Editor’s note: Stefano Bastianon is Associate Professor in European
Law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.
He is also member of the IVth Division of the High Court of Sport
Justice (Collegio di Garanzia dello sport) at the National Olympic Committee.
1. From the very beginning, the outcome of the ISU case was highly predictable, at
least for those who are familiar with the basics of antitrust law.
Nevertheless, more than twenty years after the Bosman judgment, the sports sector has shown the same
shortsightedness and inability to see the forest for the trees. Even this
attitude was highly predictable, at least for those who know the basics of
sports governance. The final result is a clear-cut decision capable of
influencing the entire sports movement.
2. On the 8th of December 2017, the European
Commission ruled that ISU’s eligibility rules breached EU
competition law. In particular, the Commission focused on the ISU’s eligibility
rule, according to which speed skaters participating in competitions that were not
approved by the ISU face severe penalties up to a lifetime ban from all major
international speed skating events. The Commission found that such rules
restrict competition and enable the ISU to pursue its own commercial interests
to the detriment of athletes and organizers of competing events[1].
In sharp contrast with the Commission’s decision is the ISU’s
statement published the same day. Indeed, according to the ISU
the Commission’s decision is wrong because it fails to consider the specific
nature of sports by putting commercial interests ahead of the principles of
integrity, health and safety that protect fair play in sport. For this reason
the statement ends with the ISU’s reserve to appeal the decision.
3. As it often occurs, small cases (that is cases
involving almost unknown athletes or less popular sports and for this reason
often underestimated) are able to generate consequences of great importance,
presenting many aspects of interest to scholars of EU sports law: this is the
case of the ISU affair.
4. First of all, it is a matter of common knowledge that
the Commission tends not to intervene in cases dealing with regulatory and
organizational aspects of sport. To this regard, it is sufficient to consider
that in the 1999 Mouscron case the
Commission took the view that the UEFA Cup rule requiring that each club must
play its home match at its own ground ("at home and away from home"
rule) was a sports rule that did not fall within the scope of the Treaty's
competition rules and therefore rejected the complaint. In the 2001 FIA case the
Commission closed various anti-trust investigations into certain regulations
and commercial arrangements involving Formula One after the parties agreed to
make changes which limited the FIA to a regulatory role, so as to prevent any
conflict of interests and remove certain commercial restrictions imposed on
circuit owners and TV broadcasters. Similarly, in the 2002 FIFA case, the
Commission closed its investigation into the rules governing international
transfers of football players, in which it formally rejected the complaints
related to FIFA in the light of the adoption of new rules capable of balancing a
player’s fundamental right to free movement and stability of contracts together
with the legitimate objective of integrity of the sport and the stability of
championships. Lastly, in the 2002 UEFA multi-ownership rule case the
Commission established that the purpose of the rule was not to distort
competition, but to guarantee the integrity of the competitions it organizes
and rejected the complaint. More recently, in the 2011 Formula One Engine Manufacturers case and the
2014 Financial Fair-Play case the
Commission rejected the complaints because of a lack of community interest. In
this context, even from a purely statistical point of view, the ISU decision
cannot be underestimated.
5. Secondly, one aspect of the importance of the ISU
decision lies in the specific matter dealt with. Indeed, eligibility rules
(although sometimes differently named) are a common element of many sports. For
example the FINA
General Rule 4, under the heading “Unauthorised relations”, states
that
«no
affiliated Member shall have any kind of relationship with a non-affiliated or
suspended body (…). Any individual or group violating this Rule shall be
suspended by the affiliated Member for a minimum period of one year, up to a
maximum period of two years. (…). Each Member that conducts a competition shall
strictly enforce the FINA Rules governing eligibility».
The FIG
Technical Regulations, Appendix B (Rules of
Eligibility for the International Gymnastic Federation) state that
«an eligible gymnast
is any gymnast who abides by the eligibility rules of the FIG and the gymnast's
National Federation. In any competition sanctioned or conducted by the FIG,
each National Federation is responsible for certifying the eligibility of
gymnasts from its country. Only gymnasts meeting the requirements of Regulation
I are authorised to participate in official competitions and particularly those
competitions which qualify gymnasts for Olympic Games and Youth Olympic Games
(…). A gymnast may not: (…); b) take part in any gymnastic competition or
exhibition which is not sanctioned by the FIG or his/her National Federation
(…). Any gymnast infringing these rules, after their enforcement, may not claim
to be eligible to participate in the Olympic Games and Youth Olympic Games or
qualifying tournaments for the Games».
