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On 21 December 2023, the Grand Chamber of the European Court of Justice (‘ECJ’) unveiled a hat-trick of judgments, each with significance for the world of sports governance and international competitions. Handing down decisions in the cases of the European Super League (‘ESL’) (C-333/21), the International Skating Union (‘ISU’) (C-124/21 P), and Royal Antwerp Football Club (C-680/21), the ECJ declared that certain regulations set by sports governing bodies ran afoul of European Union (‘EU’) competition law, solidifying the notion that, while sports may benefit from certain exceptions, they are not immune to the reach of antitrust rules. The headline-grabber was predictably the decision relating to football’s European Super League, but lawyers in this area will take equal interest in the decisions in the ISU and Royal Antwerp cases, given their collective significance on the primacy of EU law where sports federations are making rules with economic and antitrust consequences.

ESL

The ESL case, a challenge through the Spanish courts to the FIFA-UEFA rules concerning the establishment of and participation in new football competitions, was referred up the ECJ to consider the compatibility of the governing bodies’ rules with Article 101 of the Treaty on the Functioning of the EU (‘TFEU’) and Article 102 TFEU, prohibiting anti-competitive measures and the abuse of market dominance respectively. As is well-known to many in the sporting world, this challenge was brought in the context of the ESL’s attempted establishment in April 2021 of a new twelve-club league, which had not obtained prior approval from the authorities. Advocate-General Rantos’ opinion of December 2022 had declared the rules compatible with EU law, prompting an appeal by the ESL to the ECJ.

In finding that both Articles 101 and 102 were infringed by the relevant rules, the ECJ confirmed that the organisation of new competitions constituted economic activity which engaged the antitrust provisions. Consistent with prior decisions of the Court in this issue, the ECJ also affirmed that rules restricting competition by bodies which adopt the dual role of regulator and organiser of commercially exploitable competitions were only permissible if particular requirements are met; namely that the rules are transparent, objective, non-discriminatory and proportionate. Both the discretion to authorise new competitions and the rules prohibiting players participating in them had at their heart an anti-competitive object, as did the regulators’ exclusive exploitation of the commercial rights flowing from their approved competitions. The question of whether there was an objective justification for each of these rules was remitted to the Spanish court, with a strong indication that save for latter, there was not, in the ECJ’s view, likely to be.

ISU

The ISU case similarly concerned a challenge to rules set down by the ice-skating governing body – which like FIFA/UEFA occupies the dual role of regulating the sport and organising competitions – authorising non-ISU skating events, and sanctioning skaters participating in non-authorised events. Both the European Commission and General Court had found these rules in violation of Article 101 TFEU.

The ECJ agreed, finding that the ISU’s rules of pre-authorisation and sanctioning skaters for participating in other skating events had the object of restricting competition and accordingly constituted a violation of EU competition law. In a similar vein to the ESL case, it was made clear that such rules needed to be transparent, objective, non-discriminatory and proportionate, to be permissible. The ECJ further expressed concern with the use of the ISU’s rules on agreed arbitral mechanisms - such as referral to the Court of Arbitration for Sport (‘CAS’) - to determine EU law issues, given that the CAS and the Swiss Federal Court (from where appeals of the CAS lie) are in the jurisdiction of a third state. The final judicial review of EU law issues ought, it was held, to fall within the purview of a court with recourse to the ECJ.

Royal Antwerp

On a slightly different path to the first two was the Royal Antwerp case, originating in the Belgian court as a challenge by a Belgian football club to UEFA’s rules around the minimum number of “home-grown” players to be registered in a squad participating in UEFA competitions. 

The ECJ held that such rules were capable of infringing Article 101 TFEU, where they were in pursuance of an economic objective and/or exceeded what was necessary and inherent to achieving the objective of Article 165 TFEU, the so-called ‘sporting exception’ requiring the EU to take into account the ‘specific nature of sport’. The recruitment and training of young domestic players could be a permissible objective for these purposes – the question of whether UEFA’s rules did no more than necessary to do so was remitted to the Belgian court.

Conclusion

There are certainly new and important things to glean from these cases, whilst simultaneously sitting under the umbrella of the ECJ re-asserting the limits of the so-called ‘sporting exception’, and the primacy of EU antitrust law in the monopolistic pyramidal structure of sporting governance. Some key takeaways are as follows:

Acknowledgment of Regulatory Role

Despite some of the initial media reaction, the judgment in ESL has not provided a clear runway for the establishment of the new rival competition. On the contrary, the ECJ affirmed that it remains in the governing bodies’ gift to establish rules concerning the approval of and eligibility for such competitions, provided they meet the criteria of transparency, objectivity, non-discrimination  and proportionality. Each of the judgments explicitly recognise and tacitly endorse the legitimate role that sports governing bodies play in regulating their respective sports. The ECJ signals that well-designed prior approval and eligibility rules can be legitimate in the context of professional sports, emphasising that such rules are not, in principle, an abuse of dominant position. This recognition grants sports governing bodies some room for manoeuvre.

Scrutiny of Governance and Rule Design

A crucial aspect highlighted in the judgments is the importance of transparent, objective, non-discriminatory, and proportionate rules when it comes to sports governance. The key is the need for: 1) the existence of some rules governing how the associations treat other competitions; and 2) that those rules avoid arbitrariness. The ESL judgment, in particular, underscores the need for substantive criteria ensuring transparency and fairness in determining conditions for access to the market. Time will tell how sports governing bodies design and apply their rules in this area henceforth.

Specificity of Sport vs. Competition Law

The ECJ dismisses the idea that sports' specific characteristics exclude it from the application of EU competition law, emphasising the need for sports governing bodies to operate within a framework ensuring their rules align with competition law standards. Both the ESL and ISU cases have further confirmed the ECJ’s intolerance of governing bodies abusing their market position where they inhabit the dual role of regulator of authorised competitions and organiser of commercially exploitable competitions for the sport - affirming a relatively long and clear line of jurisprudence back to Meca Medina and Majcen v Commission (2006) (C-519/04 P).

Exclusivity of Rights

The ECJ in ESL makes clear that rules granting FIFA and UEFA the exclusive right to exploit commercial rights from their competitions on its face infringes competition law. The ECJ’s analysis posits that the lawfulness of such rules will need to consider factors such as whether or not the measures have the legitimate objective of (e.g.) ensuring a fair redistribution of profits generated by those rights.

Judicial Oversight on EU Law Issues

The ECJ in ISU has provided some potentially interesting consequences for the role of the CAS, emphasising that effective judicial review must cover compliance with EU public policy and competition law rules, and that athletes ought to have the right to ventilate their EU law rights at a court of final appeal with the jurisdiction to refer matters to the ECJ.

Members of 4-5 Gray’s Inn Square Chambers Sports, Media and Entertainment and International Arbitration Groups regularly act in court and before specialist tribunals as counsel, or arbitrator. Queries as to the professional availability of members of the group can be directed to Deputy Head Clerk Stephen Somerville on + 44 (0_20 7670 1545 or by email to [email protected]