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

International and European Sports Law – Monthly Report – August and September 2019 - By Thomas Terraz

Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

 

The Headlines

Another Russian Doping Crisis? Inconsistencies Uncovered in the Data from the Moscow Lab

Storm clouds are brewing once more in the Russian Doping Saga, after several inconsistencies were uncovered by WADA from data retrieved from the Moscow Laboratory. More specifically, a certain number of positive tests had been removed from the data WADA retrieved from the Moscow Laboratory compared to the one received from the original whistleblower. WADA launched a formal compliance procedure on 23 September, giving three weeks for Russian authorities to respond and provide their explanations. WADA’s Compliance Review Committee is set to meet on 23 October in order to determine whether to recommend declaring Russia non-compliant.

Russian authorities are not the only ones now facing questions in light of these new revelations. Criticism of WADA’s decision to declare Russia compliant back in September 2018 have been reignited by stakeholders. That original decision had been vehemently criticized (see also Edwin Moses’ response), particularly by athlete representative groups.

The fallout of these data discrepancies may be far reaching if Russian authorities are unable to provide a satisfying response. There are already whispers of another impending Olympic Games ban and the possibility of a ban extending to other sports signed to the WADA Code. In the meantime, the IAAF has already confirmed that the Russian Athletes would compete as ‘authorised neutral athletes’ at the World Athletics Championship in Doha, Qatar.

Legal Challenges Ahead to Changes to the FIFA Football Transfer Market

FIFA is set to make amendments to its player transfer market that take aim at setting new boundaries for football agents. These changes will prohibit individuals from representing both the buying and selling club in the same transaction and set new limits on agent commissions (3 percent for the buying club and player representative and 10 percent for the selling team). FIFA is already in the process of creating a central clearinghouse through which all transfer payments would have to pass through, including agent commissions. FIFA will be making a final decision on these proposed changes at the FIFA Council meeting on 24 October.

If these proposed changes are confirmed, they will almost certainly be challenged in court. The British trade organization representing football agents, Association of Football Agents, has already begun its preparations for a costly legal battle by sending a plea to its members for donations. It claims that it had not been properly consulted by FIFA before this decision had been made. On the other hand, FIFA claims that ‘there has been a consultation process with a representative group of agents’ and that FIFA kept ‘an open dialogue with agents’. Regardless, if these proposed changes go through, FIFA will be on course to a looming legal showdown.

CAS Public Hearing in the Sun Yang Case: One Step Forward for Transparency?

On 20 August, 2019, the Court of Arbitration for Sport (CAS) announced that the hearing in the appeal procedure of the Sun Yang case will be held publicly. It will be only the second time in its history that a public hearing has been held (the last one being in 1999, Michelle Smith De Bruin v. FINA). WADA has appealed the original decision of the FINA Doping Panel which had cleared Sun Yang from an alleged anti-doping rule violation. The decision to make the hearing public was at the request of both parties. The hearing is set to take place November 15th and is likely to be an important milestone in improving the CAS’ transparency.

Sun Yang, who has already served a doping ban for a previous violation in 2014, has also been at the center of another controversy, where Mack Horton, an Australian swimmer, refused to shake hands and stand on the podium with Sun Yang at the world championships in Gwangju. More...

ISLJ International Sports Law Conference 2019 - Conference Report - By Thomas Terraz

On October 24th and 25th 2019, the T.M.C. Asser Institute and the International Sports Law Centre hosted the International Sports Law Journal (ISLJ) Conference for a third year in a row, bringing together a group of academics and practitioners from around the world. This year’s conference celebrated the 20th year of the International Sports Law Journal, which was originally started by Robert Siekmann. Over the past 20 years, the ISLJ has aimed to be a truly international journal that addresses global topics in sports law while keeping the highest academic standards.

With this background, the conference facilitated discussions and exchanges over six differently themed panels on international sports law’s most pertinent issues and gave participants wide opportunities to engage with one another. Additionally, this year’s edition also had the great honor of hosting two distinguished keynote speakers, Moya Dodd and Ulrich Haas, who were able to share their wealth of experience and knowledge with the conference participants.

The following report aims to give an overview of the ISLJ Conference 2019 to extract and underline the fundamental ideas raised by the different speakers.More...

Caster Semenya’s Legal Battle Against Gender Stereotypes: On Nature, Law and Identity - By Sofia Balzaretti (University of Fribourg)

Editor's note: Sofia Balzaretti is a Graduate research assistant and a PhD candidate at the University of Fribourg (Switzerland) where she is writing a thesis on the Protection against Gender Stereotypes in International Law. In addition to research in human rights and feminist legal theory, she has also carried out some research in legal philosophy and on the relationship between gender and the law.