The FIH
Regulations on Sanctioned and Unsanctioned Events state
that
«it is
prohibited for any National Association, and for any organisation or individual
(including Athletes, technical officials, umpires, coaching or management
staff) under the jurisdiction of a National Association, to participate in any
manner in an Unsanctioned Event. Any Athlete or other individual who
participates in any capacity in an Unsanctioned Event is automatically
ineligible for twelve months thereafter to participate in any capacity in any
International Event».
The UCI
Cycling Regulations, under the heading «Forbidden Races», state
that
«no
licence holder may participate in an event that has not been included on a
national, continental or world calendar or that has not been recognised by a
national federation, a continental confederation or the UCI».
As a consequence,
the ISU decision goes far beyond the
specific sport considered (speed skating) and represents a clear message sent
by the Commission to the entire sports world.
6. From
this point of view, it is important not to forget that before the Commission there
are still pending two complaints lodged respectively by the Euroleague Basketball
and by FIBA. The dispute between FIBA and Euroleague Basketball goes back to
the end of 2015 when FIBA announced the creation of a basketball Champions
League in direct competition with the two European professional clubs’
competitions organized by the ECA. In order to force professional clubs to
participate in the new Basketball Champions League, FIBA did not hesitate to
put pressure on national federations threatening the possibility of excluding
their national teams from participation in main competitions such as EuroBasket
and the Olympic Games. According to the Euroleague
Basketball the complaint «targets
the unacceptable and illegal threats and pressures that FIBA and its member
federations are making against clubs, players and referees to force them to
abandon the Euroleague and the EuroCup and only participate in FIBA
competitions. The complaint's objective is to guarantee that clubs, players and
referees can freely make the choice to participate in the competitions that
they consider appropriate without being subject to threats or pressures. FIBA
is violating European Union law because, in a blatant conflict of interest,
FIBA has rules on its books that provide for sanctions against those who are
involved in competitions not approved by FIBA». In a
completely specular way, FIBA has
lodged a complaint against the Euroleague Basketball alleging an abusive tying
by imposing undue pressure on leagues and clubs, as well as threatening
exclusion from the Euroleague unless they commit to the EuroCup (…); a
“syndication agreement” circulated among the 11 A license clubs who hold the
majority of votes in ECA, meaning that six clubs control ECA, including all
Euroleague and EuroCup decisions in sporting and commercial matters;
arbitrarily cherry-picking clubs for Euroleague and EuroCup, which means
destroying any commercial and sporting value of domestic leagues and
undermining the competitive balance in European basketball; abusively
discriminating against financially weaker clubs, thereby placing them at a
further competitive disadvantage». However, the FIBA/Euroleague dispute
involves another fundamental aspect related to the scheduling of competitions.
According to FIBA, the new Euroleague calendar does not include windows of time
for national team competitions in February or November, and for this reason, the
Euroleague is preventing the release of players to national team competitions.
On the contrary, according to the Euroleague, FIBA’s new windows in February
and November represent a change from the past where international competitions,
including the World Cup qualifiers, were held in the summer, during the
offseason for most leagues.[2]
Although different in many respects compared to the ISU case, the FIBA/Euroleague affair raises again the
problem of conflict of interest when sports federations pretend to exercise
autonomously their regulatory power for the sake of the organization of sport
and to simultaneously carry out an economic activity related to the
organization of sporting events. In consideration of the dual nature of sports federations,
the basic problem to be solved is to clarify if and to what extent the conduct
of a sports federation is legitimate when it uses its regulatory power to
exclude or marginalize third parties from the market of the organization of
sporting events.
7. Going
back to the merit of the ISU affair
and waiting to read the decision, the Commission’s press release and the statement by
Commissioner Vestager are very important in order to better understand the
scope and limits of the decision. The decision is not about the pyramid
structure of European sports. The principle of a single federation for each
sport and the right of the federations to organise competition from local to
international levels is a milestone of the European model of sport. In this
context the decision does not question the right of sports federations to enact
rules necessary to achieve those goals. However, the ISU decision confirms that sport is not just for fun, but it is
also a business. Therefore, although the Commission does not intend “to be the
referee in every dispute about sport”, in matters dealing with the economic
dimension of sport, sports federations must understand that the business of
sports has to comply with competition rules. This means that the sole fact that
eligibility rules or any other rule enacted by sports federations pursue a
legitimate objective (for example, the protection of athletes’ health, the
integrity and the proper conduct of sport, the fight against doping) does not
represent a valid justification to put those rules outside the scope of EU law.
