Last month, the Untied States Olympic Committee (“USOC”) and USA Track & Field (“USATF”) were sued in the U.S. District Court for the District of Oregon by Run Gum, a company co-owned by Olympic runner Nick Simmonds, alleging that restrictions on the type of advertisements athletes can wear on their jersey violate antitrust laws.

Run Gum’s lawsuit alleges that the limitation of types of advertisements that can be displayed on uniforms violates the Sherman Antitrust Act. Currently, USOC preapproves apparel and equipment manufacturers that are allowed to advertise on uniforms at Olympic Trails. USATF itself has a contract with Nike that runs through 2040. An international guideline known as Rule 50 restricts advertisements during the summer games, but Run Gum says it doesn’t apply for the Olympic Trails.

Lack of Claim?

USOC and USATF both submitted motions asking that the complaint be dismissed because Run Gum fails to state a claim under antitrust laws. In paragraph 12 of the complaint, Run Gum states there are unnamed co-conspirators that “(1) deny athletes the full spectrum of Olympic Trial sponsors and (2) reduce competition among competitors through this self-serving exclusion.”

The Sherman Act does not prohibit every restraint on trade, only those that are unreasonable. For example, if two businesses agree to make a partnership, it restricts trade, but may not do so unreasonably.

USOC and USATF both state that the Olympic Trails, an event that happens once every four years, is not a properly defined market under the Sherman Act. “Run Gum’s desire to free ride on the Olympic name through ‘ambush’ advertising at a single event does not make an antitrust claim,” USATF’s motion states.

Implied Immunity?

USOC and USATF also argue that the Court should dismiss Run Gum’s case because they have implied immunity under the 1998 Ted Stevens Olympic and Amateur Sports Act (“Act”). By claiming implied immunity the UCOS is arguing that enforcement of antitrust laws would conflict with their duties under the Act. Courts have stated that implied immunity will only be found where “necessary” to make the regulatory scheme “work” and then “only to the minimum extent necessary.”

This Supreme Court has only found implied immunity in one case, Gordon v. New York Stock Exchange, but the USOC has a strong chance that it would apply in this case.

The USOC seems to have multiple defenses to these claims by Run Gum, but discovery may allow Run Gum to find documents supporting their allegations of unnamed co-conspirators.

Read the full complaint here.