 

The International Association of Athletics Federations (IAAF), the monitoring body of track and field athletics, regularly submitted South African middle distance runner and Olympic gold medalist Mokgadi Caster Semenya to sex verification tests when it began questioning her sexual characteristics and speculating whether her body belonged on the Disorder of Sex Development (DSD) spectrum. DSD Syndrome is often defined as an “intersex condition” which affects the clear development of either/or genitalia, gonads and chromosomes into one distinctive sex or another. The spectrum of the intersex condition is particularly wide, and the disorder can sometimes be minimal - some cases of female infertility can actually be explained by an intersex condition.

The IAAF deemed the controversial sex verification tests necessary on the grounds that it was required to prove Semenya did not have a “medical condition” which could give her an “unfair advantage”. It was eventually found that, because of an intersex trait, Semenya did have abnormally high levels of testosterone for a woman, which, in the IAAF’s opinion, justified a need for regulatory hormonal adjustments in order for her to keep competing in the women’s category. The IAAF also funded research to determine how ‘hyperandrogenism’ affects athletic performance. In 2018, it issued Eligibility Regulations on Female Classification (“Athlete with Differences of Sexual Development”) for events from 400m to the mile, including 400m, hurdles races, 800m and 1’500m. The IAAF rules indicated that in case of an existing high level of testosterone, suppression or regulation by chemotherapy, hormonal castration, and/or iatrogenic irradiation was mandatory in order to take part in these events.

Semenya and her lawyers challenged the IAAF Regulations in front of the CAS, who, in a very controversial decision, deemed the Regulations a necessary, reasonable and proportionate mean “of achieving the aim of what is described as the integrity of female athletics and for the upholding of the ‘protected class’ of female athletes in certain events” (§626). More...

International and European Sports Law – Monthly Report – June and July 2019 - By Tomáš Grell

Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

 

The Headlines

The European Court of Justice finds that rule of a sports association excluding nationals of other Member States from domestic amateur athletics championships may be contrary to EU law

On 13 June 2019, the European Court of Justice (ECJ) delivered a preliminary ruling at the request of the Amtsgericht Darmstadt (Local Court Darmstadt, Germany) filed in the course of the proceedings involving Mr Daniele Biffi, an Italian amateur athlete residing in Germany, and his athletics club TopFit based in Berlin, on the one hand, and the German athletics association Deutscher Leichtathletikverband, on the other. The case concerned a rule adopted by the German athletics association under which nationals of other Member States are not allowed to be awarded the title of national champion in senior amateur athletics events as they may only participate in such events outside/without classification. The ECJ’s task was to decide whether or not the rule in question adheres to EU law.

The ECJ took the view that the two justifications for the rule in question put forward by the German athletics association did not appear to be founded on objective considerations and called upon the Amtsgericht Darmstadt to look for other considerations that would pursue a legitimate objective. In its judgment, the ECJ analysed several important legal questions, including amongst others the applicability of EU law to amateur sport or the horizontal applicability of European citizenship rights (for detailed analysis of the judgment, please see our blog written by Thomas Terraz).

Milan not featuring in this season’s edition of Europa League following a settlement with UEFA

On 28 June 2019, the Court of Arbitration for Sport (CAS) rendered a consent award giving effect to a settlement agreement between UEFA and the Milan Football Club, under which the Italian club agreed to serve a one-year ban from participation in UEFA club competitions as a result of its breaches of UEFA’s financial fair play regulations over the 2015/2016/2017 and the 2016/2017/2018 monitoring periods, while the European football’s governing body agreed to set aside previous decisions of the Investigatory and Adjudicatory Chamber of its Club Financial Control Body which had found Milan guilty of the respective breaches.   

This was not the first intervention of the CAS related to Milan’s (non-)compliance with UEFA’s financial fair play regulations. In July 2018, the CAS annulled the decision of the Adjudicatory Chamber of the UEFA Club Financial Control Body of 19 June 2018 which was supposed to lead to the exclusion of the Italian club from UEFA club competitions for which it would otherwise qualify in the next two seasons (i.e. 2018/2019 and 2019/2020 seasons). Following such intervention of the CAS – which concerned the 2015/2016/2017 monitoring period – it may have appeared that Milan would eventually manage to escape a ban from participation in UEFA club competitions for breaches of UEFA’s financial fair play regulations. However, Milan’s case was again referred to the Adjudicatory Chamber of the UEFA Club Financial Control Body in April 2019 – this time its alleged breaches of UEFA’s financial fair play regulations concerned the 2016/2017/2018 monitoring period – and such referral apparently forced Milan into negotiations with UEFA which led to the settlement agreement ratified by the CAS.      

