Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Image Rights in Professional Basketball (Part I): The ‘in-n-out rimshot’ of the Basketball Arbitral Tribunal to enforce players’ image rights contracts. By Thalia Diathesopoulou

A warning addressed to fans of French teams featuring in the recently launched video game NBA 2K15: Hurry up! The last jump ball for Strasbourg and Nanterre in NBA 2K 15 may occur earlier than expected. The French Labour Union of Basketball (Syndicat National du Basket, SNB) is dissatisfied that Euroleague and 2K Games did not ask (nor paid) for its permission before including the two teams of Pro A in the NBA 2K15 edition. What is at issue? French basketball players’ image rights have been transferred to SNB, which intends to start proceedings before the US Courts against 2K Games requesting 120.000 euros for unauthorized use of the players’ image rights. SNB is clear: it is not about the money, but rather to defend the players’ rights.[1] Strasbourg and Nanterre risk to “warm up” the virtual bench if this litigation goes ahead. 

Source: http://forums.nba-live.com/viewtopic.php?f=149&t=88661&start=250 More...

Sport and EU Competition Law: uncharted territories - (II) Mandatory player release systems with no compensation for clubs. By Ben Van Rompuy

The European Commission’s competition decisions in the area of sport, which set out broad principles regarding the interface between sports-related activities and EU competition law, are widely publicized. As a result of the decentralization of EU competition law enforcement, however, enforcement activity has largely shifted to the national level. Since 2004, national competition authorities (NCAs) and national courts are empowered to fully apply the EU competition rules on anti-competitive agreements (Article 101 TFEU) and abuse of a dominant position (Article 102 TFEU).

Even though NCAs and national courts have addressed a series of interesting competition cases (notably dealing with the regulatory aspects of sport) during the last ten years, the academic literature has largely overlooked these developments. This is unfortunate since all stakeholders (sports organisations, clubs, practitioners, etc.) increasingly need to learn from pressing issues arising in national cases and enforcement decisions. In a series of blog posts we will explore these unknown territories of the application of EU competition law to sport.

In this second installment of this blog series, we discuss a recent judgment of the regional court (Landgericht) of Dortmund finding that the International Handball Federation (IHF)’s mandatory release system of players for matches of national teams without compensation infringes EU and German competition law.[1] More...

The CAS Ad Hoc Division in 2014: Business as usual? – Part.1: The Jurisdiction quandary

The year is coming to an end and it has been a relatively busy one for the CAS Ad Hoc divisions. Indeed, the Ad Hoc division was, as usual now since the Olympic Games in Atlanta in 1996[1], settling  “Olympic” disputes during the Winter Olympics in Sochi. However, it was also, and this is a novelty, present at the Asian Games 2014 in Incheon.  Both divisions have had to deal with seven (published) cases in total (four in Sochi and three in Incheon). The early commentaries available on the web (here, here and there), have been relatively unmoved by this year’s case law. Was it then simply ‘business as usual’, or is there more to learn from the 2014 Ad Hoc awards? Two different dimensions of the 2014 decisions by the Ad Hoc Division seem relevant to elaborate on : the jurisdiction quandary (part. 1) and the selection drama (part. 2). More...

Sports Politics before the CAS II: Where does the freedom of speech of a Karate Official ends? By Thalia Diathesopoulou

On 6 October 2014, the CAS upheld the appeal filed by the former General Secretary of the World Karate Federation (WKF), George Yerolimpos, against the 6 February 2014 decision of the WKF Appeal Tribunal. With the award, the CAS confirmed a six-months membership suspension imposed upon the Appellant by the WKF Disciplinary Tribunal.[1] At a first glance, the case at issue seems to be an ordinary challenge of a disciplinary sanction imposed by a sports governing body. Nevertheless, this appeal lies at the heart of a highly acrimonious political fight for the leadership of the WKF, featuring two former ‘comrades’:  Mr Yerolimpos and Mr Espinos (current president of WKF). As the CAS puts it very lucidly, "this is a story about a power struggle within an international sporting body"[2], a story reminding the Saturn devouring his son myth.

