Final Report of the Hearing Officer (1)

Case AT.40432 — Character merchandise

(Text with EEA relevance)

(2019/C 386/07)

(1) The draft decision addressed to Sanrio Company, Ltd., Sanrio GmbH and Mister Men Limited (referred to collectively as the ‘addressees’) finds that the undertaking comprising the addressees (‘Sanrio’) infringed Article 101 TFEU and Article 53 of the EEA Agreement through the implementation and enforcement within the EEA of a series of agreements and/or concerted practices aimed at restricting cross-border sales of licensed merchandise, both offline and online.

(2) By decision of 14 June 2017, the Commission initiated proceedings within the meaning of Article 2(1) of Regulation (EC) No 773/2004 (2) against Sanrio Company, Ltd. and all legal entities directly or indirectly controlled by it, including Sanrio GmbH. 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.

(3) On […], the addressees submitted a formal offer to cooperate (the ‘Settlement Submission’). The Settlement Submission contained: — an acknowledgement, in clear and unequivocal terms, by the addressees of their joint and several liability for the infringement described in the Settlement Submission, including facts, legal caveats, the addressees’ roles in the infringement and the duration of their participation in the infringement, — an indication of the maximum fine that the addressees would accept in the context of a cooperation procedure, — confirmation that the addressees had been sufficiently informed of the objections the Commission envisaged raising against them and that they had been given sufficient opportunity to make their views known to the Commission, — confirmation that the addressees had been granted sufficient opportunity to access the evidence supporting the potential objections and all other documents in the Commission’s file, and that they did not envisage requesting further access to the file or to be heard again in an oral hearing, unless the Commission did not reflect the Settlement Submission in the statement of objections (the ‘SO’) and the decision, and — the addressees’ agreement to receive the SO and the final decision pursuant to Articles 7 and 23 of Regulation (EC) No 1/2003 (3) in English.

(4) On 29 May 2019, the Commission adopted the SO, to which all three addressees replied by confirming that the SO reflected the content of the Settlement Submission, reiterating their commitment to follow the cooperation procedure under the conditions of the Settlement Submission and declaring that they did not wish to be heard again by the Commission.

(5) The infringements found and the fines imposed in the draft decision correspond to those acknowledged and accepted in the Settlement Submission. The amount of the fines is reduced by 40 % on the ground that Sanrio has effectively and timely cooperated with the Commission by: (i) providing guidance on practices compliant with Union competition law to Sanrio’s European-based employees and changing its template agreement, removing the clauses restricting competition, before formal proceedings were opened; (ii) sending clarification letters to all licensees whose licensing contracts had not yet been modified to reflect the revised template; and (iii) providing additional evidence lengthening the duration of the infringement and acknowledging the existence of a single and continuous infringement for the whole period.

(6) In accordance with Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with objections in respect of which Sanrio has been afforded the opportunity of making known its views. I conclude that it does.

(7) Overall, I consider that the effective exercise of procedural rights has been respected in this case.

Brussels, 8 July 2019. Wouter WILS

(1) Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

(2) Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18), last amended by Commission Regulation (EU) 2015/1348 of 3 August 2015 (OJ L 208, 5.8.2015, p. 3).

(3) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1).