The Federal Trade Commission has teamed with the Department of Justice to tell the Supreme Court that it should reverse a lower court decision that the league's collective action in licensing merchandise is subject to antitrust scrutiny.
That came in a brief to the Supreme Court asking it to overturn a lower court decision in American Needle vs. the NFL. American Needle had challenged an exclusive licensing deal for NFL marks and logos between the league and Reebok The Seventh Circuit Court of Appeals had sided with the league, concluding that "the NFL teams can function only as one source of economic power when collectively producing NFL football.”
The FTC said that a more nuanced reading of antitrust law was needed, and that the court should vacate the decision and remand it back to the Seventh Circuit.
The FTC says that unreasonable restraint of trade should only be taken out of the equation for joint ventures such as the league only if "first, the teams and the league must have effectively and legitimately merged the relevant aspect of their operations, thereby eliminating actual and potential competition among the teams and between the teams and the league in that operational sphere; and second, the challenged restraint must not significantly affect actual or potential competition among the teams or between the teams and the league outside their merged operations."