This case, therefore, brings the dirty laundry of sports politics to the fore. Interestingly enough, this time the CAS does not hesitate to grapple with the political dimension of the case. More...

The new “Arrangement” between the European Commission and UEFA: A political capitulation of the EU

Yesterday, the European Commission stunned the European Sports Law world when it announced unexpectedly that it had signed a “partnership agreement with UEFA named (creatively): ‘The Arrangement for Cooperation between the European Commission and the Union of European Football Associations (UEFA)’. The press release indicates that this agreement is to “commit the two institutions to working together regularly in a tangible and constructive way on matters of shared interest”. The agreement was negotiated (as far as we know) secretly with UEFA. Despite recent meetings between EU Commissioner for sport Vassiliou and UEFA President Platini, the eventuality of such an outcome was never evoked. It is very unlikely that third-interested-parties (FIFPro, ECA, Supporters Direct etc.) were consulted in the process of drafting this Arrangement. This surprising move by an outgoing Commission will be analysed in a three-ponged approach. First, we will discuss the substance of the Arrangement (I). Thereafter, we will consider its potential legal value under EU law (II). Finally, and maybe more importantly, we will confront the political relevance of the agreement (III).  More...

Sports Politics before the CAS: Early signs of a ‘constitutional’ role for CAS? By Thalia Diathesopoulou

It took almost six months, a record of 26 witnesses and a 68 pages final award for the CAS to put an end to a long-delayed, continuously acrimonious and highly controversial presidential election for the Football Association of Thailand (FAT). Worawi Makudi can sit easy and safe on the throne of the FAT for his fourth consecutive term, since the CAS has dismissed the appeal filed by the other contender, Virach Chanpanich.[1]

Interestingly enough, it is one of the rare times that the CAS Appeal Division has been called to adjudicate on the fairness and regularity of the electoral process of a sports governing body. Having been established as the supreme judge of sports disputes, by reviewing the electoral process of international and national sports federations the CAS adds to its functions a role akin to the one played by a constitutional court in national legal systems. It seems that members of international and national federations increasingly see the CAS as an ultimate guardian of fairness and validity of internal electoral proceedings. Are these features - without prejudice to the CAS role as an arbitral body- the early sign of the emergence of a Constitutional Court for Sport? More...

Olympic Agenda 2020: To bid, or not to bid, that is the question!

This post is an extended version of an article published in August on hostcity.net.

The recent debacle among the candidate cities for the 2022 Winter Games has unveiled the depth of the bidding crisis faced by the Olympic Games. The reform process initiated in the guise of the Olympic Agenda 2020 must take this disenchantment seriously. The Olympic Agenda 2020 took off with a wide public consultation ending in April and is now at the end of the working groups phase. One of the working groups was specifically dedicated to the bidding process and was headed by IOC vice-president John Coates.  More...

The CAS jurisprudence on match-fixing in football: What can we learn from the Turkish cases? - Part 2: The procedural aspects. By Thalia Diathesopoulou

With this blog post, we continue the blog series on Turkish match-fixing cases and our attempt to map the still unchartered waters of the CAS’s match-fixing jurisprudence.

The first blog post addressed two issues related to the substance of match-fixing disputes, namely the legal characterization of the match-fixing related measure of ineligibility under Article 2.08 of the UEL Regulations as administrative or disciplinary measure and the scope of application of Article 2.08. In addition, The Turkish cases have raised procedural and evidentiary issues that need to be dealt with in the framework of match-fixing disputes.

The CAS panels have drawn a clear line between substantial and procedural matters. In this light, the Eskişehirspor panel declared the nature of Article 2.08 UEL Regulations to be administrative and rejected the application of UEFA Disciplinary Regulations to the substance. Nonetheless, it upheld that disciplinary rules and standards still apply to the procedure. This conclusion, however, can be considered puzzling in that disciplinary rules apply to the procedural matters arising by a pure administrative measure. To this extent, and despite the bifurcation of different applicable rules into substantial and procedural matters, the credibility of the qualification of Article 2.08 as administrative seems to be undermined. And here a question arises: How can the application of rules of different nature to substantial and procedural matters in an identical match-fixing dispute be explained?More...

