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 aftermath of the Pechstein ruling: Can the Swiss Federal Tribunal save CAS arbitration? By Thalia Diathesopoulou

It took only days for the de facto immunity of the Court of Arbitration for Sport (CAS) awards from State court interference to collapse like a house of cards on the grounds of the public policy exception mandated under Article V(2)(b) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards . On 15 January 2015, the Munich Court of Appeals signalled an unprecedented turn in the longstanding legal dispute between the German speed skater, Claudia Pechstein, and the International Skating Union (ISU). It refused to recognise a CAS arbitral award, confirming the validity of a doping ban, on the grounds that it violated a core principle of German cartel law which forms part of the German public policy. A few weeks before, namely on 30 December 2014, the Court of Appeal of Bremen held a CAS award, which ordered the German Club, SV Wilhelmshaven, to pay ‘training compensation’, unenforceable for non-compliance with mandatory European Union law and, thereby, for violation of German ordre public. More...

‘The reform of football': Yes, but how? By Marco van der Harst

'Can't fight corruption with con tricks
They use the law to commit crime
And I dread, dread to think what the future will bring
When we're living in gangster time'
The Specials - Gangsters


The pressing need for change 

The Parliamentary Assembly (PACE) of the Council of Europe (CoE), which is composed of 318 MPs chosen from the national parliaments of the 47 CoE member states, unanimously adopted a report entitled ‘the reform of football’ on January 27, 2015. A draft resolution on the report will be debated during the PACE April 2015 session and, interestingly, (only?) FIFA’s president Sepp Blatter has been sent an invitation

The PACE report highlights the pressing need of reforming the governance of football by FIFA and UEFA respectively. Accordingly, the report contains some interesting recommendations to improve FIFA’s (e.g., Qatargate[1]) and UEFA’s governance (e.g., gender representation). Unfortunately, it remains unclear how the report’s recommendations will actually be implemented and enforced. 

The report is a welcomed secondary effect of the recent Qatargate directly involving former FIFA officials such as Jack Warner, Chuck Blazer, and Mohamed Bin Hammam[2] and highlighting the dramatic failures of FIFA’s governance in putting its house in order. Thus, it is undeniably time to correct the governance of football by FIFA and its confederate member UEFA – nolens volens. The real question is how to do it.



            Photograph: Fabrice Coffrini/AFP/Getty Images                   Photograph: Octav Ganea/AP

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SV Wilhelmshaven: a Rebel with a cause! Challenging the compatibility of FIFA’s training compensation system with EU law

Due to the legitimate excitement over the recent Pechstein ruling, many have overlooked a previous German decision rendered in the Wilhelmshaven SV case (the German press did report on the decision here and here). The few academic commentaries (see here and here) focused on the fact that the German Court had not recognized the res judicata effect of a CAS award. Thus, it placed Germany at the spearhead of a mounting rebellion against the legitimacy of the CAS and the validity of its awards. None of the commentators weighed in on the substance of the decision, however. Contrary to the Court in Pechstein, the judges decided to evaluate the compatibility of the FIFA rules on training compensations with the EU free movement rights. To properly report on the decision and assess the threat it may constitute for the FIFA training compensation system, we will first summarize the facts of the case (I), briefly explicate the mode of functioning of the FIFA training compensation system (II), and finally reconstruct the reasoning of the Court on the compatibility of the FIFA rules with EU law (III).More...

In Egypt, Broadcasting Football is a Question of Sovereignty … for Now! By Tarek Badawy, Inji Fathalla, and Nadim Magdy

On 15 April 2014, the Cairo Economic Court (the “Court") issued a seminal judgment declaring the broadcasting of a football match a sovereign act of State.[1]


Background

In Al-Jazeera v. the Minister of Culture, Minister of Information, and the Chairman of the Board of Directors of the Radio and Television Union, a case registered under 819/5JY, the Al-Jazeera TV Network (the “Plaintiff” or “Al-Jazeera”) sued the Egyptian Radio and Television Union (“ERTU” or the “Union”) et al. (collectively, the “Respondents”) seeking compensation for material and moral damages amounting to three (3) million USD, in addition to interest, for their alleged breach of the Plaintiff’s exclusive right to broadcast a World Cup-qualification match in Egypt.  Al-Jazeera obtained such exclusive right through an agreement it signed with Sportfive, a sports marketing company that had acquired the right to broadcast Confederation of African Football (“CAF”) World Cup-qualification matches.

