In May 2021, the Court of Justice of the European Union (“CJEU”) published the summary of an appeal filed by the International Skating Union (“ISU”) against a ruling from the General Court (“GC”) which found that ISU rules restricting athletes from taking part in rival events infringed Article 101 TFEU. At the same time, a Spanish judge referred questions to the CJEU for a preliminary ruling concerning the compatibility of UEFA and FIFA regulations with EU competition law, which forced UEFA, the governing body of European football, to suspend disciplinary proceedings against members of the recent European Super League (“ESL”) that have not yet abandoned the project (i.e., Juventus, Barcelona and Real Madrid). This note briefly analyzes how the CJEU’s ruling on the ISU case could frame the response to the reference from the Spanish court.
ISU factual background and the GC judgement
In 2017, the European Commission (“Commission”) found that ISU’s eligibility rules were incompatible with Article 101 TFEU. By way of background, ISU is the international sports federation for figure skating and speed skating, and undertakes the commercial organization of speed skating events and competitions. ISU’s statutes had created a pre-authorization system for skating events, including so-called eligibility rules for professional ice skaters, according to which any skater participating in an unauthorized competition would face a long-term suspension (up to a lifetime ban) from subsequent ISU competitions. The Commission found these eligibility rules to be “by object” restrictions of competition that restricted the ability of professional skaters to participate freely in international events organized by third parties.
In December 2020, the GC confirmed the Commission’s findings. Importantly, the GC recognized the unique role of sporting bodies in ensuring common standards for sporting events by means of pre-authorization systems seeking to secure the integrity of sports (by e.g., aiming to prevent betting manipulation).
Parallels with the European Super League.
However, the GC in ISU noted that these pre-authorization systems need to have fair and proportionate rules, which do not unduly deprive third-party organizers from market access. The need for fair and proportionate rules is magnified when a sporting body is not only providing the regulatory framework, but also commercially benefiting from the organization of related sporting events. In the case at hand, while ISU’s eligibility rules pursued the legitimate objective of protecting the sports’ integrity, they went beyond what was necessary to achieve this purpose, such that they were not proportionate.
This may well suggest that the upcoming ISU appeal might provide some guidance to UEFA, both in the context of the Spanish reference and more broadly in two key areas:
- Scope of “legitimate objectives”. While the prevention of betting manipulation (ISU) and the imposition of sanctions for violation of anti-doping rules (Meca Medina) clearly aim to protect the integrity of sports, the UEFA disciplinary proceedings against ESL clubs include an accusation that the ESL denied the pyramid structure of professional football by severely curtailing promotion and relegation opportunities for clubs. UEFA has also taken the position that the ESL would distort the Champions League’s commercial model that re-distributes income generated at élite level to achieve a certain degree of vertical solidarity. It will be interesting to see how the CJEU views these rules in the context of football’s “integrity”.
- Proportionality of disciplinary measures. In the ISU judgement, the GC seems to have followed a confusing logic (as alleged also in Part 3 of ISU’s pleadings in its appeal to the CJEU). First, the GC accepts that ISU’s pre-authorization system and eligibility rules serve the pro-competitive aim of securing ice skating’s integrity. It also concludes that the threat of a lifetime ban for professional athletes who participate in unauthorized competitions is clearly disproportionate, though leading it to find that, because the possibility of a lifetime ban goes beyond what is necessary to attain a legitimate objective, the pre-authorization system itself is necessarily a restriction by object. The CJEU now has the opportunity to reflect on the distinction between “by object” restrictions and ancillary restraints in a pro-competitive agreement, which should be reviewed for proportionality.
UEFA has indicated that any player who participates in the ESL would not be able to compete in other European and international football competitions, and has threatened to expel members of the ESL from national football competitions. UEFA has also reached a “settlement” with the nine clubs that have withdrawn from the ESL, (i) imposing a 5% reduction in revenues on the clubs; (ii) requiring a EUR 15 million contribution to UEFA’s Solidarity Fund; (iii) requiring the dissolution of the project; and (iv) imposing a future non-compete obligation with a potential penalty of EUR 100 million for breach. That settlement, together with the other threatened sanctions, was the subject of another Spanish judgment on 1 July.
The CJEU’s guidance on proportionality will clearly be of relevance to UEFA. Given the 1 July judgment that prohibits UEFA from taking disciplinary action against ESL members and annuls fines “concealed” in the “settlement”, the CJEU’s view regarding whether a sports body has the right to impose sanctions and, if so, within which boundaries, will be important.