The EU State aid and Sport Saga – A blockade to Florentino Perez’ latest “galactic” ambitions (part 2)

This is the second part of a blog series on the Real Madrid State aid case. In the previous blog on this case, an outline of all the relevant facts was provided and I analysed the first criterion of Article 107(1) TFEU, namely the criterion that an advantage must be conferred upon the recipient for the measure to be considered State aid. Having determined that Real Madrid has indeed benefited from the land transactions, the alleged aid measure has to be scrutinized under the other criteria of Article 107(1): the measure must be granted by a Member State or through State resources; the aid granted must be selective; and it must distorts or threatens to distort competition. In continuation, this blog will also analyze whether the alleged aid measure could be justified and declared compatible with EU law under Article 107(3) TFEU.More...

The CAS jurisprudence on match-fixing in football: What can we learn from the Turkish cases? - Part 1 - By Thalia Diathesopoulou

The editor’s note:

Two weeks ago we received the unpublished CAS award rendered in the Eskişehirspor case and decided to comment on it. In this post Thalia Diathesopoulou (Intern at the ASSER International Sports Law Centre) analyses the legal steps followed and interpretations adopted by CAS panels in this case and in a series of other Turkish match-fixing cases. The first part of the post will deal with the question of the legal nature of the ineligibility decision opposed by UEFA to clubs involved in one way or another into match-fixing and with the personal and material scope of UEFA’s rule on which this ineligibility is based. The second part is dedicated to the procedural rules applied in match-fixing cases.


Introduction

The unpredictability of the outcome is a sine qua non feature of sports. It is this inherent uncertainty that draws the line between sports and entertainment and triggers the interest of spectators, broadcasters and sponsors. Thus, match-fixing by jeopardising the integrity and unpredictability of sporting outcomes has been described, along with doping, as one of the major threats to modern sport.[1] More...


Asser International Sports Law Blog | FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München. By Marine Montejo

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München. By Marine Montejo

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre.

On 3 June 2016, the Landgericht München (“Munich Regional Court”) ordered temporary injunctions against the International Basketball Federation (“FIBA”) and FIBA Europe, prohibiting them from sanctioning clubs who want to participate in competitions organized by Euroleague Commercial Assets (“ECA”). The reasoning of the Court is based on breaches of German and EU competition law provisions. FIBA and FIBA Europe are, according to the judge, abusing their dominant position by excluding or threatening to exclude national teams from their international competitions because of the participation of their clubs in the Euroleague. This decision is the first judicial step taken in the ongoing legal battle between FIBA and ECA over the organization of European basketball competitions.

This judgment raises several interesting points with regard to how the national judge deals with the alleged abuse of a dominant position by European and international federations. A few questions arise regarding the competence of the Munich Regional Court that may be interesting to first look at in the wake of an appeal before examining the substance of the case. 


1. FIBA Europe/FIBA vs Euroleague: the dispute’s background

FIBA and FIBA Europe are involved in a bitter struggle with ECA for the control of the European basketball competitions. The dispute commenced with FIBA Europe (fully supported by FIBA) announcing the creation of a Basketball Champions League starting from the 2016-2017 season at the end of last year. Through the new “official” competition, FIBA intends to reinstate its hold over the organization of European championships. Back in 2001, ECA took over the organization of the European professional clubs’ competition after a harsh row with FIBA. FIBA did not trademark the name “Euroleague”, leaving the organisation without any legal avenues to prevent its use elsewhere. It battled for a year with ECA but finally left the organisation of those competitions to ECA in order to promote uniformity at that level of competition. Since then, Euroleague and Eurocup, the continent’s top two clubs’ competitions, are overseen by ECA, a commercial private body owned by the clubs participating in those tournaments. The status quo has now been challenged by the creation of a FIBA rival competition and the newly created fracture in European professional basketball is showing no signs of letting up, risking the possibility of having two continental leagues in competition with each other as of next season. In response to the creation of the FIBA Champions League, ECA announced its intention not only to maintain its competitions but to evolve toward a closed, franchise-based league. In retaliation, FIBA Europe (publicly backed by FIBA) put pressure on national federations by threatening to withdraw their rights to participate in its international competitions, including EuroBasket 2017, if they would continue allowing their clubs to participate in the ECA competitions (Euroleague and Eurocup). FIBA’s position, in that FIBA Executive Committee decided to fully support FIBA Europe’s decision, has also raised concerns surrounding possible sanctions on national teams for the 2016 Rio Olympic Games.  

