Sanrio, creator of the cute Hello Kitty (who may not even be a kitty?) we’ve all come to love, has found itself in the spotlight after the European Union (EU) Commission revealed that the company may have breached a law. Called the EU competition law, it essentially prevents companies from establishing competition-suppressing monopolies, keeping anti-competitive behavior in check.
Sanrio is not alone, however, and the EU Commission reported on June 14 that investigations have begun on three companies in Japan, including sports goods giant Nike.
According to early reports, Sanrio’s license agreement granted regional retailers the rights to market Hello Kitty goods within the country, but deliberately obstructed all forms of its international trade, including digital marketing via the internet.
While details of the licensing agreement in question remains undisclosed, the EU Commission stated that it effectively denied consumers from accessing broader choices in the EU single market. Heavy fines of up to 30 percent of relevant sales may be imposed on Sanrio should it be found guilty of infringing the competition law.
Despite the law being established decades ago to promote healthy competition for the sake of consumers, it has not fully caught up to the modern digital market. The internet is a gray area when it comes to a country’s borders, making the enforcement of such an all-encompassing law all the more daunting.
The EU Commission, in its ongoing efforts to maintain the competition law’s relevance in the digital age, is keeping a close eye on potential obstructions in internet marketing. Unfortunately, Sanrio fell under its unforgiving gaze.
Sanrio and its subsidiaries are currently cooperating with the investigation, vowing to let their legion of fans know of any updates.
Source: NHK News Web via Hachima Kiko
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