NFL, Fanatics Merch Seller Conspired to Choke Out Competition on Amazon, Raising Prices for Consumers, Class Action Lawsuits Allege

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NFL, Fanatics Antitrust Amazon Class Action Lawsuits Overview:

• Who: An NFL merchandise consumer and an NFL merchandise retailer are both suing the NFL, all 32 of its teams, and merchandise company Fanatics.
• Why: In almost-twin lawsuits, the consumer and the retailer say the NFL and Fanatics conspired to monopolize the NFL merchandise market on Amazon, stifling competition and resulting in higher prices for consumers buying merch.
• Where: The class action lawsuit were both filed in a California federal court.

The NFL and merchandise retail giant Fanatics conspired together to “choke” the competition in the merchandise market on Amazon, hurting other retailers and raising prices of NFL gear for fans, class action lawsuits allege.

Two near-identical class action lawsuits were filed against the NFL, all 32 NFL teams and Fanatics, Inc. Dec. 22 in a California federal court, both alleging violation of federal antitrust laws.

In one lawsuit, the plaintiff is Nebraska retailer Casey’s Distributing, representing other small and medium merchandise retailers. The other was filed by Ohio consumer Natalie Wheeler Hastings, on behalf of NFL fans who buy merchandise.

According to Casey’s lawsuit, Amazon’s Third Party Online Marketplace is the most important platform for small businesses like itself to participate in the online retail market for sales of NFL licensed products. 

NFL, Fanatics ‘Choked Out’ Smaller Competition on Amazon, Class Action Lawsuits Claim

However, this year, the NFL teams and Fanatics entered into various agreements that “choke that competition” off of Amazon’s marketplace and channel it to Fanatics, a “gargantuan” sporting goods licensee and retailer.

Fanatics not only holds a license to manufacture and sell NFL licensed products, but it is also partially owned by the NFL. The lawsuits allege the NFL has thus given Fanatics an unfair advantage in order to increase its own bottom line.

“The NFL aids and abets Fanatics because it invested $95 million in Fanatics to become a minority equity shareholder,” the lawsuit states. 

“As Fanatics’ value grows, so does the value of the NFL’s equity share in Fanatics. Thus, it is in the NFL’s interest to assist Fanatics in its campaign to usurp as much of the online retail space as possible. And Amazon’s enormous online retail platform was a logical candidate to target for growth.”

The lawsuits allege that the NFL adopted an online distribution policy in 2015 requiring licensed distributors to obtain league approval to supply non-licensed retailers selling on Amazon’s third-party marketplace. But it did not begin enforcing the policy until its 2017 investment in Fanatics, leaving many retailers holding dead stock because they could no longer sell the merchandise they had purchased without the league’s approval, the lawsuits state.

That allegedly helped eliminate Fanatics’ competition, and aided it to sell more products at inflated prices to consumers. The lawsuits state that Fanatics’ value has tripled in the past year alone, now estimated to be $18 billion. The consumer lawsuit said the price of a Seahawks shirt has inflated by $10 since 2017. 

The Casey’s lawsuit is suing under the Sherman Act antitrust laws, alleging conspiracy in restraint of trade and monopolization. The Hastings suit also alleges violations of the Sherman Act and other antitrust laws. Both are seeking an injunction, fees, costs and jury trials. 

Hastings is seeking damages on behalf of millions of consumers who overpaid for NFL products. 

The suit seeks an order declaring the defendants violated antitrust laws, an injunction blocking the conduct, and legal fees.

Meanwhile, the NFL is fighting to have a class action lawsuit dismissed that alleges it privately shares the personal video-watching information of Android users of its NFL App to Google for marketing purposes.

Do you buy merchandise on Amazon? What do you think of the claims in these lawsuits? Let us know in the comments! 

Casey’s Distributing is represented by Solomon B. Cera and Thomas C. Bright of Cera LLP, Robert N. Kaplan and Gregory K. Arenson of Kaplan Fox & Kilsheimer LLP, and Justin Solomon Nematzadeh of Nematzadeh PLLC.

Hastings is represented by Warren T. Burns, Christopher J. Cormier, Spencer Cox and Patrick Murphree of Burns Charest LLP, and Andrew M. Purdy.

The NFL Fanatics Class Action Lawsuits are Casey’s Distributing Inc. v. National Football League Inc. et al., Case No. 3:21-cv- 09905, and Hastings v. National Football League Inc. et al., Case No. 3:21-cv-09908, both in the U.S. District Court for the Northern District of California.

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