At this point the dispute moved away from the basketball court to the legal field. The first shoot out occurred in relation to the Euroleague which, in February, filed a complaint before the European Competition against FIBA for alleged abuses of their dominant position (art. 102 TFEU) by threatening national federations to force their professional clubs and leagues to rescind their participation in the Euroleague competitions. From its back court, FIBA caught the ball and, in April, filed a complaint against FIBA Executive Committee decided to fully support FIBA Europe’s decision. FIBA Executive Committee decided to fully support FIBA Europe’s decision. FIBA Executive Committee decided to fully support FIBA Europe’s decision. ECA before the same EU Commission for the same breaches of EU competition law provisions. Possibly for the first time in EU competition law, we have two undertakings filing two different complaints against the same parties for the same alleged breaches of article 102 TFEU. DG COMP, now in the place of a referee, has to decide whether it will open an investigation into the matter and if it so decides, it probably will have to open two procedures (or at least join both of them). 

 

2. The procedure and the jurisdiction of the Munich Regional Court 

One could think that it was a tight game in the hands of the Commission, but Euroleague, along with 12 professional basketball clubs, decided to spin dribble and scored a buzzer-beater by asking for preliminary injunctions before the Landgericht München. Preliminary injunctions (einstweilige Verfüngung) are interim remedies, provided by the German Code of Civil Procedure, for exceptional cases in civil and commercial matters. They are granted to secure the enforcement of a final judgement that may be endangered before the rights of the parties have been finally determined. Where the case is urgent, the Court is allowed to make a decision ex parte, namely without giving the respondent an opportunity to be heard and without an oral hearing. In the decision, the judge referred to the provision on urgency (section 937(2) of the Code of Civil Procedure) which implies that he felt the pressure of the run-up to the 2016 Rio Olympic Games and the 2016 Basketball Qualifying Tournament scheduled to take place at the beginning of July. Moreover, in its press release following the judgement, FIBA regretted that it was not invited, along with FIBA Europe, to present their views which tends to confirm that, in this case, the conditions for urgency were met and that both the international and European federations were ex parte in the dispute. 

The territorial jurisdiction of the Munich Regional Court is not of concern for FIBA Europe as it is seated in the same city. However, for FIBA, situated in Mies, Switzerland, the question should be addressed. The Court retained its competence from the Lugano Convention of 2007 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters to which Germany and Switzerland have signed. It then states that “pursuant to article 6(1) (of the) Lugano Convention, in proceedings against a number of defendants that involve the same matter and that it is expedient to hear together in order to avoid irreconcilable judgments, the proceedings may be heard in the place where one of the defendants is domiciled. In this case, this is Munich”. The Court may be too straightforward in establishing its competence.  

The clause on competence enshrined in Article 6(1) provides that “a person (…) may be sued (…) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”. The key legal concept for a national court to derive its competence from the Lugano Convention is whether the claims are so closely connected that a person/entity based in another State (in this case FIBA, Switzerland) may be subject to its scrutiny along with the others defendants (in this case FIBA Europe, Germany). In its decision, the Court enclosed three documents transmitted by the appellants through which the Slovenian, Italian and Hellenic national basketball federations were warned about potential sanctions they were facing due to the actions of their clubs entering into an agreement with ECA. These documents were signed by Kamil Novak, FIBA Europe Executive Director, and referred to FIBA Europe’s Board decision to ban national federations from participating in Senior men’s national team competitions organised by FIBA Europe because their clubs appear to be taking part in ECA competitions. These assumptions were based on press statements about their intention to take part in ECA competitions. The letters are only of relevance to FIBA insofar as a copy of the so-called letter was sent to the international federation. It takes a stretch of the imagination to consider, from these documents only, that the claim against FIBA is closely connected to the one against FIBA Europe.