Swiss Federal Tribunal gives Caster Semenya a glimmer of hope at first but then stops her from running at the IAAF World Championships in Doha

Caster Semenya’s legal team brought an appeal to the Swiss Federal Tribunal in late May against the landmark ruling of the CAS which gave the IAAF the green light to apply its highly contentious Eligibility Regulations for Female Classification (Athlete with Difference of Sexual Development) preventing female athletes with naturally elevated levels of testosterone from participating in certain athletic events unless they take medication to supress such levels of testosterone below the threshold of five nmol/L for a continuous period of at least six months. The appeal yielded some positive partial results for Caster Semenya early on as the Swiss Federal Tribunal ordered the IAAF on 3 June 2019 to suspend the implementation of the contested regulations. However, the Swiss Federal Tribunal overturned its decision at the end of July which means that Caster Semenya is no longer able to run medication-free and this will most likely be the case also when the 2019 IAAF World Athletics Championships kick off in Doha in less than one month’s time. The procedural decisions adopted by the Swiss Federal Tribunal thus far have no impact on the merits of Caster Semenya’s appeal.More...

Can a closed league in e-Sports survive EU competition law scrutiny? The case of LEC - By Thomas Terraz

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.


1.     Introduction

The organizational structure of sports in Europe is distinguished by its pyramid structure which is marked by an open promotion and relegation system. A truly closed system, without promotion and relegation, is unknown to Europe, while it is the main structure found in North American professional sports leagues such as the NFL, NBA and the NHL. Recently, top European football clubs along with certain members of UEFA have been debating different possibilities of introducing a more closed league system to European football. Some football clubs have even wielded the threat of forming an elite closed breakaway league. Piercing through these intimidations and rumors, the question of whether a closed league system could even survive the scrutiny of EU competition law remains. It could be argued that an agreement between clubs to create a completely closed league stifles competition and would most likely trigger the application of Article 101 and 102 TFEU.[1] Interestingly, a completely closed league franchise system has already permeated the European continent. As outlined in my previous blog, the League of Legends European Championship (LEC) is a European e-sports competition that has recently rebranded and restructured this year from an open promotion and relegation system to a completely closed franchise league to model its sister competition from North America, the League Championship Series. This case is an enticing opportunity to test how EU competition law could apply to such a competition structure.

As a preliminary note, this blog does not aim to argue whether the LEC is a ‘real’ sport competition and makes the assumption that the LEC could be considered as a sports competition.[2]

More...



Book Review - Football and the Law, Edited by Nick De Marco - By Despina Mavromati (SportLegis/University of Lausanne)

 Editor's Note: Dr. Despina Mavromati, LL.M., M.B.A., FCIArb is an Attorney-at-law specialized in international sports law and arbitration (SportLegis) and a Member of the UEFA Appeals Body. She teaches sports arbitration and sports contracts at the University of Lausanne (Switzerland) and is a former Managing Counsel at the Court of Arbitration for Sport.


This comprehensive book of more than 500 pages with contributions by 53 authors and edited by Nick De Marco QC “aims to embody the main legal principles and procedures that arise in football law”. It is comprised of 29 chapters and includes an index, a table of football regulations and a helpful table of cases including CAS awards, UEFA & FIFA Disciplinary Committee decisions and Football Association, Premier League and Football League decisions. 

The 29 chapters cover a wide range of regulatory and legal issues in football, predominantly from the angle of English law. This is logical since both the editor and the vast majority of contributing authors are practitioners from England.

Apart from being of evident use to anyone involved in English football, the book offers additional basic principles that are likely to be of use also to those involved in football worldwide, including several chapters entirely dedicated to the European and International regulatory framework on football: chapter 3 (on International Federations) gives an overview of the pyramidal structure of football internationally and delineates the scope of jurisdiction among FIFA and the confederations; chapter 4 explains European law and its application on football deals mostly with competition issues and the free movement of workers; and chapter 29 deals with international football-related disputes and the Court of Arbitration for Sport (CAS).

In addition to the chapters exclusively dealing with international football matters, international perspectives and the international regulatory landscape is systematically discussed – in more or less depth, as the need might be – in several other chapters of the book, including: chapter 2 on the “Institutions” (from governing bodies to stakeholders groups in football); chapter 6 on the FIFA Regulations on the Status and Transfer of Players (RSTP); chapter 8 dealing with (national and international) player transfers; chapter 11 (on Third Party Investment) and chapter 16 on Financial Fair Play (mostly discussing the UEFA FFP Regulations); chapter 23  on disciplinary matters (very briefly discussing the disciplinary procedures under FIFA and UEFA Disciplinary rules); chapter 24 on domestic and international doping-related cases in football, with an overview of the CAS jurisprudence in this respect; and finally chapter 23 on corruption and match-fixing (with a very short description of the FIFA and UEFA regulations).

Furthermore, the book offers extensive chapters in less discussed – yet of high importance – football topics, including: chapter 13 on image rights and key clauses in image rights agreements; chapter 14 on taxation (referring also to taxation issues in image rights and intermediary fees); chapter 15 on sponsoring and commercial rights, with a guide on the principal provisions in a football sponsoring contract and various types of disputes arising out of sponsorship rights; chapter 17 on personal injury, discussing the duty of care in football cases (from the U.K.); and chapter 18 on copyright law and broadcasting (with short references to the European law and the freedom to supply football broadcasting services).

