hello Kitty merchandise

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European Commission decision finds Sanrio implemented practices restricting its licensees’ ability to sell licensed Hello Kitty and related merchandise across borders within the EEA. The infringement covers both offline and online sales, including direct bans on out-of-territory active, passive and online sales, referral obligations, and language requirements, plus indirect compliance measures like audits and non-renewal of contracts. The conduct is treated as a restriction by object under EU and EEA competition law and is not exempted.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages3

Reading Time8 min

AccessFree to download

Background

Licensing structure and agreements

Decision

Types of restrictions (active, passive, online)

Indirect measures (audits, non-renewal)

Legal assessment and effects

Comment

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29 Nov

2019

Sanrio ¦ned for restricting cross-border sales of licensed Hello Kitty merchandise

European Union-Herald

Sanrio licenses its proprietary characters, including Hello Kitty, to other undertakings that produce and distribute merchandise products

The Commission found that Sanrio had implemented a set of practices that restricted its licensees’ ability to sell licensed merchandise cross-border

Such conduct constituted a restriction of competition by object under Article 101(1) of the TFEU and Article 53(1) of the EEA Agreement

On 9 July 2019 the European Commission adopted a decision (Case AT.40432-character merchandise) under Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area (EEA Agreement) .

The decision was addressed to Sanrio Company Ltd, as well as to its European subsidiaries Sanrio GmbH and Mister Men Limited (hereinafter ‘Sanrio’), for infringing Article 101 of the TFEU and Article 53 of the EEA Agreement. These articles cover anti-competitive agreements between undertakings.

Background

Sanrio may not be well known, but it includes Hello Kitty among its proprietary characters. It designs, licenses, produces and sells products focusing on the Japanese ‘kawaii’ artistic and cultural style. Sanrio is also the licensor for the Mister Men characters.

It was found that, between 1 January 2008 and 21 December 2018, Sanrio participated in a single and continuous infringement that involved the implementation and enforcement within the EEA of a series of practices restricting active, passive and online cross-border sales of licensed merchandise.

The decision concerned Sanrio’s activities as a licensor for its own proprietary characters. Sanrio licenses its characters to other undertakings for products of a varied nature, for example stationery, school supplies, gifts and accessories sold primarily, but not exclusively, for children.

[https://www.worldtrademarkreview.com/portfolio-management/sanrio-fined-restricting-cross-border-sales-licensed-hello-kitty](https://www.worldtrademarkreview.com/portfolio-management/sanrio-fined-restricting-cross-border-sales-licensed-hello-kitty) 1/3

The licences are made either directly or through an agent and typically include provisions governing the distribution of the products on which the licensed IP right will be applied. Other elements consistently present in Sanrio’s merchandising agreements include:

territorial scope: Sanrio generally granted all licences in the EEA for one or more speciﬁc countries on a non-exclusive basis; and

ﬁnancial compensation to be paid by the licensee.

These licensing agreements, and more broadly, the relationships that were built on the basis of those agreements, were the focus of the decision.

In September 2016 the Commission conducted unannounced inspections at Sanrio GmbH’s oﬃce in Milan, Italy and then initiated proceedings in accordance with Article 2(1) of Regulation 773/2004 against Sanrio Company Ltd and all legal entities directly or indirectly controlled by it, including Sanrio GmbH. The purpose of the proceedings was to investigate whether Sanrio had in place agreementsand/or applied practices preventing or restricting the sale of licensed merchandise in the EEA.

On 29 May 2019 the Commission adopted a further decision to initiate proceedings in accordance with Article 2(1) of that regulation against Mister Men Limited. Subsequently, Sanrio submitted a formal offer to cooperate and, on 29 May 2019, the Commission adopted a statement of objections addressed to Sanrio.

The procedure carried on and the Commission adopted this decision on 9 July 2019.

Decision

The infringement was found to be as follows:

A series of practices restricting active and passive cross-border sales of licensed merchandise were put in place throughout Sanrio ’s merchandising business. These p

FAQs

What did the European Commission find Sanrio did regarding cross-border sales?

Sanrio used a set of practices that restricted licensees’ ability to sell licensed merchandise across borders within the EEA, for both offline and online channels.

What kinds of direct restrictions were included in the decision?

The decision covers prohibitions on out-of-territory passive sales, out-of-territory active sales, and out-of-territory online sales, along with obligations to refer out-of-territory orders to Sanrio and language requirements.

Why was Sanrio’s conduct considered a restriction of competition by object?

The Commission found that the practices, by their very nature, restricted competition by object under Article 101(1) TFEU and Article 53(1) EEA, and did not satisfy the exemption conditions in Article 101(3) TFEU and Article 53(3) EEA.

Aug 21, 2026

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