Judgments with significant impact have been handed down by the Court of Justice of the European Union

On 21 December 2023 the Court of Justice of the European Union (CJEU) delivered three highly important judgments that constrain the latitude and discretion of sports federations, namely: the European Superleague (C-333/21), the International Skating Union (C-124/21 P) and Royal Antwerp Football Club (C-680/21).

These come a year after Advocate General Rantos’ Opinion on the former two cases, which we previously reported on here, and nine months after AG Szpunar’s Opinion on the latter case.

These judgments will likely have considerable impact on the application of competition law to sport. The outcomes of these cases are expected to have far-reaching legal, commercial and regulatory implications and could reshape the governance of sports within the European Union and beyond.

Preliminary takeaways from the 3 cases

1.      Sports governance must be scrupulous

The judgments confirm the ability of sports governing bodies to adopt rules with a view to authorising sporting events of third parties and to regulate participation by their members in these events.  However, because a sports governing body in a dominant position has the power to determine the conditions in which potentially competing undertakings may access the market, that power must be subject to: 

• substantive criteria which are suitable for ensuring that they are transparent, objective and precise, and 
• transparent and non-discriminatory, detailed procedural rules that do not deny effective access to the market and must have been laid down in an accessible form prior to their implementation.

The Superleague judgment does not prohibit, as such, FIFA/UEFA adopting rules on prior approval of and participation in new third party competitions. However, the CJEU considered that the applicable FIFA/UEFA rules infringed competition law because they were not transparent, objective, non-discriminatory and proportionate.  Moreover, the CJEU concluded that the applicable FIFA/UEFA rules for approval and governance of third party competitions did not meet this standard.

After today’s jurisprudence, more than ever, the devil will be in the detail as to how the rules of sports governing bodies are designed and applied.  Organisers of alternative sports events must be able to predict the result of their applications to those sporting bodies.

2.     Specific characteristics of sport downplayed

The CJEU acknowledges that sporting activities carry considerable social and educational importance and have specific characteristics which may potentially be taken into account, along with other elements, for the application of competition law. However, the CJEU considers that sports’ specific characteristics cannot lead to the exemption of sport from the application of EU law, including the competition rules.

3.     Rules of prior authorisation can restrict competition by object

In direct contrast to AG Rantos, the CJEU found that the rules of the International Skating Union concerning the prior authorisation of skating competitions had the ‘object’ of restricting competition to the detriment of athletes, consumers and audiences.

This is significant. The CJEU made clear that the organisation of competitions clearly constitute an ‘economic activity’ and therefore must comply with the competition rules, even though sport as an economic activity has certain specific features, namely, the existence of sporting bodies with regulatory, control and sanctioning powers. Although sports governing bodies may adopt rules (and use sanctions to ensure compliance with those rules), they must be subject to a framework ensuring the rules are transparent, objective, non-discriminatory and proportionate. If rules do not satisfy such a framework, then they are liable to make it possible to exclude any competing undertakings from the market and restrict the holding of new competitions. Plus such rules may prevent athletes from taking part in such competitions, as well as deprive spectators and broadcast audiences of any opportunity to watch such competitions.

The CJEU also was at pains to set out in detail the concept of restrictions of competition by object. Certain types of conduct “without necessarily being equally as harmful to competition” [as certain other practices] may have an anticompetitive object. Being excluded from the market is one such example, as is certain types of decisions by associations of undertakings aimed at coordinating the conduct of their members, such as in relation to prices. The CJEU gave a salient reminder that the fact certain conduct pursued a legitimate objective was not always enough to bring such conduct outside the application of the competition rules.

4.     Commercial exploitation of rights

The CJEU did not follow AG Rantos’ view on the compatibility of the rules granting FIFA and UEFA exclusive exploitation of media rights as regards competitions organised by them. AG Rantos had concluded that these rules did not infringe competition law since they were inherent in the pursuit of the legitimate objectives of sport and proportionate to them. The CJEU, conversely, found these rules infringed competition law due to the harm caused to European football clubs, all companies operating in media markets and, ultimately, consumers and television viewers, by preventing them from enjoying new and potentially innovative or interesting competitions. Nonetheless, the CJEU leaves the ultimate decision to Madrid’s Commercial Court, having regard to, for example, ensuring a solidarity-like redistribution of the profits generated.

5.     CAS jurisdiction downgraded

The CJEU acknowledged that although disputes can be submitted to an arbitration body with limited judicial review, the judicial review available must be able to cover compliance with EU public policy and competition rules.

Therefore, prior authorisation and eligibility rules must be subject to effective judicial review, which includes the court that reviews awards made by an arbitration body being entitled to refer questions to the CJEU.

While the possibility to seek damages or lodge a complaint with the Commission or a national competition authority may supplement effective judicial review, it cannot compensate for the absence of effective judicial review.

6.     Rules on home-grown players could infringe EU law

The CJEU held that the rules of UEFA and URBSFA on home-grown players could infringe competition law and the principle of the free movement of workers. The recruitment of talented players is an essential parameter of competition, which such rules appear to limit or control.

However, it will be up to the national court to decide whether such rules reveal a sufficient degree of harm so as to restrict competition by object, or instead whether competition is restricted by its actual or potential effects.

We will continue to digest these judgments and will keep you posted as the full impact of them begin to unfold over the coming months.

What Bird & Bird can do for you

Sports Federations should remain aware of the antitrust risks that continue to exist with the increasing number of new entrants and athletes that are willing to complain to the relevant competition authorities to claim access rights. Sports Federations remain under an obligation to ensure third parties are not unduly denied access to the market to the point that competition on that market is thereby distorted.

It is of particular importance that governing bodies undertake a review of the compliance of their rules to ensure that approval procedures for third party events are clearly defined, transparent, non-discriminatory and reviewable and that any restrictions are inherent and proportionate to the pursuit of legitimate objectives.

Not least, devising criteria that clearly, objectively and in as much detail as possible establish the conditions for access to the market in order to enable any organiser of third-party competitions to have: (i) sufficient visibility as to the procedure to be followed, (ii) the conditions to be satisfied in order to enter the market in question, and (iii) to expect if those conditions are met, the federation in question should not be able, in principle, to refuse it access to the market.

Please do get in touch if you would be interested in discussing this further with our team, we’d be delighted to help.  

You can contact Jose Rivas, Dr. Saskia King, Paula González Alarcón or Quinn Liang.

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