Marc Penman: CJEU delivers significant opinions for sporting competitions
Marc Penman comments on two cases that could have serious implications for sport worldwide.
Ordinarily, when we discuss competition in the sporting world we are usually focused on individuals and/or teams going toe to toe and battling it out for glory and bragging rights over one another. Recently however, competition in sports has taken on a slightly different guise, with Advocate General Athanasios Rantos of the Court of Justice of the European Union (CJEU) delivering two separate competition law case opinions – each with potentially significant ramifications for the operation of sporting associations and competitions in Europe (and perhaps around the world).
Whilst the circumstances of each case are different, both relate to arguments raised in respect of anticompetitive practices/behaviour, contrary to EU competition law and rules. This article looks at some of the main points from both opinions, and also considers what the opinions might mean for the sporting world in the future.
International Skating Union (ISU) v European Commission
The opinion in the ISU case provides an example of a situation whereby denial of market access to third parties may not necessarily constitute anticompetitive behaviour, inconsistent with competition law. By way of brief background, the ISU is the sole international sports federation recognised by the International Olympic Committee as being responsible for the regulation and administration of figure and speed skating on ice. Through enforcement of separate versions of ISU “eligibility rules” (one in 2014 and 2016), which essentially prohibited participation in speed skating events not recognised by the ISU, it was previously concluded that the ISU rules had the object of restricting competition within the meaning of Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). Application of these rules subjected athletes to severe penalties (including lifetime bans for the most serious breaches). This conclusion was appealed, with ISU looking to set aside part of the judgement of the General Court.
Within his opinion, AG Rantos considered (among other matters), that whilst sports governing bodies are not, in principle, exempt from EU competition law, such sports bodies may, under certain conditions, deny market access to third parties, without this denial constituting an infringement of competition law. Such measures may be legitimate according to AG Rantos, provided that the denial of access is justified by legitimate objectives and that the measures taken are proportionate to those objectives. In light of this, and the view that the General Court’s conclusion not well-founded, AG Rantos proposed that the ISU case be referred back to the General Court, and that the earlier judgement of the General Court – confirming the anticompetitive nature of the ISU rules – be set aside.
It remains to be seen what will happen when the case is referred back to the General Court. However, the opinion of AG Rantos to set aside the earlier conclusion, may be one that has wide-ranging implications for sporting bodies and similar restrictions generally (and the case will no doubt be monitored closely around the sporting world).
European Superleague Company
Whilst the eyes of the footballing world were firmly fixed on the Qatar World Cup and the fairy-tale ending for Argentina’s Lionel Messi, a significant blow was dealt in the spat that almost entirely engulfed European football in the summer of 2021. This is, of course, the fallout between the football clubs supporting the ill-fated European Super League (which clubs formed the European Superleague Company (ESLC)), and football’s governing bodies FIFA (the International Association Football Federation) and UEFA (the Union of European Football Associations).
At the time, news of the European Super League and its controversy dominated mainstream media, and appeared to send football fans across Europe into a mixture of rage and disbelief. For those who may have missed this story the concept of a new European Super League was unveiled which would initially see 20 of Europe’s “top clubs” come head to head in a league format that would rival the UEFA Champions League. In the end, and under immense pressure from football fans and governing bodies, almost all of the founding member clubs (including six top flight English Premier League clubs) withdrew their interest in progressing plans for the league, and made efforts to distance themselves from the concept thereafter.
However, three clubs remained defiant under this pressure, and remain determined to make a success of the league – claiming that they are well within their rights to form the breakaway competition. In response to this defiance (and to the concept generally) UEFA and FIFA were clear that any such breakaway would see individual players competing in a European Super League, be banned from international competition. It would also result in those clubs competing being removed from their domestic leagues. In addition, neither governing body would recognise the breakaway league. The threats from football’s governing bodies were severe – and enough to halt any momentum and support of the league in its tracks. Those clubs still involved in trying to keep the concept alive are of the view that UEFA and FIFA are breaching EU competition laws (and continue to fight the case).