Indeed, according to the Court of
Justice’s case law, sporting rules set up by sports federations are
compatible with EU law only if they pursue a legitimate objective and the
restrictions that they create are inherent and proportionate to reaching this
objective. Therefore, in cases relating to the exercise of regulatory power by
sports federations the problem does not concern the legitimate nature of the
objectives pursued. Generally speaking, in all the cases examined by the
Commission and National antitrust authorities, the legitimacy of the objectives
pursued by the federations has never been questioned. On the contrary, in those
cases the problem was the inherent and proportionate character of the restrictions
created by the federations through the exercise of their regulatory power. From
this point of view, therefore, it can be said that it must certainly be
considered inherent and proportionate to the objective of ensuring the
integrity of the sport the rule requiring the athletes who participate in an
event not authorized by the respective federation to undergo, at their own
expense, an anti-doping tests before being able to attend an event organized by
the federation. Quite the reverse, a clause sanctioning the athlete who
participates in a competition not authorized by the federation with a lifetime
ban from all the events organized by the federation appears totally
disproportionate. Similarly, it must certainly be considered inherent and
proportionate to the objective of ensuring the integrity of the sport the rule
requiring anyone who intends to organize a sporting event outside the federation
to ensure compliance with the rules of the game, as elaborated by the
federation, and the anti-doping controls. In contrast, the clause that imposes
on the organizer of an event the obligation to respect the rules of the
federation in regards to the choice of the athletes or teams admitted to
participate in such competition must be considered disproportionate. Although
it is true that the European model of sport expressly refers to the mechanism
of promotion and relegation as a distinguishing feature compared to the US
model, it is equally true that the Commission has never qualified the structure
of open leagues as a legitimate objective capable of justifying the provision
of rules restricting competition or the free movement of persons. Moreover, even
considering the model of the open leagues a necessary feature of the European
sports model, it must be emphasized that the organization of a sporting event based
on a system of special licenses is not in itself in contrast with the founding
values of the European sports model. On the one hand, the existence of other
events (national and European) characterized by the traditional mechanisms of
promotion and relegation represents the best safeguard of the European model of
sport. However, it is clear that in order to protect the meritocratic criterion
behind the mechanism of promotion and relegation it is sufficient to provide a
mixed system where some athletes or teams are admitted on the basis of a
licence and other athletes/teams are admitted on the basis of the results
achieved on the pitch.
8. We can imagine the ISU’s disappointment regarding the Commission’s
decision. On the contrary, what is really
difficult to understand is the ISU’s position shown in the statement published on
the same day of the Commission’s decision. The idea that the Commission’s
decision fails to consider the specific nature of sport is simply nonsense
considering the rather vague nature of the notion of specificity of sports,
especially in the post Meca Medina
era. Similarly, the idea that the Commission’s decision puts commercial
interests ahead of the principles of integrity, health, and safety that protect
fair play in sports has no legal basis. In the same way, the idea that the
decision is contrary to the Treaty, which recognizes the voluntary, social, and
educational functions of sports reveals a serious lack of knowledge of the
basics of EU law applied to the sports sector. On the other hand, the ISU
correctly affirms that its eligibility rules—similar to the
eligibility rules of many other international sports federations—ensure
the protection of the health and safety of athletes at all authorized events as
well as the integrity of sports events, and that these rules are essential to
the role of international federations as the guardians of sports movement. However,
it is easy to assert that the Commission’s decision does not question this
argument and the fundamental role of international federations to organize the
proper and correct conduct of sport. To
this regard, the decision not to impose a fine on the ISU is a clear signal.
Another signal is represented by the recognition that there are many disputes
which have little or nothing at all to do with competition rules as they raise
primarily issues related to the governance of a sport. In other words, sports
federations must understand that the sole fact that they are charged to
guarantee the integrity and proper conduct of their sport, the protection of
athletes’ health, and other fundamental values related to sports does not
automatically mean that the rules enacted to pursue these objectives cannot be
scrutinized through the lens of EU law. Once and for all, it should be
understood that when the exercise of regulatory power by sports federations is
able to affect the distinct market of the organization of sports events, in which
sports federations compete with other sports events organisers, EU law applies.
This new context should have been evident following the Bosman ruling and, above all, after the Meca Medina judgment. Unfortunately, the ISU decision (and the ISU’s reaction) confirms that this is not yet
the case.