Moreover, article 2(1) of the Convention provides that “persons domiciled in a State bound by this Convention shall, whatever their nationality, be sued in the Court of that States”. FIBA could argue that this is the case of Swiss Courts. A number of exceptions exist to this general provision. Under article 5(3) “a person domiciled in a State bound by this Convention may, in another State bound by this Convention, be sued (…) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”. In that case, FIBA could be sued in Germany because its decisions may have an effect on German basketball clubs. Unluckily, none of the applicants are German basketball clubs which, again, put the competence of the Munich Regional Court into perspective as, in the case of FIBA, there is no harmful effect yet.

In order to justify the competence of the Munich Court, it may be easier to rely on article 6(1) of the Convention, referred to above. In case C-352/13, Cartel Damage Claims (CDC) Hydrogen Peroxide SA, on the interpretation of article 6(1) of Regulation 44/2001, the wording of which is identical to that of Article 6(1) of the Lugano Convention, the Court states that “it is necessary to ascertain whether, between various claims brought by the same applicant against various defendants, there is a connection of such a kind that it is expedient to determine those actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings (…) In that regard, in order for judgments to be regarded as irreconcilable, it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in the context of the same situation of fact and law” (p. 20). It is true that FIBA publicly backed FIBA Europe when it threatened to extend the ban to its competitions and participation in the Olympic Games) and that the claim before the European Commission was filed by both international and European federations. It seems that the requirement that the same situation of fact and law must arise is satisfied in those circumstances. Moreover, and the judge refers to it, under FIBA’s General Statutes, national federations have the obligation to ensure that their clubs, leagues and players participate only in official international activities and competitions (art. 9.1) upon the risk of sanctions in the event of non-compliance (art. 12). In that case, and as is often the case for sports governing bodies, national basketball federations must implement the rules and decisions from FIBA and FIBA Europe which confirms that there is a connection between the two entities on this particular case and that the Munich Regional Court is presumably competent; even if, in this case, a more in-depth analysis on the rule of jurisdiction would have been welcome. 

 

3. Is FIBA Europe abusing its dominant position? 

Given that the Munich Regional Court held that it was competent, it granted preliminary injunctions to FIBA on the ground of an abuse of a dominant position under EU law (art 102 TFEU) and under the corresponding provisions in German law.  

The Court defined two markets where FIBA and FIBA Europe each hold a dominant position. FIBA is dominant on the market for “competitions of the national team”. That dominant position relies, according to the judge, on article 1(2) of FIBA’s Statutes providing that “FIBA is the sole competent authority for basketball throughout the world and is recognised as such by the International Olympic Committee”. A broader market definition for FIBA, as a worldwide basketball regulator, would be the market for basketball competitions. It is not contested that international federations hold a dominant position at the top of a sports organisation nor that they regulate all matters related to their sports with other (continental and national) federations and bodies at lower levels. This position is then secure by the principle of solidarity which, in the case of basketball, can be found in article 1(4), which provides that “all bodies and officials of FIBA must observe the General Statutes, Internal Regulations, other rules and regulations, and decisions of FIBA”, and article 9, which lists the obligations of members. That principle is reinforced with a mechanism of sanctions (articles 10, 11 and 12). However, the market may appear too broad. A narrower market may be the market for international basketball competitions of the national teams excluding continental competitions. This market would specifically target the mission of FIBA as an international competitions organizer for basketball. In particular, FIBA is responsible for the organisation of the FIBA Basketball World Cup and the FIBA Olympic Qualifying Tournament, with both competitions determining which teams will participate in the Olympic Games. While defining a market for “competitions of the national teams”, the judge targeted both of the markets where FIBA holds a dominant position. For FIBA Europe, the judge defined a market for “European competitions of the national teams”. This market covers FIBA Europe’s mission to organise the EuroBasket. The alleged excluding practices are related to the participation in European and international competitions of the national teams, so it seems that both narrower markets are relevant in the case where FIBA and FIBA Europe hold dominant positions.

