Author Archives: Ravi S. Mehta

About Ravi S. Mehta

Junior Barrister at Blackstone Chambers

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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Arcadia v Visa revisited: the Court of Appeal takes a strict approach to limitation

Competition damages claims can be notoriously complex. According to the Court of Appeal, however, that is no reason to free them from the ordinary English rules of limitation – however strict those rules might be.

Unlike the large majority of European limitation rules, where time starts running from the date of the victim’s knowledge, the English rule under the Limitation Act 1980 (“LA 1980”) is that time starts running from the moment the wrong is done, unless the victim can show that the wrong was concealed from him. The claimants in Arcadia Group Brands Ltd & Ors v Visa Inc & Ors [2015] EWCA Civ 883 argued that various relevant facts had been concealed. Ultimately, their difficulty was that they did have sufficient facts available to them to plead their case. Continue reading

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Of Megabytes and Men: the private use exception under the judicial lens and lessons for state aid claims

On 19 June 2015, the High Court allowed a claim for judicial review against the decision to introduce a narrow ‘private copying’ exception to the Copyright, Designs and Patents Act 1988 (the “CDPA 1988”). The decision is of interest to EU and competition lawyers for two reasons: (1) its examination of the standard of review in public law cases with an EU law dimension and also (2) its analysis of the state aid issues which were raised. Continue reading

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“It’s too late baby, now it’s too late”: limitation, competition claims and knowledge

How much knowledge does a potential claimant need before time begins to run against a competition claim against a party alleged to have breached competition law? This was the key question addressed by Mr Justice Simon in the first case in which an English Court has had to consider the effect of s.32 of the Limitation Act 1980 (“LA”) in the context of a competition claim. Continue reading

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Avoiding the clinch: judicial respect for the rules inherent to sport

In a recent bout in the High Court, the specificity of sporting disputes once again came to the fore. In Bruce Baker v British Boxing Board of Control [2014] EWHC 2074 (QB), 25 June 2014, Sir David Eady was faced with the old chestnut of a request for a court to interfere with a national sporting body’s decision to sanction one of its participants. One interim application later, and the BBBC was still standing. Continue reading

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“What’s in a Commission Decision?” and other lessons for national courts

In a decision of 13 February 2014, the Court of Justice of the European Union (“CJEU”) added a little gloss to an otherwise well-trodden path in relation to the binding aspects of a Commission Decision. For instance, it is well established that assessments made in recitals to a decision “are not in themselves capable of forming the subject of an application for annulment” unless they are “the necessary support for its operative part” (see Case T-138/89 Nederlandse Bankiersvereniging and Nederlandse Vereniging van Banken v Commission [1992] ECR II-2181 at [31]). What of statements of position by the Commission subsequent to its Decision, e.g. in order to facilitate its enforcement at national level? Continue reading

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To fight or not to fight: pharmaceutical patent settlements

On 19 April 2013, the OFT announced that it had issued a Statement of Objections following its investigation into patent litigation settlement agreements (PLSAs) in the pharmaceutical sector.  The underlying factual complaint related to GlaxoSmithKline’s alleged conduct in defence of one of its blockbuster drugs, Seroxat, which is a prominent anti-depressant (paroxetine). The central allegation is that GSK concluded PLSAs with three generics companies – Alpharma Limited (Alpharma), Generics (UK) Limited (GUK) and Norton Healthcare Limited (IVAX) – which had sought to compete with their own paroxetine medicines. It is alleged that at particular points between 2001 and 2004, GSK sought to challenge its competitors’ entry into the market by threatening or instigating patent litigation. It then concluded the agreements which offered financial sums in exchange for the generics’ commitment not to supply paroxetine independently for a relevant period within the patent protection of Seroxat – although they were able to do so before this protection had ended. Continue reading

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