Fast forward to mid-December, and the opinion of AG Rantos appears to have struck a fatal blow to the concept of the European Super League – perhaps much to the delight of football fans around Europe. The blow came, as AG Rantos recognised that while the ESLC was free to establish its own competition outside of those operated by FIFA and UEFA, it cannot continue to participate in those competitions organised by FIFA and EUFA without the governing bodies prior consent. This was on the basis that (among other findings) AG Rantos considered the FIFA-UEFA rules under which such prior approval is required (including the legitimate objectives pursued by FIFA and UEFA), to be compatible with EU competition law.
Given the history here, the chances of FIFA and UEFA providing such consent are perhaps non-existent, and the prospects of a European Super League (at least for now) appear to have been knocked out.
LIV to fight another day?
As noted above, the ramifications of these two significant competition law opinions from AG Rantos could be wide ranging for the entire sporting world (not just restricted to European competitions). One need only consider what the implications may be for the now infamous LIV Golf professional golf tour, should the relevant US authorities follow suit.
For context, having been officially launched in 2022, the Saudi-backed LIV Golf emerged as public enemy number one for many in the world of professional golf (including fans, some players, the media and the wider public), with a host of the world’s elite golfers deciding to switch their allegiance from the traditional establishment of professional golf (namely the PGA and European Tours), to join the new LIV Tour – and new format (with 54 holes played instead of 72 at LIV Tour events). It is well reported that the LIV Tour was a very lucrative option for professional golfers, with multi-millions worth of participation, signing on bonuses and prize money on the table.
The PGA Tour subsequently announced that any of its members who decided to participate in LIV Tour events would be subject to fines, suspensions and even bans from competing in future PGA Tour events. The United State Department of Justice later announced that it was monitoring this move from the PGA Tour, and looking into whether any “antitrust” violations has taken place as a result. Subsequent to this however (and despite the raising of an antitrust law suit against the PGA Tour), it was reported (in September 2022) that the PGA Tour had written to players previously suspended due to their involvement in the LIV Tour, to formally notify them of revocation of their PGA Tour memberships for the 2022-23 season.
If the opinion of AG Rantos in respect of the European Super League was to be followed by US authorities, it is likely that the LIV Tour would find itself in a somewhat tricky situation. The golfing world will continue to follow developments here closely, and it will be interesting to see whether the AG Rantos opinion has any bearing on the outcome.
Closer to home and in February 2023, a Sports Resolutions hearing will convene to consider the challenge by Ian Poulter and others to the response of the DP World Tour to impose sanctions on those players, for joining the LIV Tour. Whilst initial relief was granted in favour of the golfers, due to concerns as to the procedure followed in handing down the sanctions in question, fundamentally the golfers challenge to the action by the DP World Tour is, it is understood, to be on the premise that the golfers should be able to continue to hold membership of the DP World Tour and in addition play on the LIV Tour. This principle appears to be the same principle that AG Rantos has decried in his recent Opinion.
Competition law and rules are, of course, not restricted to the world of professional sport. Businesses are also bound by competition law, and must avoid certain prohibited practices and behaviour such as price fixing.
For completeness, it should be noted that whilst EU Competition law, namely Articles 101 and 102 of the TFEU, no longer applies in the UK following Brexit, certain provisions of the Competition Act 1998 are modelled closely on those Articles and these provisions will continue to apply in the UK. In addition, Articles 101 and 102 of the TFEU will continue to apply to any anti-competitive conduct that has an effect within the EU. Accordingly, the recent opinions of AG Rantos above are still relevant and perhaps persuasive albeit not strictly speaking legally binding, in respect of the application of UK competition law.
If your organisation has any questions about the operation of competition law, or have concerns about potentially anticompetitive behaviour, please get in touch with one of our competition law and/or sports law experts.
Marc Penman is a solicitor at Harper Macleod LLP