The encyclopedia · Legal & Compliance · Legal decision · 2019
Sanrio blocked Hello Kitty licensees from selling across EU borders — €6.2M fine
Sanrio stopped its EU licensees selling Hello Kitty merchandise outside their own territories. The Commission fined it €6.2M in 2019.
Sanrio · European Commission · 2019-06
What happened
Sanrio, the Japanese company behind Hello Kitty and other character brands, licensed its intellectual property to manufacturers and retailers across the European Economic Area. To control distribution and pricing, Sanrio's licensing agreements prevented or limited licensees from selling licensed merchandise outside their allocated territories.
When a licensee received an order from outside its territory, Sanrio required the order to be referred back to Sanrio or channelled through the designated licensee for that territory, rather than allowing the sale to proceed directly. This effectively partitioned the EU single market along national borders, preventing consumers from shopping across borders for better prices on Hello Kitty products.
On 21 June 2019, the European Commission fined Sanrio €6,222,000 for breaching EU antitrust rules. The case was part of a broader EC crackdown on geo-blocking in e-commerce, alongside fines against Guess (€39.8M, December 2018) and Universal Studios (€14.3M, 2019) for similar cross-border sales restrictions.
Why it happened
- Sanrio treated the EU single market as a collection of national territories, imposing cross-border sales restrictions that EU law explicitly prohibits.
- The licensing agreements were designed to control pricing and distribution, but they crossed the line from legitimate IP protection into illegal market partitioning.
- The referral requirement for out-of-territory orders was particularly egregious — it prevented even willing buyers and sellers from transacting across borders.
- The fine was part of a coordinated EC enforcement wave against geo-blocking, signaling that character-licensing businesses were not exempt from single-market rules.
The lesson
An IP licence is not a licence to partition the single market. Territorial limits meant to hold prices up read to the Commission as geo-blocking: licensees must be free to sell across borders.
Aftermath
Sanrio accepted the fine and reformed its licensing agreements. The case became part of the EC's e-commerce enforcement package, cited alongside Guess and Universal Studios as examples of how licensing and distribution agreements must respect EU single-market rules.
Sources
- European Commission Press Release IP/19/3950 — 'Commission fines Sanrio €6.2M for restricting cross-border sales of Hello Kitty merchandise', 21 June 2019 (antitrust fine; territorial restrictions on licensees; out-of-territory orders referred back to Sanrio)
- The Seattle Times / AP: EU fines Hello Kitty owner $7 million in antitrust ruling
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