Trading cards and trading blows – A review of the Panini v. Fanatics antitrust lawsuit

Panini, an established player in the sports trading card industry, and Fanatics, a fast-growing newcomer, have moved their rivalry from the market to the U.S. federal court system.

In October, Panini America, Inc. (Panini)¹, the American subsidiary of Panini Group, a global trading-card company based in Italy, filed an amended complaint² in their lawsuit against Fanatics, Inc.³ and several affiliated entities (Fanatics). The complaint, which was filed in the Middle District of Florida and subsequently transferred to the Southern District of New York, alleges violations of the Sherman Act and the Clayton Act (the main US antitrust laws⁴), as well as tortious interference with prospective business and contract, business defamation, and disparagement. In brief, Panini alleges that Fanatics is engaging in anticompetitive conduct through:

• its acquisition of allegedly unprecedented long-term exclusive licensing deals with top professional leagues and players associations, such as the NBA, MLB, and NFL Players Association (NFLPA);
• its acquisition of competitor Topps and special manufacturer GC Packaging, LLC (GCP); and
• the “raiding” of key Panini employee groups.

Panini alleges that this conduct is anticompetitive, demonstrates Fanatics’ goal of eliminating all competition in player trading cards for major U.S. professional sports leagues for the foreseeable future, and that these arrangements would not benefit consumers.

Four days after Panini filed its initial complaint, a Fanatics affiliate filed its own suit⁵ against Panini S.p.A in the Southern District of New York, arguing that Panini’s antitrust lawsuit is baseless and that Fanatics is simply a stronger and more innovative market player. Further, Fanatics alleges its own claims against Panini of unfair competition, tortious interference with business relations, and breach of the obligation to negotiate in good faith.⁶ This article examine the key elements of the claim

• Exclusive long-term licensing deals
• Acquisition of Topps and GCP
• "Raiding" of Panini employees
• Other claims
• Competition or exclusionary conduct?