Eligibility for sporting competitions caught in the cross-hairs of competition law

In a recent announcement, the European Commission got its skates on and launched an investigation into the rules of the International Skating Union (ISU) which preclude skaters from taking part in events which have not been approved by the ISU. The announcement is only preliminary and does not represent a statement of what may or may not infringe competition law. However, it provides an indicator as to the issues of interest to the Commission, which may potentially have wider implications for other sporting bodies and the impact of competition law on their rules. It also reflects a growing willingness for EU bodies to apply antitrust rules to organisational rules of sporting bodies.

In this case, two Dutch ice speed skaters, Mark Tuitert and Niels Kerstholt, complained to the Commission that the ISU’s rules are “unduly preventing athletes from exercising their profession” by effectively precluding other companies or entities from organising alternative ice-skating events. No more detail has been provided at this stage, however the allegation bears a striking resemblance to that in the Bruce Baker dispute (see my previous post on this here) or the Indian dispute over the BCCI’s licensing of rival cricket events, Barmi v Board of Control for Cricket in India (see my post here).

Article 1(1) of the ISU’s Constitution (2014) makes clear that it is “the exclusive international sport federation (IF) recognized by the International Olympic Committee (IOC) administering Figure Skating and Speed Skating Sports throughout the world”. Article 2(1) goes on to provide that “[t]he ISU has jurisdiction throughout the world over all forms of international Figure and Speed Skating on ice and on synthetic polymeric ice surfaces whether performed using ice skating blades or substitutes simulating such blades”. Article 7(1)(b) contains a general prohibition that:

Members of the ISU, their affiliated clubs, their individual members and/or all other persons claiming standing as participants in the international activities of a Member or of the ISU […] shall not participate in any activities, national or international, against the integrity, the exclusive role and interests of the ISU.”

This set-up is not unusual. Indeed, in the so-called ‘European model of sport’, as recognised by the Commission itself, one of the ‘specificities of sport’ is that of:

the sport structure, including […] a pyramid structure of competitions from grassroots to elite level and organised solidarity mechanisms between the different levels and operators, the organisation of sport on a national basis, and the principle of a single federation per sport” (White Paper On Sport, COM(2007) 391 final, §4.1)

Although in its more recent documentation (e.g. the Communication, “Developing the European Dimension in Sport” COM(2011) 12 final) the Commission noted that there is no single model of good governance in sport (see §4.1), the ‘specificity of sport’ is now recognised in the EU Treaties, in particular at Article 165(1) TFEU.

However, since its seminal decision in Case C-519/04 P Meca-Medina and Majcen v Commission [2006] ECR I-06991 (ECLI:EU:C:2006:492), the Court of Justice of the European Union (“CJEU”) has made clear that “the mere fact that a rule is purely sporting in nature does not have the effect of removing from the scope of the Treaty the person engaging in the activity governed by that rule or the body which has laid it down”. In other words, sporting rules are not per se excluded from the scope of competition law where they have economic effects on the internal market. Indeed, other international bodies, such as FIFA, have been found to be dominant undertakings or associations of undertakings for the purposes of EU competition law (see, e.g. Case T-193/02 Piau v Commission of the European Communities [2005] E.C.R. II-209 (ECLI:EU:T:2005:22) at [114]-[115]).

On eligibility, the ISU Regulations provide (at Article 102(1)(b)) that an “eligible person”, i.e. one who can participate in ISU events (pursuant to Article 103), must be one who

elects to take part only in International Competitions which are:

1. sanctioned by the Member and/or the ISU;

2. conducted by ISU recognized and approved Officials, including Referees, Technical Controllers, Technical Specialists, Judges, Starters, Competitors Stewards and others; and conducted under ISU Regulations.

By virtue of Article 102(2), a person who fails to do so, and participates in other non-sanctioned events may be declared ineligible and effectively excluded from ISU activities.

The Commission has indicated the initial view that this “may prevent alternative event organisers from entering the market or drive them out of business” and therefore “constitute anti-competitive agreements and/or an abuse of a dominant market position in breach of EU antitrust rules”. It should be stressed that this is only an early announcement and the relevant rules will need to be examined according the objectives they pursue, and their proportionality in light of those objectives. However, the substantive analysis of the compatibility of sporting rules with EU competition law appears to be a growing trend.

In MOTOE (Case C-49/07 Motosykletistiki Omospondia Ellados NPID (MOTOE) v Elliniko Dimosio [2008] ECR I-4863 (ECLI:EU:C:2008:376)), the CJEU was faced with a case concerning an application by an independent Greek motorcycling association to organise various events, refused by the body charged by Greek law with authorising motorcycling events within the national territory. The CJEU carried out a substantive analysis of the legislative framework and held that “[a] system of undistorted competition, such as that provided for by the Treaty, can be guaranteed only if equality of opportunity is secured as between the various economic operators” (at [51]).

What is more, this is not the first time the ISU has been in the news in the past year, its rules on arbitration famously giving rise to the Munich Higher Regional Court’s decision in the case of Claudia Pechstein v ISU that a decision by the Court of Arbitration for Sport is void (as noted by Jane Mulcahy in her post). In that decision, the German Court considered that for the purposes of German law, the ISU was dominant on the relevant market, namely the organisation of World Speed Skating Championships, as it was the sole person able to organise those events.

These decisions appear to illustrate an incoming tide of interest from national and European competition authorities in the duties of international and national sporting bodies which are in monopolistic positions. It may be that the recognition of the organisational traditions of sport no longer cuts ice (or at least carries the same weight) with competition bodies as it did, such that rules conferring exclusivity and monopolies will need to be justified on the merits. However, this expansive approach is likely to be limited to cases of clear exclusions from or foreclosure of a market, given the Commission’s consistent recognition that the primary responsibility for governance of sports lies with “sport organisations” themselves (see, e.g. §4.2 of the 2012 Communication). Like skaters in the “Kiss and Cry”, awaiting results alongside the rink, this is a space to keep watching…

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