The UK Competition and Appeal Tribunal (“CAT”) recently rejected an application by Sports Direct, in which the discount retailer of athletic apparel sought to force the Newcastle United Football Club (“NUFC” or “the Club”) to supply the retailer with its new replica kit (Club-branded sports apparel) for the 2024/2025 soccer season. On April 12, 2024, the Tribunal ruled unanimously to reject Sports Direct’s application, and days later Sports Direct applied for permission to appeal the decision. On April 19, 2024, the Tribunal refused permission to appeal. The parties must now proceed to trial.
According to the judgment, Sports Direct had been supplying NUFC’s replica kit for years, at least since the 2020/2021 season. However, following a recent change in the NUFC’s ownership, the Club signed an exclusive contract with a new manufacturer to produce its replica kits, and entered into an exclusive arrangement with JD Sports, another sports retailer, for the right to sell the NUFC’s replica kit online and in the UK. In response to the Club’s refusal to provide the new replica kit, Sports Direct petitioned the Tribunal for interim relief mandating the Club to supply the new replica kit to Sports Direct. Sports Direct claimed that the Club’s new agreements regarding the exclusive manufacture, distribution and wholesale supply of the kits effectively foreclosed Sports Direct from the NUFC replica kit market. According to Sports Direct, the agreements represented an abuse of the NUFC’s dominant position in that market, in violation of Chapters I and II of the Competition Act 1998. Sports Direct also requested an expedited trial on its claims.
While the Tribunal chose to proceed on the basis that the Club had a dominant position in market for NUFC replica kits, it could not presume that the NUFC’s actions were abusive, and reasoned that even if it were a dominant undertaking, the NUFC was “entitled, without automatically triggering the Chapter II prohibition, to structure the business as it wishes in order to maximize its profits or further other interests,” especially considering the recent change in ownership. The Tribunal also indicated that certain issues in Sports Direct’s application, including questions regarding the definition of “replica kit” and the nature of the new manufacture, distribution and supply agreements concerning the NUFC replica kits, were matters to be determined at trial. While the Tribunal acknowledged that Sports Direct’s allegations involved serious issues to be tried, it determined that “no arguable case of abuse” had been made in Sports Direct’s application, and ultimately refused to grant the request for injunctive relief. However, considering the serious nature of Sports Direct’s allegations, the Tribunal indicated that its refusal to grant injunctive relief “makes a speedy trial more, and not less urgent.”
CAT Case Summary | CAT Judgment Summary | Ruling (Interim Relief) | Order (Permission to Appeal)