Some chapters seem to have a more general approach to the subject matter at issue without necessarily focusing on football. These include chapters 27 (on mediation) and 22 (on privacy and defamation), and even though they were drafted by reputable experts in their fields, I would still like to see chapter 27 discuss in more detail the specific aspects, constraints and potential of mediation in football-related disputes as opposed to a general overview of mediation as a dispute-resolution mechanism. The same goes for chapter 22, but this could be explained by the fact that there are not necessarily numerous football-specific cases that are publicly available. 

As is internationally known, “football law” is male-dominated. This is also demonstrated in the fact that of the 53 contributing authors, all of them good colleagues and most of them renowned in their field, only eight are female (15%). Their opinions, however, are of great importance to the book due to the subject matter on which these women have contributed, such as player contracts (Jane Mulcahy QC), player transfers (Liz Coley), immigration issues in football (Emma Mason), broadcasting (Anita Davies) or disciplinary issues (Alice Bricogne).

The book is a success not only due to the great good work done by its editor, Nick De Marco QC but first and foremost due to its content, masterfully prepared by all 53 authors. On the one hand, the editor carefully delimited and structured the scope of each topic in a logical order and in order to avoid overlaps (a daunting task in case of edited volumes with numerous contributors like this one!), while on the other hand, all 53 authors followed a logical and consistent structure in their chapters and ensured an expert analysis that would have not been possible had this book been authored by one single person.  

Overall, I found this book to be a great initiative and a very useful and comprehensive guide written by some of the most reputable experts. The chapters are drafted in a clear and understandable way and the editor did a great job putting together some of the most relevant and topical legal and regulatory issues from the football field, thus filling a much-needed gap in the “football law” literature.

I’m A Loser Baby, So Let’s Kill Transparency – Recent Changes to the Olympic Games Host City Selection Process - By Ryan Gauthier (Thompson Rivers University)

Editor's Note: Ryan Gauthier is Assistant Professor at Thompson Rivers University in Canada. Ryan’s research addresses the governance of sports organisations, with a particular focus on international sports organisations. His PhD research examined the accountability of the International Olympic Committee for human rights violations caused by the organisation of the Olympic Games.


Big June 2019 for Olympic Hosting

On June 24, 2019, the International Olympic Committee (IOC) selected Milano-Cortina to host the 2026 Winter Olympic Games. Milano-Cortina’s victory came despite a declaration that the bid was “dead” just months prior when the Italian government refused to support the bid. Things looked even more dire for the Italians when 2006 Winter Games host Turin balked at a three-city host proposal. But, when the bid was presented to the members of the IOC Session, it was selected over Stockholm-Åre by 47 votes to 34. 

Just two days later, the IOC killed the host selection process as we know it. The IOC did this by amending two sections of the Olympic Charter in two key ways. First, the IOC amended Rule 33.2, eliminating the requirement that the Games be selected by an election seven years prior to the Games. While an election by the IOC Session is still required, the seven-years-out requirement is gone.

Second, the IOC amended Rule 32.2 to allow for a broader scope of hosts to be selected for the Olympic Games. Prior to the amendment, only cities could host the Games, with the odd event being held in another location. Now, while cities are the hosts “in principle”, the IOC had made it so: “where deemed appropriate, the IOC may elect several cities, or other entities, such as regions, states or countries, as host of the Olympic Games.”

The change to rule 33.2 risks undoing the public host selection process. The prior process included bids (generally publicly available), evaluation committee reports, and other mechanisms to make the bidding process transparent. Now, it is entirely possible that the IOC may pre-select a host, and present just that host to the IOC for an up-or-down vote. This vote may be seven years out from the Games, ten years out, or two years out. More...


International and European Sports Law – Monthly Report – April and May 2019. By Tomáš Grell

Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

 

The Headlines 

Caster Semenya learns that it is not always easy for victims of discrimination to prevail in court

The world of sport held its breath as the Secretary General of the Court of Arbitration for Sport (CAS) Matthieu Reeb stood before the microphones on 1 May 2019 to announce the verdict reached by three arbitrators (one of them dissenting) in the landmark case involving the South African Olympic and world champion Caster Semenya. Somewhat surprisingly, the panel of arbitrators came to the conclusion that the IAAF’s regulations requiring female athletes with differences of sexual development to reduce their natural testosterone level below the limit of 5 nmol/L and maintain that reduced level for a continuous period of at least six months in order to be eligible to compete internationally at events between 400 metres and a mile, were necessary, reasonable and proportionate to attain the legitimate aim of ensuring fair competition in female athletics, even though the panel recognised that the regulations were clearly discriminatory. Ms Semenya’s legal team decided to file an appeal against the ruling at the Swiss Federal Tribunal. For the time being, this appears to be a good move since the tribunal ordered the IAAF at the beginning of June to suspend the application of the challenged regulations to Ms Semenya with immediate effect, which means that Ms Semenya for now continues to run medication-free.

