Following the preliminary ruling of the Court of Justice of the European Union (“CJEU”) issued last  December 2023, the European Super League (ESL) case (C-333/21) has reached a new milestone on the application of competition law to sports governance.

The case in question was initiated by European Super League Company, S.L. (ESLC) before the Commercial Court No. 17 of Madrid, against both, the Fédération Internationale de Football Association (FIFA) and the Union of European Football Associations (UEFA), arguing that their rules on the prior approval of interclub football competitions and the exploitation of media rights were contrary to EU law. In particular, ESLC based its allegations on the fact that both FIFA and UEFA refused to recognize the ESL and stated that they would exclude from their competitions any professional football club or player participating in such competition. 

The Spanish Court referred some questions for preliminary ruling to the CJEU, including whether FIFA and UEFA hold a dominant position.

The CJEU observed that Sports Governing Bodies (“SGBs”) have the authority to adopt rules that regulate and authorize third-party sporting events and the participation of their own members in such events. However, this regulatory function must also be subject to certain limits in order to comply with competition rules and freedom of movement. The CJEU concluded that FIFA and UEFA were indeed abusing a dominant position on the basis that their regulatory powers were not subject to appropriate limits. For further information on the CJEU judgement, please see the article available on our Competition & EU website on Future Governance of Sports & Competition Law.

On the basis of the CJEU’s preliminary ruling, on May 24, 2024, the Spanish Court issued its final judgment which partially upheld the ESLC's claims against UEFA and FIFA (Judgment No. 69/2024) and - unless appealed - ended the dispute. 

The Spanish Court focused on the analysis of the prior authorisation scheme for events organized by third parties, under which UEFA and FIFA could control the market of interclub football competitions. Following the CJEU’s ruling, the Court stated that UEFA and FIFA’s conduct infringed Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”).

1. UEFA and FIFA's authorization rules constituted an abuse of a dominant position

Regarding Article 102 TFEU, the Spanish Court recognized that UEFA and FIFA’s prior authorization system created entry barriers and hindered competition in the market. 

In line with the CJEU’s conclusions, the Court clarified that sports’ governing systems are not “per se” anti-competitive, but this depends on the fulfilment of certain conditions. In this case, the Spanish Court considered that UEFA and FIFA regulations lacked appropriate procedural criteria governing the authorisation system, and concluded that:

• There were not any material and objective criteria establishing the conditions under which prior authorisations must be assessed, allowing discretionary behaviour which prevented third party claims challenging UEFA and FIFA’s decisions. 
• Despite the publicity and accessibility of these regulations, a more unitary, clear, and accessible regulatory framework was needed, to limit the governing bodies' independent market actions, and promote competition. 
• The potential for both SGBs to impose sanctions was seen as a competition limitation itself and a clear entry barrier to the market.

2. Prior authorisation rules can restrict competition by object

The prior authorisation scheme was also considered to be a restriction by object in breach of Article 101 TFEU. According to the CJEU’s conclusions, UEFA and FIFA’s rules amounted to a ‘decision’ by associations of undertakings, within the meaning of Article 101 TFEU, because the rules had a direct impact on the conditions in which the economic activity is exercised by its members. 

In this regard, the Spanish judge also considered that the prior approval system did not include the necessary limits, obligations and monitoring mechanisms to ensure that they are transparent, objective, and non-discriminatory.

3. Conclusions

The Spanish Court’s analysis considers SGB’s ability to act unilaterally on the market. The judgment highlights that this ability is not unchecked: according to the Court, the lack of transparency and proportionality in the design of the prior authorisation system allowed both UEFA and FIFA to impose potentially unfair and disproportionate restrictions, creating access barriers and unjustifiably prevented competitors from entering the market.

Therefore, the Spanish court has ordered FIFA and UEFA to cease the anticompetitive conduct and, to the extent possible, remove the effects of the actions carried out in their opposition to the ESL (e.g., public announcements, disciplinary proceedings, or any other equivalent measures).

This judgment will become final on June 24, 2024, unless an appeal is filed before the Provincial High Court of Madrid.

The Spanish Judgment follows the CJEU ruling and (subject to any appeal) underlines the limits on the regulatory role of SGBs as regards prior approval of third-party events. Even though the Court focuses on football competitions in this case, the legal principles set out in the Spanish and CJEU judgments will likely apply more broadly to different sports or sectors where entities play a regulatory role. 

It is of particular importance that SGB’s review their authorisation systems, and ensure they have appropriate procedural criteria in place, which are clearly defined, ensuring they are transparent, objective, proportionate, and non-discriminatory.

If you need more information or further guidance in this area, please contact Dr. Saskia King and Candela Sotés.

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