While defining the relevant markets, the judge only targets competitions for national teams. Does the same still apply for club competitions? The core problem of the dispute is about the organisation of basketball professional club’s European competitions. If one would define a market for the professional basketball clubs’ European competitions that market may exists and ECA, as the sole organiser of Euroleague and Eurocup, is in a dominant position. The creation of the Basketball Champions League is an attempt from FIBA and FIBA Europe to enter that market and challenge that dominant position.  

Holding a dominant position on a market is not contrary to EU competition law provisions, but rather it is the abuse of that dominant position that needs to be examined. In the case of FIBA, the judge considers article 9(1) of FIBA Statutes regarding the obligations of the members, i.e., national federations. Under provision (d), “national member federations must (…) ensure at all times that their leagues, clubs, players and officials participate only in international activities and competitions officially recognised by the respective national member federations and by FIBA”. FIBA Europe sent a letter to three national federations advising them that their right to participate in Eurobasket 2017 had been withdrawn because some of their professional clubs chose to compete in the Euroleague 2016/2017. A copy of this letter was transmitted to FIBA, “which is competent to take any decisions it deems necessary regarding worldwide events”. From these letters, it is clear that FIBA and FIBA Europe used or will use their regulatory power to sanction national federations for a breach of their solidarity obligations. By doing so, national federations are excluded from all European and international competitions. Moreover, the pressure on national federations will probably lead to the exclusion of ECA from the market for professional basketball clubs’ European competitions as none of the clubs will be able to participate in the Euroleague. In that case, article 9(1) can rightly be qualified as an exclusivity clause that leads to an exclusionary abuse by dominant undertakings, and the judge is rightly assessing the situation, FIBA is abusing its dominant position by threatening to exclude national basketball teams from the 2016 Olympic qualifying tournament and, by extension, the 2016 Olympic Games. FIBA Europe is also abusing its dominant position by, in its case, excluding national basketball teams from the Eurobasket 2017. The fact that FIBA/FIBA Europe are creating a new European competition for clubs has nothing to do with their dominance; rather, a competition problem occurs when they use their power to sanction national federations by pressuring them to force their clubs to participate in the “official” competition. Similar situations are arising where international federations are fighting the emergence of “unsanctioned” private leagues by using their sanction powers. The Belgian competition authority already granted interim measures to the Longines Champions League in a dispute where the FEI tried to suspend riders and horses that were participating in the competition. A similar case involving ISU and suspended ice speed skaters is pending before the European Commission.  

Nonetheless, the German Court goes on to mention possible justifications to FIBA/FIBA Europe’s behaviour pertaining to article 101 TFEU. This is rather surprising, even though such a stance is permissible, after it just concluded there had been a breach of article 102 TFEU. If article 101 was to be applied, it could be argued that the fact that FIBA Europe and FIBA are excluding national federations constitutes concerted practices leading to restrictions upon competition on the market for professional basketball clubs’ European competitions. In that case, the analysis could move to article 101§3 and examine proportionate justifications. The judge seems sensible that the outcome of FIBA and FIBA Europe’s practices cannot lead to anything other than undermining the viability of Euroleague competitions by preventing clubs to participate. It does not appear, as such, as a proportionate justification.