ERTU reportedly broadcasted the much-anticipated match between Egypt and Ghana live on 15 October 2013 without obtaining Al-Jazeera’s written approval, in violation of the Plaintiff’s intellectual property rights.

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Why the European Commission will not star in the Spanish TV rights Telenovela. By Ben Van Rompuy and Oskar van Maren

The selling of media rights is currently a hot topic in European football. Last week, the English Premier League cashed in around 7 billion Euros for the sale of its live domestic media rights (2016 to 2019) – once again a 70 percent increase in comparison to the previous tender. This means that even the bottom club in the Premier League will receive approximately €130 million while the champions can expect well over €200 million per season.

The Premier League’s new deal has already led the President of the Spanish National Professional Football League (LNFP), Javier Tebas, to express his concerns that this could see La Liga lose its position as one of Europe’s leading leagues. He reiterated that establishing a centralised sales model in Spain is of utmost importance, if not long overdue.

Concrete plans to reintroduce a system of joint selling for the media rights of the Primera División, Segunda División A, and la Copa del Rey by means of a Royal Decree were already announced two years ago. The road has surely been long and bumpy. The draft Decree is finally on the table, but now it misses political approval. All the parties involved are blaming each other for the current failure: the LNFP blames the Sport Governmental Council for Sport (CSD) for not taking the lead; the Spanish Football Federation (RFEF) is arguing that the Federation and non-professional football entities should receive more money and that it should have a stronger say in the matter in accordance with the FIFA Statutes;  and there are widespread rumours that the two big earners, Real Madrid and FC Barcelona, are actively lobbying to prevent the Royal Decree of actually being adopted.

To keep the soap opera drama flowing,  on 30 December 2014, FASFE (an organisation consisting of groups of fans, club members, and minority shareholders of several Spanish professional football clubs) and the International Soccer Centre (a movement that aims to obtain more balanced and transparent football and basketball competitions in Spain) filed an antitrust complaint with the European Commission against the LNFP. They argue that the current system of individual selling of LNFP media rights, with unequal shares of revenue widening the gap between clubs, violates EU competition law.


Source:http://www.gopixpic.com/600/buscar%C3%A1n-el-amor-verdadero-nueva-novela-de-televisa/http:%7C%7Cassets*zocalo*com*mx%7Cuploads%7Carticles%7C5%7C134666912427*jpg/

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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).  More...

The Pechstein ruling of the OLG München - A Rough Translation

The Pechstein decision of the Oberlandesgericht of Munich is “ground-breaking”, “earth-shaking”, “revolutionary”, name it. It was the outmost duty of a “German-reading” sports lawyer to translate it as fast as possible in order to make it available for the sports law community at large (Disclaimer: This is not an official translation and I am no certified legal translator). Below you will find the rough translation of the ruling (the full German text is available here), it is omitting solely the parts, which are of no direct interest to international sports law.

The future of CAS is in the balance and this ruling should trigger some serious rethinking of the institutional set-up that underpins it. As you will see, the ruling is not destructive, the Court is rather favourable to the function of CAS in the sporting context, but it requires a fundamental institutional reshuffling. It also offers a fruitful legal strategy to challenge CAS awards that could be used in front of any national court of the EU as it is based on reasoning analogically applicable to article 102 TFEU (on abuse of a dominant position), which is valid across the EU’s territory.

Enjoy the read! 

Antoine

PS: The translation can also be downloaded at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2561297

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From Veerpalu to Lalluka: ‘one step forward, two steps back’ for CAS in dealing with Human Growth Hormone tests (by Thalia Diathesopoulou)

In autumn 2011, the Finnish cross-country skier Juha Lalluka, known as a “lone-wolf” because of his training habit, showed an adverse analytical finding with regard to human growth hormone (hGH). The timing was ideal. As the FINADA Supervisory Body in view of the A and B positive samples initiated disciplinary proceedings against Lalluka for violation of anti-doping rules, the Veerpalu case was pending before the CAS. At the athlete’s request, the Supervisory Board postponed the proceedings until the CAS rendered the award in the Veerpalu case. Indeed, on 25 March 2013, the CAS shook the anti-doping order: it cleared Andrus Veerpalu of an anti-doping rule violation for recombinant hGH (rhGH) on the grounds that the decision limits set by WADA to define the ratio beyond which the laboratories should report the presence of rhGH had not proven scientifically reliable.

