This blog post has been contributed by Dr Oana Stefan, Module Convenor for EU law.
On the 21st of December 2023, the ECJ issued its decision in the long awaited Superleague Case C-333/21. The high profile case is interesting for the EU law course as it discusses further the interplay between sporting rules and the internal market law, following up on a series of cases you have already studied, such as Bosman or Deliège, and raising challenges to the European sports model. It also shows once again the important role that good governance principles play when assessing compliance with EU law.
This concerned a project to create a new football league by a number of high-ranking football clubs. The project failed as UEFA and FIFA refused to recognize the new body and warned that any player or club taking part in that new competition would be expelled from competitions organised by FIFA and its confederations. The company set up to organise the Superleague challenged this before the Commercial Court in Madrid arguing that UEFA and FIFA breached both Articles 101 and 102 TFEU, but also the free movement provisions of the Treaty.
The statutes of FIFA and UEFA were at stake in Superleague, as the rules contained therein gave these organisations the exclusive power to organise or give permission for football competitions in Europe, as well as the power to approve new entities such as Superleague. Because of those Statutes, FIFA and UEFA could also threaten to impose sanctions against the clubs that wanted to form Superleague. Those statutes also endowed UEFA and FIFA as original owners of rights emanating from football competitions (including, obviously, media rights). The Madrid Commercial Court asked various preliminary questions related to the application of EU law to these statutes.
It is worth noting that, in his opinion, Advocate General Rantos made several considerations based on Article 165 TFEU. According to paragraph one of this Article:
‘The Union shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function.’
The Advocate General considered that sport has a special nature, as it has a non-economic component (related to sporting competitions) but at the same time it constitutes an area of significant economic activity. These areas are intertwined, so bodies regulating sporting competition such as the UEFA sports federation have the obligation to ensure that third parties are not unduly denied access to the market to the point that competition on that market is thereby distorted. The Advocate General considered that Article 165 TFEU was a special provision potentially shielding sports from the application of competition law (which applies in principle to economic activities). At the same time, the Advocate General considered Article 165 TFEU to also be a horizontal provision which must be taken into consideration in the implementation of all EU policies (para 35).
The Court disagreed. It noted that Article 165 is not a ‘cross cutting provision having general application’ (para 100). The judgment also reads that Article 165 TFEU is not a ‘special rule exempting sport from all or some of the other provisions of primary EU law liable to be applied to it or requiring special treatment for sport in the context of that application’ (para 101). The Court noted that the elements and the objectives of Article 165 TFEU ‘need not be integrated or taken into account in a binding manner’ when applying rules of EU economic law. However, these elements and objectives constitute important contextual considerations that could be used when assessing whether a rule is a restriction to fundamental freedoms or whether EU competition law is breached (para 105).
The Court noted that the organisation of sporting competition and exploitation of media rights are economic activities, which must comply with EU competition law and EU free movement law (paras 90 and following). It then proceeded to determine whether the rules from the FIFA and the UEFA statutes at stake in the case were in breach of competition law, namely Article 102 TFEU – abuse of a dominant position. In that regard, the Court noted that FIFA and UEFA’s prior approval rules for the participation to competitions as well as the potential sanctions were not, in and of themselves, an abuse of a dominant position, and, as such, could have been justified by legitimate aims in the specific context of professional football (paras 145 and 146). Yet, an abuse of dominance could occur if the rules have not been issued and applied in a transparent and objective manner, and if they are discriminatory and not proportionate. Furthermore, the Court considered Article 101 TFEU, as the FIFA and UEFA rules were also considered to be decisions of associations of undertakings (para 115). Given that there were no details as to the substantive and procedural criteria underpinning the FIFA and UEFA restrictions, the Court considered that these rules had an anticompetitive purpose and were a restriction by object, prohibited by Article 101 (1) TFEU (para 176). As for the possible justifications under Article 101 (3) or indeed 102 TFEU, the Court left this assessment for the appreciation of the Madrid court, stressing however that convincing arguments and evidence were necessary to show that the conditions for exemption were satisfied.
The Court also considered the UEFA and FIFA rules under the free movement provisions of the Treaty, identifying Article 56 TFEU – free movement of services as the applicable provision. The rules were indeed considered to be a restriction of trade, which could in principle be justified by public interest objectives related to the organisation of sporting competitions (para 253). Yet, such rules could only be justified if they were transparent, objective, precise, and non-discriminatory (para 254).
The judgment of the ECJ makes clear that it is imperative for UEFA and FIFA to respect good governance. The transparency, objectiveness, precision and non-discriminatory character of the rules issued by UEFA and FIFA are the determining factor in deciding whether these organizations have infringed EU competition and free movement law. As for the Superleague project, the judgment is in no way discussing whether such a venture should go ahead or not; it simply deals with the questions asked by the national judge. Recently, the Madrid court did decide against UEFA and FIFA, following the judgment of the ECJ.