 

Champions League ban looms on Manchester City

On 18 May 2019, Manchester City completed a historic domestic treble after defeating Watford 6-0 in the FA Cup Final. And yet there is a good reason to believe that the club’s executives did not celebrate as much as they would under normal circumstances. This is because only two days before the FA Cup Final the news broke that the chief investigator of the UEFA Club Financial Control Body (CFCB) had decided to refer Manchester City’s case concerning allegations of financial fair play irregularities to the CFCB adjudicatory chamber for a final decision. Thus, the chief investigator most likely found that Manchester City had indeed misled UEFA over the real value of its sponsorship income from the state-owned airline Etihad and other companies based in Abu Dhabi, as the leaked internal emails and other documents published by the German magazine Der Spiegel suggested. The chief investigator is also thought to have recommended that a ban on participation in the Champions League for at least one season be imposed on the English club. The club’s representatives responded to the news with fury and disbelief, insisting that the CFCB investigatory chamber had failed to take into account a comprehensive body of irrefutable evidence it had been provided with. They eventually decided not to wait for the decision of the CFCB adjudicatory chamber, which is yet to be adopted, and meanwhile took the case to the CAS, filing an appeal against the chief investigator’s referral.

 

The Brussels Court of Appeal dismisses Striani’s appeal on jurisdictional grounds

The player agent Daniele Striani failed to convince the Brussels Court of Appeal that it had jurisdiction to entertain his case targeting UEFA’s financial fair play regulations. On 11 April 2019, the respective court dismissed his appeal against the judgment of the first-instance court without pronouncing itself on the question of compatibility of UEFA’s financial fair play regulations with EU law. The court held that it was not competent to hear the case because the link between the regulations and their effect on Mr Striani as a player agent, as well as the link between the regulations and the role of the Royal Belgian Football Association in their adoption and enforcement, was too remote (for a more detailed analysis of the decision, see Antoine’s blog here). The Brussels Court of Appeal thus joined the European Court of Justice and the European Commission as both these institutions had likewise rejected to assess the case on its merits in the past.

 

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A New Chapter for EU Sports Law and European Citizenship Rights? The TopFit Decision - By Thomas Terraz

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

Christmas has come very early this year for the EU sports law world in the form of the Court of Justice of the European Union’s (CJEU) judgment in TopFit eV, Daniele Biffi v Deutscher Leichtathletikverband eV by exclusively analyzing the case on the basis of European citizenship rights and its application to rules of sports governing bodies that limit their exercise. The case concerned an Italian national, Daniele Biffi, who has been residing in Germany for over 15 years and participates in athletic competitions in the senior category, including the German national championships. In 2016, the Deutscher Leichtathletikverband (DLV), the German Athletics Federation, decided to omit a paragraph in its rules that allowed the participation of EU nationals in national championships on the same footing as German citizens. As a result, participation in the national championship was subject to prior authorization of the organizers of the event, and even if participation was granted, the athlete may only compete outside of classification and may not participate in the final heat of the competition. After having been required to compete out of classification for one national championship and even dismissed from participating in another, Mr. Biffi and TopFit, his athletics club based in Berlin, brought proceedings to a German national court. The national court submitted a request for a preliminary ruling to the CJEU in which it asked essentially whether the rules of the DLV, which may preclude or at least require a non-national to compete outside classification and the final heat, are contrary to Articles 18, 21 and 165 TFEU. Articles 18 and 21 TFEU, read together, preclude discrimination on the basis of nationality against European citizens exercising their free movement. The underlying (massive) question here is whether these provisions can be relied on by an amateur athlete against a private body, the DLV.

Covered in a previous blog, the Advocate General’s (AG) opinion addressed the case from an entirely different angle. Instead of tackling the potentially sensitive questions attached with interpreting the scope of European citizenship rights, the opinion focused on the application of the freedom of establishment because the AG found that participation in the national championships was sufficiently connected to the fact Mr. Biffi was a professional trainer who advertised his achievements in those competitions on his website. Thus, according to the AG, there was a sufficient economic factor to review the case under a market freedom. The CJEU, in its decision, sidelined this approach and took the application of European citizenship rights head on.

The following will dissect the Court’s decision by examining the three central legal moves of the ruling: the general applicability of EU law to amateur sport, the horizontal applicability of European citizenship rights, and justifications and proportionality requirements of access restrictions to national competitions. More...

League of Legends European Championships - Challenging the Boundaries of Sport in EU Law - By Thomas Terraz

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.


