On Wednesday, Skechers filed a federal court complaint against Adidas, accusing the sneaker giant of false advertising and unfair competition.
The lawsuit stems from the 2017 fraud and corruption charges brought by the U.S. Attorney’s Office for the Southern District of New York, which include a claim that Adidas paid families of top high school recruits in exchange for their commitment to play for schools sponsored by Adidas, Forbes reported.
In the complaint Skechers said, “Adidas would have consumers, investors and the public believe that hot, up-and-coming collegiate basketball players, as well as talented young players who move on to the National Basketball Association (“NBA”), choose Adidas’s products due to their supposed superior performance and style. In fact, however, Adidas has coopted young players into wearing and expressly or implicitly endorsing its products by funneling hundreds of thousands of dollars in secret payments to players, their coaches, and/or family members in violation of National Collegiate Athletic Association (“NCAA”) rules.”
Skechers went on to claim that the “illicit” payments created an unfair playing field for competitors who compete for the “cachet of having trend-setting high-school and college athletes seen in their products” and “unfairly bolstered consumer perceptions of Adidas’s overall brand quality and image well beyond the basketball footwear market.”
Skechers, which has taken some flak on social media for the lawsuit because it does not have a basketball shoe program, claims that the effects of Adidas’ “illicit bribery program” are not limited to basketball products. The company said high-profile sponsorships and authentic endorsements have a “positive spillover effect on the overall image and reputation of a brand, as well as consumer preferences outside of the sport itself.”
As a result of Adidas’ “ill-gotten profits,” Skechers said it has incurred increased advertising expenses, lost sales and profits, and seen the value of its brands relative to that of Adidas diminish in the marketplace.
In a response to Forbes, an Adidas spokesperson called the complaint “frivolous and nonsensical.”