However, the judge may, again, be too straightforward in his application of articles 101 and 102 TFEU. FIBA and FIBA Europe may argue that there are justifications for using their sanctions power. The Court of Justice already held that not every sporting rule that is capable of restricting competition infringes articles 101 and 102 TFEU (C-519/04, Meca Medina). In that case, in assessing the compatibility of the obligation for national basketball federations to force their professional clubs to take part in the Basketball Champions League upon sanction by the international and European federations, the judge must take into account the Wouters criteria (C-309/99): (i) the objectives of FIBA and FIBA Europe measure; (ii) whether the consequential effects that restrict competition are inherent in the pursuit of those objectives; and (iii) whether they are proportionate to them. As seen before, the pressure on national federations will probably have an adverse effect on competition, making it impossible for ECA to organise a viable competition as no professional clubs will take part (this doesn’t take into account the third factor – that professional clubs do not have any interest in European and international competitions, and that they are probably better off keeping their players). Nonetheless, FIBA may bring previous case law and article 165 TFEU to the dispute and argue that there is no breach of EU competition law in the sense that restrictive effects on competition are, in this case, inherent and necessary to the organisation of basketball. The specificity of sports organisations, the solidarity mechanisms between different levels of competition and the pyramidal structures have already been recognised. FIBA Europe and FIBA are, here, making sure that national federations comply with article 9(1) of the FIBA Statutes and that professional clubs will participate in its European competitions. FIBA is then meant, as the sole legitimate basketball authority, to apply sanctions if its members do not comply with their obligations. All the reasoning will focus on proving that these effects are proportionate to the legitimate genuine sporting interest pursued. The impact of FIBA Europe’s decision (and FIBA potential decision) is really important, and, it is readily apparent that FIBA should not focus on its commercial exploitation of the Basketball Champions League competition as it has already been decided that rules prohibiting clubs or athletes from participating in competitions other than those organised by sports federations under the threat of penalties do not comply with EU competition law provisions (see for example the FIA Commission decision, IP/01/1523). On the other hand, the Lethonen case on transfer periods (C-176/96) may be useful as a rule whose objective is to ensure the regularity of competitions (competitive balance, functioning of the championships and effective calendar) is more likely to comply with articles 101 and 102 TFEU. Those are just possible justifications and there is sufficient flexibility in articles 101 and 102 TFEU for FIBA and FIBA Europe to justify more proactive behaviours under EU competition law.  

The German judge also disregarded possible objective justifications under article 102 TFEU. In that case, again, the monopolistic pyramid structure of sport may be taken into account.  

The judge goes on to say that FIBA must await the outcome of antitrust proceedings before the Europe Commission regarding whether ECA is also abusing its dominant position. This is, again, really surprising for two reasons. On one hand, the judge does not tackle the behaviour of ECA in his decision. As discussed, ECA enjoyed a monopoly over the organisation of European competitions that FIBA and FIBA Europe wanted to challenge by creating the Basketball Champions League. In that dispute, ECA is also using its monopoly position toward professional clubs and national leagues to consolidate its organisation. On the other hand, filing a complaint before the European Commission does not presume that DG Competition will open an investigation on the matter. DG COMP enjoys a broad discretion with regard to opening an investigation based on the complaint. What will happen to FIBA if the Commission decides to reject the complaint without analysing its substance? Moreover, an in-depth investigation is a (very) long procedure that can take years before the Commission issues a decision. The German judge is putting FIBA and FIBA Europe under a lot of legal uncertainty and, while protecting the rights of Euroleague, threatened the viability of the European Basketball League if, in the end, ECA is also abusing its dominant position. This is probably the most questionable point in this judgement. 

Finally, the judge finds that “the entitlement to take part in Olympic Games should be decided for sports reasons. The decision of certain clubs to take part in a certain club competition has, in terms of sport, nothing whatsoever to do with a national team’s participation in international competitions”. Putting aside the fact that national teams are composed of athletes coming from those clubs and the controversies that already exist about the release of players, it is difficult to understand what the judge meant by this. FIBA is recognised by the IOC as the sole worldwide competent authority for basketball. As such, national federations must respect the rules FIBA sets in order to qualify for the Olympics. Regardless of the contested practices at stakes, FIBA has the power to sanction a federation if the latter does not comply with its regulations and the participation in its competition may be one of the sanctions it can impose.  

As a conclusion, it may be recalled that this judgement is provisional and probably the first of a long series. FIBA has already announced its intention to appeal the judgement, highlighting the fact that the contested sanctions were already withdrawn by FIBA Europe’s Board a few days before the Munich Regional Court released its decision and ECA’s position hasn’t properly been assessed. However, these circumstances and facts should not obfuscate the key legal question here – namely, the assessment under EU competition law of the use by international federation of its regulatory powers to stop the emergence of unsanctioned competitions.


Comments are closed