1.     Introduction

The surge of e-sports has stimulated a lively discussion on the essential characteristics of sport and whether e-sports, in general, can be considered a sport. However, one should not overlook the fact that e-sports encompass a broad range of video games that fundamentally differ from one another. Thus, as one commentator recently underlined, “the position of video games and the e-sport competitions based on them should be analysed on a case-by-case basis.”[1] In this spirit, this blog aims to provide a concise analysis of one of these e-sports, League of Legends (LoL), and one of its main competitions, the League of Legends European Championship (LEC), to assess whether it could be considered a sport in the sense of EU law. The LEC offers a fascinating opportunity to examine this issue especially since the previous European League of Legends Championship Series (EU LCS) was rebranded and restructured this year into the LEC. More...



Asser International Sports Law Blog | The 2014 Dortmund judgment: what potential for a follow-on class action? By Zygimantas Juska

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

The 2014 Dortmund judgment: what potential for a follow-on class action? By Zygimantas Juska

Class actions are among the most powerful legal tools available in the US to enforce competition rules. With more than 75 years of experience, the American system offers valuable lessons about the benefits and drawbacks of class actions for private enforcement in competition law. Once believed of as only a US phenomenon, class actions are slowly becoming reality in the EU. After the adoption of the Directive on damages actions in November 2014, the legislative initiative in collective redress (which could prescribe a form of class actions) is expected in 2017.[1] Some pro-active Member States have already taken steps to introduce class actions in some fashion, like, for example, Germany.

What is a class action? It is a lawsuit that allows many similar legal claims with a common interest to be bundled into a single court action. Class actions facilitate access to justice for potential claimants, strengthen the negotiating power and contribute to the efficient administration of justice. This legal mechanism ensures a possibility to claim cessation of illegal behavior (injunctive relief) or to claim compensation for damage suffered (compensatory relief).   


Class actions in antitrust and the sport sector

Throughout the years, US class actions have become an important tool to strengthen good governance in the sports sector. Due to alleged antitrust infringements, US sports organizations have been hit with a series of class action lawsuits.  The most recent and the most prominent example is the antitrust class action lawsuit O'Bannon v. NCAA. On 8 August 2014, the US District Court ruled in favour of former UCLA basketball player O'Bannon and 19 others, declaring that the National Collegiate Athletic Associations’ (NCAA) longstanding refusal to compensate athletes for the use of their name, image and likenesses (NILs) violates US antitrust laws. Previously, the college sports governing body required student-athletes  to sign ‘Form 08-3a’  in which they authorize the NCAA to use their “name or picture to generally promote NCAA championships or other NCAA events, activities or programs”, without receiving compensation. If the NCAA loses the appeal, it must allow schools to give athletes some of the money they bring in by licensing their NIL. For further discussion on the O’Bannon case, see my previous blog.

In the EU, however, antitrust class actions remain an underrated remedial option in EU competition policy and the sports sector (the same is true for competition law in general). As is well known, sports federations often have practical monopolies within certain markets. In particular, due to the substantial economic revenues of these markets, sports federations have the tendency to abuse their dominant position in contradiction with Article 102 TFEU. It is not unthinkable that the positive experiences with class actions in the US may serve as an inspiration for victims in the EU to go against powerful sports organizations. Here, useful insights may be derived from the German Handball case, which can be used as an example to explore the potential of class actions as a remedy. On 15 May 2014, German Bundesliga teams (30 of them) won the antitrust case against the International Handball Federation (IHF) and the German Handball Federation (DHB) at the regional court of Dortmund (Landgericht). For further discussion on the 2014 Dortmund judgment, see here.  


The 2014 Dortmund judgment: A comparative analysis with the O’Bannon case

The Court in Dortmund held that an obligatory release system of players for activities of their respective national teams without compensation constitutes an abuse of a dominant position prohibited by German competition law (§ 19 Gesetz gegen Wettbewerbsbeschränkungen, GWB) and Article 102 TFEU, while it also breaches the principle of good faith in contractual performance.[2] Until the judgment, German Bundesliga clubs had no other way but to release their players if they were invited to join their national team within the international calendar. According to the IHF Player Eligibility Code, “a club having a foreign player under contract is obliged to release such player to his National Federation if he is called up to take part in activities of that federation's national team” (Article 7.1.2). Furthermore, a club releasing a national player was not entitled to receive any kind of compensation and in the event of personal injury the insurance coverage was not provided (Articles 7.2-7.3). After the judgment, the IHF and the DHB should pay a fair compensation for the time of the release of the player.  

On the one hand, both cases have striking similarities. The judgments concern antitrust infringements by powerful sports federations, the IHF (also the DHB) and the NCAA respectively. Professional clubs / student athletes in both cases are not entitled to compensation due to the rules that have been set by sports organizations. The German case concerns the obligation for professional clubs to release players to national team events without receiving compensation, while the US case concerns the prohibition for student athletes to receive compensation from NIL.

