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 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.
We kick-start the
series with a recent investigation of the Swedish National Competition
Authority (NCA) into a so-called duty of loyalty clause applied by the Swedish Bodybuilding
and Fitness Federation (Svenska Kroppskulturförbundet, SKKF).
The SKKF is the only national member of the International
Bodybuilding Federation (IFBB) and organises
various championships in the sport of bodybuilding and fitness in Sweden. It is
essential for Swedish clubs, individual athletes, and officials to be a member
of the SKKF as this is prerequisite for participation in IFBB international
The IFBB’s rules and regulations form an integral part
of the SKKF’s Statutes. According to the SKKF’s rules, members who compete or
otherwise participate in contests that are not approved or authorised by the
SKFF or IFBB can be fined or suspended (i.e. the duty of loyalty clause).
Athletes who have taken part in an unsanctioned event must also test for
doping, at their own expenses, before they are allowed to compete at SKKF or
IFBB events again.
In October 2013, BMR Sport Nutrition
AB, a manufacturer of nutritional and bodybuilding
supplements that also occasionally organises unsanctioned bodybuilding and
fitness events in Sweden, filed a complaint before the NCA alleging that this
rule violates Article 101 TFEU and Chapter 2, Article 1 of the Swedish
Competition Act as it prevents event organisers from effectively competing with
the SKKF (i.e. they are deprived from the chance to gather the human resources
necessary for a successful event). The complainant submitted evidence that the
threat of a fine and/or the withdrawal of their license by the SKKF effectively
deterred athletes from participating in non-sanctioned events.
The Swedish bodybuilding case follows a 2011 decision
of the NCA, which ordered the Swedish Automobile Sports Federation (Svenska Bilsportförbundet, SBF) to abolish
its rules preventing members from participating in motorsport events not
authorized by the KKF.
On appeal by SBF, the Swedish Market Court upheld the decision in its entirety.
This “precedent” case dealt with two duty of loyalty
clauses in the SBF’s Common Rules prohibiting officials and contestants,
licensed by the SBF, to officiate or participate in motor sport events other
than those organised by the SBF or its member clubs. A violation of these
provisions could result in a fine and/or withdrawal of the licence to officiate
or compete in SBF events.
The NCA and the Market Court established that the
contested rules constituted a decision by an association of undertakings. While
the NCA had only applied national competition law, the Market Court, having
defined the organisation of motorsport competitions in Sweden as the relevant
product market, found that trade between the Member States was affected and
therefore also applied Article 101 TFEU. According to the Court, the mere
existence of the rules considerably distorted competition because they led to
an absolute ban for SBF members to participate in non-sanctioned events. It concluded
that, even if the rules would be regarded as serving a legitimate objective,
the total ban could not be considered proportional to achieving such an objective.
Moreover, the Court concluded that the restriction of competition could not
benefit from an exemption under Article 101(3) TFEU or Chapter 2, Article 1 of
the Swedish Competition Act.
While the Market Court’s judgment is far from
innovative and carefully followed the proportionality test adopted by the Court
of Justice in Meca-Medina, the case drew much media attention and raised concerns and criticism from the
Swedish sports movement. Having demonstrated the remedial potential of EU
competition law to challenge organisational sporting rules, it was only a
matter of time before further national enforcement action would result from
In a statement responding to the filing of the
complaint by BMR Sport Nutrition AB, the chairman of the SKKF contested the
apparent analogy with the SBF (motorsport) case. He essentially put forward
three reasons. First, the SKKF is a non-profit organisation that pursues an aim
in the general interest (i.e. the promotion of sport) and reinvests all its
income, which is insufficient to cover its costs, in its sports activities,
e.g. to fund education and training activities, doping tests, and travel
expenses of the national team. This precludes the assumption that it pursues an
economic activity. It follows that the SKKF cannot be regarded as an
undertaking for the purposes of competition law (contrary to commercially
successful sports associations). Second, the SKKF does not act independently of
the will of its members. Similar to trade unions, member athletes voluntarily
submit themselves to the applicable regulations when they join a member club.
They can move to change certain rules if they find, in a true democratic
spirit, a majority for such change. Alternatively, member athletes can choose
to leave their club and join another association. Third, the right of freedom
of association excludes the rule-making powers of the SKKF from the ambit of
the competition rules.
Nevertheless, following several meetings between the
NCA and the SKKF, the latter committed no longer to suspend or fine athletes,
coaches, officials or judges that participate in non-sanctioned events. The requirement that they must test for doping, at their own expense,
was not abolished. According to the SKFF, this requirement was necessary to
comply with the IFBB anti-doping rules, which conform to the provisions of the
World Anti-Doping Code.
Given the commitment of the SKKF to no longer apply
the duty of loyalty clause, the NCA decided to close the investigation without
concluding whether competition law had been infringed.
Those familiar with sports-related competition law
cases will surely recognize the arguments of the chairman of the SKKF to assert
immunity from the application of the competition rules. While they have been
tried and tested many times, also before the Union courts, these arguments keep
popping up. So let’s take a closer at why they are not accepted.
Regarding the claim that the SKKF is a non-profit
organisation that exclusively aims to promote the development of the sport, it
must be recalled that – if there still was any doubt - in Meca-Medina the Court of Justice made clear that the qualification
of a rule as “purely sporting” was insufficient to remove the body adopting
that rule (or the person engaging in the activity covered by it) from the scope
of the Treaty. It thus must be examined, irrespective of the nature of the
rule, whether the specific requirements of the various provisions of the Treaty
are met. For the purpose of the competition rules, the notion of “undertaking”
is a core jurisdictional element. According to established case law, this
concept covers “any entity engaged in an
economic activity regardless of the legal status of the entity or the way in
which it is financed”.