The Veerpalu precedent has become a rallying flag for athletes suspected of use of hGH and confirmed some concerns raised about the application of the hGH test. Not surprisingly, Sinkewitz and Lallukka followed the road that Veerpalu paved and sought to overturn their doping ban by alleging the scientific unreliability of the hGH decisions limits. Without success, however. With the full text of the CAS award on the Lallukka case released a few weeks ago[1] and the new rules of the 2015 WADA Code coming into force, we grasp the opportunity to outline the ambiguous approach of CAS on the validity of the hGH test. In short: Should the Veerpalu case and its claim that doping sanctions should rely on scientifically well founded assessments be considered as a fundamental precedent or as a mere exception? More...

State Aid and Sport: does anyone really care about rugby? By Beverley Williamson

There has been a lot of Commission interest in potential state aid to professional football clubs in various Member States.  The huge sums of money involved are arguably an important factor in this interest and conversely, is perhaps the reason why state aid in rugby union is not such a concern. But whilst the sums of money may pale into comparison to those of professional football, the implications for the sport are potentially no less serious.

At the end of the 2012/2013 season, Biarritz Olympique (Biarritz) were relegated from the elite of French Rugby Union, the Top 14 to the Pro D2.  By the skin of their teeth, and as a result of an injection of cash from the local council (which amounted to 400,000€), they were spared administrative relegation to the amateur league below, the Fédérale 1, which would have occurred as a result of the financial state of the club.More...

State aid in Croatia and the Dinamo Zagreb case

Introduction

The year 2015 promises to be crucial, and possibly revolutionary, for State aid in football. The European Commission is taking its time in concluding its formal investigations into alleged State aid granted to five Dutch clubs and several Spanish clubs, including Valencia CF and Real Madrid, but the final decisions are due for 2015.

A few months ago, the Commission also received a set of fresh State aid complaints originating from the EU’s newest Member State Croatia. The complaints were launched by a group of minority shareholders of the Croatian football club Hajduk Split, who call themselves Naš Hajduk. According to Naš Hajduk, Hajduk Split’s eternal rival, GNK Dinamo Zagreb, has received more than 30 million Euros in unlawful aid by the city of Zagreb since 2006.More...

Asser International Sports Law Blog | Is FIFA fixing the prices of intermediaries? An EU competition law analysis - By Georgi Antonov (ASSER Institute)

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

Is FIFA fixing the prices of intermediaries? An EU competition law analysis - By Georgi Antonov (ASSER Institute)

Introduction

On 1 April 2015, the new FIFA Regulations on Working with Intermediaries (hereinafter referred as the Regulations) came into force. These Regulations introduced a number of changes as regards the division of competences between FIFA and its members, the national associations. A particularly interesting issue from an EU competition law perspective is the amended Article 7 of the Regulations. Under paragraph 3, which regulates the rules on payments to intermediaries (also previously referred to as ‘agents’), it is recommended that the total amount of remuneration per transaction due to intermediaries either being engaged to act on a player’s or club’s behalf should not exceed 3% of the player’s basic gross income for the entire duration of the relevant employment contract. In the case of transactions due to intermediaries who have been engaged to act on a club’s behalf in order to conclude a transfer agreement, the total amount of remuneration is recommended to not exceed 3% of the eventual transfer fee paid in relation to the relevant transfer of the player.

In other words, the new Regulations recommend a benchmark cap on the percentage of remuneration that an intermediary engaged in negotiations with a view to concluding an employment contract or a transfer agreement can receive for his/her service. From the perspective of an antitrust lawyer such a provision immediately rings a bell of a potential distortion of competition. The Association of Football Agents (AFA), the representative body of 500 football agents in England, contends in a complaint to the European Commission that Article 7(3) of the Regulations distorts competition under EU law. In this regard, the present blog post will analyse whether Article 7(3) of the Regulations infringes Article 101 of the Treaty on the Functioning of the European Union (TFEU). If so, what would be the possible justifications and which are the requirements that must be fulfilled in the case at hand.