On the other hand, although both cases concern antitrust infringements by the sports organizations, they also have vital differences. Most importantly, the O'Bannon case is an antitrust class action lawsuit filed against the NCAA. This class action proved to be a powerful instrument that managed to jeopardize the long-standing fundamental principle of amateurism on which the whole economic and social system of the NCAA lies. Until now, however, the 2014 Dortmund judgment has been an ordinary litigation according to German law. However, it does share some similarities with O’bannon that may justify a class action in the form of an injunctive relief (at least, in the first instance), subject to some exceptions.  


Indirect class action for an injunction

What is injunctive relief in class action cases? According to the European Commission, the courts should treat claims for injunctive orders requiring cessation of or prohibiting a violation of rights granted under EU law in order to prevent any or further harm causing damages.[3] According to the German law, in case of danger of recurrence, the infringer has to refrain from his conduct.[4] Perhaps surprisingly, the 2014 Dortmund judgment already fulfils the conditions for an indirect class action for an injunction.

First, a group of claimants (a total of 30 Bundesliga clubs) sued the IHF and the DHB before the regional court of Dortmund. They argued (together) that mandatory release of players to the national team constitutes an abuse of a dominant position prohibited by EU and German competition law. The Dortmund court ruled in favour of the handball clubs. It seems that handball clubs only seek the cessation of the unlawful practice, yet they have not claimed the compensatory relief, aimed at obtaining compensation for damage suffered.  

Second, the claim has been initiated by victims of antitrust infringement. Under the GWB, victims are allowed to bring private actions for injunctive relief in 101 and 102 TFEU infringement cases (Sec. 33).

Third, the Forum Club Handball (FCH) financially supported the court case. This may appear as third-party financing since the financial support was provided by a private third party who is not a party to the proceedings.[5] 

Although the handball clubs dropped a quiet collective bombshell, the action cannot be considered as a real class action. Simply, there was no intention to pursue a class action. Another point is that the legal standing to bring the representative action has been limited to a law firm. In Germany, collective antitrust action can be brought by a body, which has a legal standing and to whom the claims of victims of a cartel have been assigned (Sec. 33 (2) GWB). Similarly, under Sec. 8 of the German Unfair Competition Act (UWG), the claims can be sought by: a) competitor; b) qualified entities listed with the Federal Office of Justice or, in case of foreign entities, with the European Commission; and (c) by Chambers of Industry and Commerce or Craft Chambers. For these reasons, the action brought by the clubs cannot be classified as a class action, because they have chosen to be represented by an attorney. It is not unthinkable that eventually the case will appear before the court as a follow-on compensatory class action, if the IHF and the DHB lose the appeal (if necessary, the proceedings before the Court of Justice).   


Compensatory class action: why it could be a big deal?

If the handball clubs achieve an injunction in the final Court decision, the follow-on representative action for damages may be brought against the IHF and the DHB. Some provisions in German law facilitate the incentives to bring damages claims for antitrust infringements. According to Sec. 33(4) GWB, antitrust class actions should be brought after a final decision of a public authority finding there has been a violation of competition law. Furthermore, the 8th Amendment of GWB broadens the scope of the legal standing in such a way that all associations of undertakings that are affected by an infringement, as well as consumer associations, are in principle able to claim the enforcement of German competition law in courts (including by demanding damages). Yet it appears that the UWG provisions are not applicable in this case. Under Sec. 8 available remedies allow to pursue only injunctive relief. Under Sec. 9 damages are claimed by competitors (only). Sec. 10 aims at skimming off profits (paid to the Treasury), but not at compensating victims. Due to the fact that illegal profits go to the Treasury in successful cases, the handball clubs would potentially not be happy with the expected outcome.

If the IHF and the DHB lose the appeal, the handball clubs can to a significant extent rely on the final decision. Considering that an indirect form of collective action has already been pursued by the handball clubs in the first instance, a common consent of the parties involved in the case (the major condition for class action) can be easily achieved. Still, the major concern is to solve the issue of legal standing. An actual example of class action that goes with the grain of the German law and is the Cement Cartel Case, in which 28 damaged companies purchased the cartel-related claim to Cartel Damage Claims group (CDC).[6] It is a Brussels based professional litigation that turns burdensome claims into valuable assets, taking the hassle of quantification and subsequent enforcement. The substantiation of the claim is based on evidence gathered from the cartel proceedings and the damaged companies.  In the context of the German handball case, CDC could commence the acquisition of damages claims from handball clubs and then file the collective antitrust damages action against the IHF and the DHB. This is in line with the Sec. 33 GWB under which CDC has legal standing and to whom the claims under Art. 101 and 102 TFEU have been assigned. An action brought by CDC is attractive to the handball clubs because it would strengthen the negotiating power and would reduce litigation costs, as the claim is led (or even purchased) by CDC.  

