U.S. Olympic Committee Called a Monopolist

     EUGENE, Ore. (CN) – An “energy gum” maker filed an antitrust complaint against the U.S. Olympic Committee on Wednesday, accusing it of fixing prices and restricting competition for sponsoring athletes at this summer’s track and field Olympic trials in July.
     Gold Medal LLC dba Run Gum sued the committee (USOC) and USA Track & Field (USATF) in Federal Court under the Sherman Act.
     “The defendants’ attempts to shut out Run Gum and other sponsors from the upcoming Olympic Trials are unfair – and ultimately harm athletes, who rely on sponsorships to fund their training activities and make a living,” plaintiff’s attorney Sathya Gosselin said in a statement.
     The U.S. track and field Olympic trials will be held at Hayward Field in Eugene from July 1 to 10. The Olympic Games, which are not subject to the complaint, will be in Rio de Janeiro from Aug. 5 to 21.
     Run Gum claims the defendants’ monopoly power to determine which businesses can sponsor individual athletes at the trials, and display their logos on the athletes’ clothing, violates the Sherman Act.
     “This complete foreclosure of a valuable commercial opportunity, which is vigorously enforced, is a classic group boycott that injures would-be sponsors (and athletes), lacks any legitimate business justification or pro-competitive effects, and is illegal per se. USATF, the USOC, and their co-conspirators cannot curtail competition by picking and choosing eligible market participants and excluding the rest,” the complaint states.
     Run Gum, developed by running coach Sam Lapray and two-time Olympian and biochemist Nick Symmonds, is sugar- and calorie-free. The company advertises it with claims that it can boost energy and mental focus through a proprietary blend of caffeine, B vitamins and taurine, an amino acid.
     Because the Olympic trials come only once every four years, “the public interest is overwhelming. In-person attendance typically exceeds 20,000, a sell-out crowd, with millions more watching the nationwide broadcast on NBC (and digital streaming devices) and following on social media,” the complaint states.
     U.S. Track & Field has several of its own sponsors, including Nike, which is prominently featured in conjunction with the trials and also sponsors individual athletes, the complaint states.
     Nike is not a party to the complaint.
     Run Gum claims that U.S. Track & Field unfairly limits individual sponsorships to favor Nike and other pre-approved companies.
     Though the Olympic Committee technically prohibits “commercial identification or promotional material” on athletes’ clothing and bibs, it allows them to feature the names and logos of companies that make athletic clothing or track and field equipment on certain parts of athletic wear. The committee acknowledges that this amounts to advertising, according to the complaint.
     “By jointly agreeing and conspiring to restrict and limit the ‘advertising’ that appears on athletes’ bodies at the Olympic Trials to only pre-approved manufacturers of athletic apparel and equipment, defendants USATF and the USOC starve athletes of myriad sponsorship opportunities – and exclude scores of sponsors from the marketplace. USATF and USOC do not act alone either; their unnamed co-conspirators – the apparel and equipment manufacturers that benefit from this practice and ensure its continuity – have likewise jointly agreed and conspired to (1) deny athletes the full spectrum of Olympic Trial sponsors and (2) reduce competition among competitors through this self-serving exclusion,” the complaint states.
     U.S. Track & Field threatens to disqualify athletes whose uniforms feature companies other than Nike and other pre-approved apparel manufacturers, effectively barring those companies from the trials, according to the complaint.
     Run Gum claims this illegal, anti-competitive group boycott deprives athletes of income and prevents new companies from receiving consumer attention and generating brand loyalty.
     “Athlete sponsorship is central to Run Gum’s business model. As an athlete-owned business … Run Gum prizes any opportunity to promote its product through top track & field athletes, including by paying athletes for Run Gum identification on their competition apparel,” the complaint states.
     “Left unchecked, the restraint will prevent Run Gum from sponsoring individual athletes at the Olympic Trials … [which] makes it a less attractive sponsor overall to athletes who understandably prefer to partner with sponsors that are not excluded from this event.”
     Though Rule 50 of the Olympic charter prevents any form of advertising on athletes’ uniforms at the Olympic Games, it does not apply to qualifying events, “as evidenced by the Olympic trials regulations in other sports and in other countries – and even in the USOC’s own statements,” the complaint states.
     A spokesperson for U.S. Track & Field said the organization has not yet been served, and does not comment on pending litigation.
     The U.S. Olympic Committee did not immediately return emailed requests for comment Thursday.
     Run Gum seeks declaratory judgment that that the defendants’ sponsorship limits violate the Sherman Act and an injunction preventing them from enforcing the rules.
     It also seeks treble damages, pre-judgment and post-judgment interest, and court costs and attorneys’ fees.
     Sathya Gosselin is a partner with the Hausfeld law firm’s Portland office.

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