The general rule

To begin with, Article 101(1) of the TFEU stipulates that the following shall be prohibited: “all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of completion within the internal market”.[1] Thus, in order to find an infringement of Article 101(1), it must be established that 1) the FIFA Regulations constitute a decision by an association of undertakings; 2) that Article 7(3) of the Regulations may affect trade between EU Member States; and 3) that Article 7(3) of the Regulations has as its object or effect the prevention, restriction or distortion of competition within the internal market.

Decision by an association of undertakings

Even though, the concept of ‘decision by an association of undertakings’ is not defined in the founding treaties of the European Union, this notion has been interpreted broadly by the Court of Justice of the European Union (CJEU).[2] In order to determine whether the FIFA Regulations are to be regarded as a decision of an association of undertakings within the meaning of Article 101(1) TFEU it has to be established that the members of FIFA are undertakings for the purpose of EU competition law and that FIFA constitutes an association of undertakings. In Piau it was settled that “…it is common ground that FIFA’s members are national associations, which are groupings of football clubs for which the practice of football is an economic activity. These football clubs are therefore undertakings within the meaning of Article 81 EC and the national associations grouping them together are associations of undertakings… ”.[3] Therefore, from the judgement of the Court of First Instance (now the General Court) it is plain that FIFA constitutes an association of undertakings within the meaning of Article 101(1) TFEU. As regards the concept of ‘decision’, the General Court declared that since players’ agents receive a fee on a regular basis for the provision of their service, this constitutes an economic activity which does not fall within the scope of the specific nature of sport as defined by the previous CJEU’s case-law.[4] Moreover, the Regulations adopted by FIFA are binding  on national associations members of FIFA and on clubs, players and their agents and thus those regulations constitute a decision by an association of undertakings within the meaning of Article 101(1) TFEU.[5] In addition, in a recent case, the CJEU adjudged that even a price recommendation, regardless of its exact legal status, may be regarded as constituting such a decision.[6] Therefore, from the abovementioned it follows that based on the proximity of the legal issues discussed in Piau and the main research question at hand, it is likely that the new FIFA Regulations will be deemed a decision by an association of undertakings for the purpose of Article 101(1) TFEU.

Effect on trade between Member States

According to the Commission guidelines on the effect on trade, it is the agreement or decision that must be capable of affecting trade between Member States. It implies that there must be an impact on cross-border economic activity and that it must be possible to foresee with a sufficient degree of probability that the decision may have direct or indirect, actual or potential influence on trade between EU countries.[7] Since the Regulations at hand bind all members of FIFA, including all 28 EU Member States, and concern intermediaries operating in every EU country, there is undoubtedly a potential effect on trade between Member States. As a result of the provisions under Article 7(3) of the Regulations on Working with Intermediaries, every football player or club’s agent in the EU will be potentially restricted to receive a remuneration under the specified recommended price cap. Therefore, the second condition under Article 101(1) TFEU is also fulfilled.

Object or effect the prevention, restriction or distortion of competition

Article 101(1) (a) TFEU lists “…directly or indirectly fix purchase or selling prices…” as an object by an agreement that constitutes a restriction on competition.[8] Further, the Commission has continuously interpreted recommended pricing as falling under the category of price fixing in the sense of Article 101.[9] In this line of reasoning, the CJEU stated that in order to establish that a recommendation constitutes price-fixing, account must be taken of three factors: 1) the common interest between the members of the association, 2) the nature of the recommendation and 3) the statutes of the association.[10] The same test was later applied also by the Commission in its Fenex Decision.[11] Furthermore, in its Guidelines on the applicability of Article 101 to horizontal co-operation agreements, the Commission has acknowledged that any standard terms containing provisions which influence the prices charged to customers, including recommended prices, would constitute a restriction of competition by object. The General Court has also confirmed that recommended rates may constitute indirectly a pricing system binding its members.[12] Therefore, Article 101(1) (a) TFEU has been interpreted by the Commission and the CJEU as capable of encompassing “recommended prices” under the scope of “price-fixing”.