If the conditions for the admissibility of class action are fulfilled, the IHF and the DHB should fear potential damages. In particular as a result of the inconsistent application of the Player Eligibility Code, the claimants are in a favourable position. Despite the fact that the Code states that “a club releasing a national player shall not have any claim to compensation”, the IHF agreed to pay compensation to the clubs for the release of their players to the national team during the 2011 and 2013 World Championships. To make matters even worse, the IHF provided insurance for the players’ salaries in case of personal injury (contrary to the Article 7.3.2).[7] This suggests that in principle a compensation and insurance coverage are compatible with the Eligibility Code and thereby the interests of the IHF are not jeopardized. The perceived inconsistency provides more clout to the claimants, suggesting that the harm has already been presumed. If the plaintiffs achieve an injunction in Court, they potentially may claim broad compensation, including other undisputed World Championships[8], the Olympic Games, continental championships as well as the qualification matches and tournaments for these events. However, it is even not the worst potential outcome for the IHF. Indeed, due to the Court of Justice (CJEU) decision in Case C-302/13 flyLAL-Lithuanian Airlines, potentially all handball clubs from EU Member States can claim damages from the IHF, if they are part of the federation. In that case, the Latvian Supreme Court sent a request for a preliminary ruling under Article 267 TFEU, asking whether a Lithuanian court judgment ordering provisional measures in a damages case can be recognized and enforced in Latvia. The CJEU ruled that actions brought by undertakings seeking redress or compensation for damage resulting from alleged infringements of EU competition law, can be qualified as a ‘civil and commercial matter’, within the meaning of Article 1(1) of Regulation No 44/2001, and enforceable in Latvia under the provisions of the said regulation. Thus, the CJEU opened a wealth of opportunities for handball clubs (if the final decision in Germany is successful) to claim damages wherever they are based on the EU’s territory. Given that follow-on damages claims have a high success rate, the winning chances are high. Hence, since the common legal and factual features of each individual claim are observed, the class action would be an effective instrument to obtain redress, also adding to the deterrence goals.


Compensatory class actions: a powerful instrument to ensure better governance in sport (federations)?

If the German handball clubs bring a compensatory class action, it has the potential to become an important precedent for many other sports. One successful case may open a Pandora’s Box that would put a lot of pressure on the sports federations’ regulations.  

By forming the group, claimants (such as handball clubs) are able to bundle individual claims and thus trigger efficiency gains by tackling common legal, factual and economic issues collectively.[9] As such, the defendants can handle the risks attached to private litigation and the probability of winning the case increases since multiple plaintiffs have larger financial means. Therefore, a group of claimants having larger financial means can employ more qualified lawyers and economic experts for antitrust cases. A package of collected claims from victims are easier introduced and defended before the court, meaning that damages are proved with sufficiently high probability and thus the chance of receiving compensation is high. When focussing on sanctions, class actions appear to deter abusive conduct, therefore strengthening good governance in sport. If all victims can sue a sports federation, the group will force the infringer to internalize the negative effects of the damage caused as close as possible to the full-compensation principle that is embedded in the EU reform on private enforcement.[10] Sport entities, knowing that class actions may be used against them and anticipating that the expected cost of the infringement may increase significantly, would think twice before violating the competition rules. The achievement of better governance would solve, or at least diminish, the problem of under-enforcement of EU competition rules in the sports sector. Even if the handball case does not result in an antitrust class action, victims from other sports should pay particular attention to such a fruitful litigation model.



[1] It was adopted Commission Recommendation of 11 June 2013 on common principles for collective redress mechanisms in the Member States for injunctions against and claims on damages caused by violations of EU rights, COM (2013) 3539/3, 11.6.2013 (‘Recommendation’).

[2] German Civil Code, Section 242 (“An obligor has a duty to perform according to the requirements of good faith, taking customary practice into consideration”).

[3] Recommendation COM (2013) 3539/3, sec. 19. In the area of injunctive relief, the European Parliament and the Council have already adopted Directive [2009/22/EC OJ L 110, 1.05.2009]  on injunctions for the protection of consumers' interests

[4] GWB, sec. 33.

[5] Recommendation COM (2013) 3539/3, Sec 14-16.

[6] http://www.carteldamageclaims.com/portfolios/cdc-german-cement-cartel/. On 17 December 2013 the Regional Court of Düsseldorf dismissed the action in its entirety [Case No. 37 O 200/09]. CDC has appealed the judgment to the Higher Regional Court in Düsseldorf.

[7]See http://www.forumclubhandball.com/?p=707 and http://www.forumclubhandball.com/?p=707. The outcome had been reached after the negotiations with the FCH in 2010-2011.

[8] The IHF decided to pay compensation for the release of players to the 2011 and 2013 World Championships.

[9] Z. Juska, ‘Obstacles in European Competition Law Enforcement: A Potential Solution from Collective Redress’ (2014) 7 EJLS, 149.

[10] Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union’ COM (2013) 404 final, 11.6.2013

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