In an attempt to escape the bite of the competition
rules, various other sports associations have time and again asserted that they
cannot be regarded as “undertakings” because their objective is not the pursuit
of economic interests. Even when only considering their regulatory functions,
this reasoning finds no support in the case law. The Court of Justice has
consistently held that the concept of undertaking does not presuppose a
profit-making intention. The fact that entities are non-profit making has no
effect on their classification as undertakings.
Similarly, the fact that entities pursue cultural or social activities does not
in itself prevent these activities from being regarded as economic.
In the case at hand, it is clear that in addition to
the SKKF, even assuming that it organises bodybuilding and fitness events
without seeking to make profit, other entities like BMR Sport Nutrition AB are also
engaged in that activity (and do seek to make a profit). The SKKF offers goods
or services on a market in competition with others. The success or economic
survival of the SKKF ultimately depends on it being able to impose its services
to the detriment of those offered by other event organisers. Consequently, the
SKKF must be considered as an undertaking engaged in the markets for the organisation
and marketing of bodybuilding and fitness events.
Regarding the somewhat chucklesome claim that the SKKF
should be qualified as a trade union (or other professional association) that
cannot act independently of the will of its members, it is sufficient to stress
that Article 101 TFEU also applies to “associations of undertakings”. A federation
like the SKKF, the beacon of democracy it may be, is not an association of
employees but (also) of member clubs that engage in economic activities. Hence,
the result of the delimitation between the federation acting “in its own right”
or “merely as an executive organ of an agreement between its members” is irrelevant:
Article 101 TFEU still applies to its regulations.
Regarding the claim based on the principle of freedom
of association, indeed protected in the Swedish constitution as well as in the
EU legal order, it is difficult to see how the duty of loyalty clause could be
considered an inevitable result thereof. In any event, the Court of Justice has
made clear that this right cannot be so absolute as to afford sports
federations’ complete immunity from EU law.
In other words, the need to guarantee sports’ right of self-regulation cannot be
a blank check to avoid scrutiny of measures that may conceal the pursuit of
economic interest. Provided that its rules are proportional to a legitimate
objective, SKKF should have nothing to fear from the competition rules.
So contrary to what the chairman of the SKKF
contented, the analogy between its rule and the contested rule in the SBF
(motorsport) case was accurate. A confrontation with this inconvenient truth
was sufficient to convince the SKKF to commit itself to no longer suspend or
fine athletes, coaches, officials or judges for participating in non-sanctioned
competitions. That the requirement of a doping test (for those having participated
in competing events) could remain clearly illustrates that competition law will
leave unscratched restrictive sporting rules that are deemed inherent and
proportionate to the organisation and proper conduct of sport. It almost makes
you wonder what all the fuss is about when competition law confronts the world
One final note: the contested “SKKF” rule is the
national equivalent of the clause contained in the IFBB Constitution (which forms an
integral part of the SKKF’s statutes). Article 19.4.7 stipulates that:
“Any athlete or
official who participates in a competition or event not approved or sanctioned
by the IFBB, may be fined, suspended or expelled. The amount of the fine as
well as the suspension period will be decided by the IFBB Disciplinary
Commission … Once the suspension has been completed and before participating in
an IFBB competition or event, the athlete must be drug tested at his or her own
Participation in an event or competition includes (but
is not limited to!) competing, guest posing, giving a seminar, lecture or
similar presentation, judging, officiating, allowing the use of one’s name
and/or likeness for promotional purposes, and/or taking part in a non-IFBB
sanctioned competition or event in any other way, shape or form.
To the IFBB and all other European member federations,
who have to the author’s knowledge not decided to no longer enforce or abolish this
 Swedish Competition Authority (Konkurrensverket), 28 May 2014,
Bodybuilding and Fitness Competitions, Decision dnr. 590/2013, http://www.kkv.se/upload/Filer/Konkurrens/2014/13-0590.pdf
 Swedish Competition Authority (Konkurrensverket) 13
May 2011, Swedish Automobile Sports Federation, Decision dnr. 709/2009,
available at http://www.kkv.se/upload/Filer/Konkurrens/2011/Beslut/09-0709.pdf
 Swedish Market Court's ruling 2012:16 in Case A 5/11, Svenska Bilsportförbundet v Konkurrensverket
(December 20, 2012), http://www.kkv.se/t/NewsArchive.aspx?id=529
 The SKKF notified its member athletes and clubs of the changes via its
newsletter and website.
 Case C-41/90 Höfner and Elser 
ECR I-1979, para. 21.
 See e.g. Case C-222/04 Ministero dell'Economia e delle Finanze v Cassa di
Risparmio di Firenze SpA and others  ECR I-289; Case C-475/99 Firma Ambulanz Glöckner v Landkreis Südwestpfalz  ECR I-8089;
Joined Cases 209/78 to 215/78 and 218/78 Van
Landewyck v Commission  ECR 3125; C-244/94 Fédération Française des Sociétés d’Assurances and others v Ministère
de l'Agriculture  ECR I-4013; Joined Cases C-115/97 to C-117/07 Brentjens’ Handelsonderneming BV v Stichting
Bedrijfspensioenfonds voor de Handel in Bouwmaterialen  ECR I-6025.
 See e.g. Joined case C-180/98 to C-184/98 Pavel Pavlov and Others v Stichting Pensioenfonds Medische Specialisten
 ECR I-6451; Case C‑218/00 Cisal 
 Case C-415/93 Union Royale Belge
des Sociétés de Football Association and others v Bosman and others 
ECR I-4921, paras. 79-80