As regards the content of Article 7(3) of the Regulations, it clearly recommends a 3% benchmark cap on the remuneration an intermediary may claim as a result of his/her service. Firstly, even though the provision recommends the percentage cap, the national football associations are bound to implement the Regulations at the national level and the decision of whether to impose the remuneration cap is ultimately determined by the football clubs and the players.[13] By being able to limit the percentage of the commission that an intermediary can receive for a certain transaction, the relevant participating clubs and football players will have the common interest to secure a bigger ‘piece of the pie’ for themselves. Secondly, the nature of the recommended cap, even though non-binding, is detailed, clear and specific. It also appears in a binding legislative document, which national associations are required to fully implement. Nonetheless, even if they decide not to apply the recommended price cap, clubs and players will still be inevitably influenced by such a recommendation in their business activities.[14] Therefore, indirectly the nature of Article 7(3) encourages national associations to follow the recommended limit on agents’ remuneration. Lastly, the statutes of FIFA (Articles 2, 5, 10 and 13), give the Association the competence to draw up regulations and ensure their enforcement, regulate the transfer of players and oblige its members to fully comply with its regulations. As a consequence, even though the remuneration cap is a recommendation by FIFA it is highly likely that de facto this provision will lead to a coordinated behaviour among clubs and players as regards limiting the maximum payment that an intermediary can receive.

Typically, agents receive between 5-10% of their player’s gross income, so the limit of 3%, if enforced, would be a serious damaging shift for agents from a financial perspective as well.[15] Moreover, Article 7(3) of the Regulations constitutes a measure that could also be detrimental to the players and the quality of service that they receive. Due to the price cap, intermediaries will be discouraged to compete and improve. The goal of players’ having experienced and professional agents, who provide a high quality of services, is to assist and guide athletes in achieving the best possible deal in usually considered short careers.[16] As a result, the benchmark cap enshrined in Article 7(3) has the object of distorting competition on the market of football intermediaries’ services by both limiting the amount of remuneration and by indirectly decreasing the quality of the provided services.

At national level, not only the AFA in the UK has contested the Regulations, but also recently, after a complaint lodged by Rogon Sport Management, the German District Court (Landgericht Frankfurt/Main) suspended the implementation of the national regulation adopted by the German Football Association (DFB) transposing the FIFA’s Regulations. The District Court ruled that the limit on agents’ commissions in player transfers constitutes and unlawful restriction on the right to provide services even though DFB was following the recommendations stipulated by FIFA.

In the alternative, even if a restriction by object cannot be established, Article 7(3) still has the effect of distorting competition under Article 101(1). The criteria establishing whether a decision by an association is restrictive by its effect include defining the relevant market and assessing the possibility to access it, while taking into account existing and new competitors.[17] It must also be appraised whether the decision restricts actual or potential competition that would have existed in its absence.[18] Concerning the present discussion, Article 7(3) of the Regulations applies on the market of football intermediaries’ services in the EU. There will be undoubtedly an effect on the behaviour of existing intermediaries since normally their remuneration has been 5-10% and now it will be capped to 3%. This amendment could have the possible effect of lowering the level of competition on the market, decreasing the quality of the provided services and possibly driving some intermediaries out of business. In the absence of the decision at hand, these effect on competition would be significantly less likely to occur. As a consequence, the decision of FIFA to recommend a restriction on the remuneration of football intermediaries will have the effect of distorting competition.

Therefore, from the abovementioned analysis it follows that the recommended remuneration cap of 3% falls under the scope of Article 101(1) TFEU and constitute a decision by an association which has effect on trade between Member States and which restricts competition within the internal market.

Possible Justification

Although, a restriction within the meaning of Article 101 has been established, it remains to be analysed whether such a restriction may be justified. In Wouters, the CJEU held that not every decision of an association of undertakings which restricts the freedom of action of the parties necessarily falls within Article 101(1).[19] In order to apply this provision, account has to be taken of the overall context in which the decision was taken, its objectives. Subsequently, it has to be considered whether the consequential restrictive effects are inherent in the pursuit of those objectives.[20] In that context, it is important to verify whether the restrictions of competition are limited to what is necessary to ensure the implementation of legitimate objectives.[21] In other words, for a restriction to be justified, there must be a legitimate reason and the restrictive measure has to be necessary and proportionate for the achievement of the legitimate aim.

