MLB class action alleges Fanatics apparel deal violates antitrust laws

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Fanatics MLB Licensed Products Class Action Lawsuit Overview: 

• Who: Casey’s Distributing Inc. filed a class action lawsuit against Major League Baseball, its 32 franchise teams and Fanatics Inc. 
• Why: Casey’s Distributing claims MLB and Fanatics worked together to restrict competition for MLB licensed products sold in third-party online marketplaces. 
• Where: The class action lawsuit was filed in New York federal court. 

Major League Baseball and Fanatics Inc. have agreements with licensees and retailers which restrict competition for MLB licensed products sold in third-party online marketplaces, a new antitrust class action lawsuit alleges. 

Plaintiff Casey’s Distributing, which primarily sells licensed hardgoods, claims MLB and Fanatics — which is partially owned by the MLB — violate antitrust laws by removing competition for MLB licensed products from third-party online marketplaces such as Amazon.com. 

Casey’s Distributing further argues MLB “restricts the online advertising terms small retailers can use” in order to “almost guarantee” their websites will appear below theirs and ones affiliated with Fanatics. 

“Fanatics’s appetite for growth cannot be overstated,” the MLB class action states. 

Casey’s Distributing wants to represent a nationwide class of all persons or entities who were prohibited from selling MLB licensed merchandise through a third-party online marketplace or directly to Amazon due to policies set by MLB since Jan. 1, 2016. 

Casey’s Distributing claims Fanatics has tripled its value in the past few years and has used the influx of cash to “buy up competing licensees of MLB products,” while “slowly securing its dominance in the licensed sporting goods market.” 

MLB ‘aids and abets’ Fanatics’ alleged anticompetitive acts

MLB, meanwhile, “aids and abets” Fanatics on account of it investing “more than $50 million” to become a minority equity shareholder with the company, according to the MLB class action. 

“As Fanatics’s value grows, so does the value of the MLB’s equity share in Fanatics. Thus, it is in the MLB’s interest to assist Fanatics in its campaign to control as much of the online retail space as possible,” the MLB class action states. 

Casey’s Distributing claims MLB and Fanatics are in violation of the Sherman Act. It is requesting declaratory and injunctive relief along with equitable relief as necessary for itself and all class members. 

A similar class action lawsuit was filed against the National Football League and Fanatics in March by a group of buyers claiming the two work together to dominate the online market for NFL licensed apparel. 

Have you purchased an MLB licensed product from a third-party marketplace? Let us know in the comments! 

The plaintiff is represented by Justin S. Nematzadeh of Nematzadeh PLLC; Solomon B. Cera and Thomas C. Bright of Cera LLP; and William E. Hoese, Craig W. Hillwig and Zahra R. Dean of Kohn Swift & Graf PC. 

The Fanatics MLB licensed products antitrust class action lawsuit is Casey’s Distributing Inc. v. The Office of the Commissioner of Baseball, et al., Case No. 1:22-cv-04832, in the U.S. District Court for the Southern District of New York.

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