In Piau, the Regulation of Agents was justified as it aimed “to raise the professional and ethical standards for the occupation of players’ agent in order to protect players, who have a short career”.[22] In this case, the General Court ruled that the Commission did not err in its assessment by deciding that the licence system in place, which imposes qualitative rather than quantitative restrictions, seeks to protect players and clubs and takes into consideration the risks incurred by players in the event of poorly negotiated transfers.[23] Moreover, according to FIFA, the European Commission, EPFL and FIFPro, it is indisputable that the aim of the new Regulations is to enhance financial transparency related to players’ transfers and the protection of minor players. In this regard, even though the Commission or the CJEU has not yet decided upon the legitimacy of Article 7(3), it can be fairly assumed that the percentage cap, aiming to protect the exploitation of football players through enhanced financial transparency, can be considered as a legitimate aim.

Nevertheless, contrary to Piau, which concerned the licensing procedure of an agent, the present Article 7 stipulates a qualitative criterion rather a quantitative one. Furthermore, it is dubious whether such a recommended benchmark is suitable for achieving the legitimate aim of protecting football players. According to some commentators, it is foreseeable that the remuneration cap will lead to underhand, illegal payments so that intermediaries can maintain the level of compensation that they receive. As a result, intermediaries will further the very problem that FIFA intends to resolve by behaving in a manner that completely negates the primary purpose of the regulations. It can thus, lead to agents looking for new inventive ways to secure payment, for instance through higher percentage for work carried out in relation to the player’s commercial rights or signing longer representation contracts, which in turn  can also result in exploiting players. Some other negative effects may be the emergence of more persons involved in player transfers (lawyers, accountants or financial advisors), leading to less legal certainty and more disputes over the question who is liable for a certain transaction. Furthermore, a protection of minor players (Article 7) and ensuring financial transparency (Article 6) are already regulated in other provisions of the Regulations and thus a 3% cap seems to be redundant limitation towards the achievement of those goals.

Instead, other less restrictive possibilities for attaining the protection of football players are available. As proposed by AFA, a model of self-regulation and accreditation of intermediaries can be set up in co-operation with the national football associations.[24] By such a system, clubs and players could ensure themselves that an intermediary is of a particular standard, even though they would have the freedom to conclude a contract with those agents who do not fulfil a binding accreditation standard.[25] Such a system will not only be more preferred than the current FIFA’s Regulations but it will also be compatible with EU competition rules.[26] Other commentators consider that a more efficient option would be for FIFA not to cap agent fees but rather to strengthen existing ‘fit and proper’ enforcement measures to ensure global compliance with those standards. In this way, the fear expressed by FIFPro that “unnecessarily large amount of money disappears from professional football through agents” will be countered by stricter enforcement measures without restricting competition on the market. Another option for FIFA to avoid anti-competitive effects is for example, the publication of historical or survey-based price information by independent parties. Such regular publications might provide more trustworthy price guides reflecting the dynamics of the relevant market, enhance price transparency and at the same time avoid distortion of competition.

In any event, the measure in question appears to go beyond what is necessary. Typically agents receive between 5-10% of the player’s gross income and thus, a 3% recommended cap is seriously damaging the financial interests of intermediaries. Here, it ought to be mentioned that during the consultation process at FIFA’s Executive Committee, which led to the approval of the Regulations, all relevant stakeholders were present (member associations, clubs, FIFPro, professional football leagues, etc.) with the exception of any intermediaries’ representatives. Subsequently, the interests of agents were neglected during the discussion and the outcome was a stronger bargaining power granted to clubs and players in relation to transfers’ negotiations. This imbalance might lead to an asymmetry of information between agents and players and thus, to a distortion of the market. Further, not only is the content of Article 7(3) too strict but it is also too general and broad, encompassing all intermediaries and not foreseeing any exceptional circumstances. There is also no procedure in place, which allows agents to prove their qualifications and loyalty. As a result, even though an intermediary must have an impeccable reputation and is not allowed to charge minor football players, he/she is still presumed to be abusing his/hers powers and there is no mechanism allowing an intermediary to rebut this presumption.

Since, Article 7(3) of the Regulations does not satisfy the broad criteria for justification in Wouters and API, it is highly unlikely that it will pass through the narrow efficiencies test laid down in Article 101(3) TFEU. Hence, this assessment will not be analysed in this blog post.

Therefore, regardless of the fact that Article 7(3) of the Regulations serves a legitimate aim, it is dubious whether this particular measure is suitable for the achievement of the said goal and it is apparent that its restrictive effects go beyond what is necessary.

Conclusion

In this post, the potential negative effects of Article 7(3) of the FIFA Regulations on Working with Intermediaries on EU competition law were considered. It was concluded that pursuant to the Piau case and the Commission’s decisional practice, such a recommendation constitutes a decision of an association of undertakings which is capable of distorting competition within the meaning of Article 101(1). Next, it was analysed whether the legitimate reason of preventing the abusive practices of players’ exploitation can justify the restriction on competition. The author’s view is that a 3% cap on the commission granted to agents is not the most appropriate measure to do so and thus it constitutes a disproportionate restriction on EU competition rules.



[1] Consolidated version of the Treaty on the Functioning of the European Union (2012) OJ C326/01 art 101.

[2] Case C-309/99 Wouters and Others [2002] ECR I-1577 para 64; Case C-35/96 Commission v Italy [1998] ECR I-3851 para 60; A recommendation by an Association can also constitute a decision, see Case C 96-82 IAZ v Commission [1983] ECR 3369 paras 20-21.

[3] Case T-193/02 Piau v Commission [2005] ECR II-0209 para 69.

[4] Ibid, para 73.

[5] Case T-193/02 Piau v Commission [2005] ECR II-0209 para 75. See also Case C-45/85 Verband der Sachversicherer v Commission [1987] ECR 405 paras 29-32 and Case C-309/99 Wouters [2002] ECR I-1577 para 71.

[6] Case C-136/12 Consiglio nazionale dei geologi v Autorità garante della concorrenza e del mercato (ECJ 18 July 2013) para 46; See also Case C-45/85 Verband der Sachversicherer v Commission [1987] ECR 405 para 32.

[7] Ibid, paras 19-24.

[8] Consolidated version of the Treaty on the Functioning of the European Union (2012) OJ C326/01 art 101(1) (a).

[9] Belgian Architects’ Association [2005] OJ L4/10 paras 3 and 4; Case COMP/37.975 PO/Yamaha [2003] para 141; See also, a tariff recommendation issued by an Association of undertakings was considered to be anticompetitive in Fenex [1996] OJ L181/28 para 74.

[10] Case C-45/85 Verband der Sachversicherer v Commission [1987] ECR 405 paras 29-31.

[11] Fenex [1996] OJ L181/28 para 47.

[12] Joined Cases T-213/95 & T-18/96 Stichting Certificatie Kraanverhuurbedrijf (SCK) and Federatie van Nederlandse Kraanbedrijven (FNK) v Commission [1997] ECR II-1739 paras 159 and 161-164.

[13] See the text of Article 7 of the Regulations.

[14] See Fenex [1996] OJ L181/28 para 73.

[15] UEFA ‘Club Licensing Benchmarking Report 2012’ < http://www.uefa.org/MultimediaFiles/Download/Tech/uefaorg/General/02/09/18/26/2091826_DOWNLOAD.pdf> page 54.

[16] Case T-193/02 Piau v Commission [2005] ECR II-0209 para 102.

[17] Case C-234/89 Delimitis [1991] ECR I-0935 paras 14, 16 and 18.

[18] Ibid, para 19 and 21.

[19] Case C-309/99 Wouters and Others [2002] ECR I-1577 para 97.

[20] Ibid.

[21] Joined Cases C-184 to 187, 194, 195 & 208/13 API (CJEU 4 September 2014) para 48; Case C-519/04 P Meca-Medina [2006] ECR I-6991 para 47 and Case C-136/12 Consiglio nazionale dei geologi v Autorità garante della concorrenza e del mercato (ECJ 18 July 2013) para 54.

[22] Case T-193/02 Piau v Commission [2005] ECR II-0209 para 102.

[23] Ibid, para 100.

[24] Nick De Marco, ‘The New FA Football Intermediaries Regulations and the Disputes Likely to Arise’ (Blackstone Chambers, 27 April 2015) pages 13-14.

[25] Ibid.

[26] Ibid.

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