1 SPORT AND COMPETITION LAW AT EU LEVEL beyond the White Paper on Sport Tilburg University, Spring semester 2010 MICHELE COLUCCI

2 WHAT IS THE WHITE PAPER ? A POLITICAL DOCUMENT A POLITICAL DOCUMENT NOT LEGALLY BINDING NOT LEGALLY BINDING DRAFTED BY THE EUROPEAN COMMISSION DRAFTED BY THE EUROPEAN COMMISSION COMPREHENSIVE FRAMEWORK COMPREHENSIVE FRAMEWORK

3 SPORT AND EU: in the name of Autonomy and Specificity NICE DECLARATION (2000): Sporting organizations and Member States have a primary responsibility in the conduct of sporting affairs, with a central role for Sports Federations. BUT… NICE DECLARATION (2000): Sporting organizations and Member States have a primary responsibility in the conduct of sporting affairs, with a central role for Sports Federations. BUT…

4 Limited Autonomy Sporting Organizations have to exercise their task to organise and promote their particular sports with due regard to national and Community legislation Sporting Organizations have to exercise their task to organise and promote their particular sports with due regard to national and Community legislation

5 THE LISBON TREATY 13 December 2007 The Union shall contribute to the promotion of European sporting issues while taking account of its specific nature, its structures based on voluntary activity and its social and educational function. (art. 124 a) ) The Union shall contribute to the promotion of European sporting issues while taking account of its specific nature, its structures based on voluntary activity and its social and educational function. (art. 124 a) )

6 The societal role of sport Enhancing public health through physical activity Enhancing public health through physical activity Fight against doping Fight against doping Education and training Education and training Social inclusion, integration and equal opportunities Social inclusion, integration and equal opportunities Prevention and fight against racism and violence Prevention and fight against racism and violence

7 The economicdimension of sport 15 million people or 5.4 % labour force 15 million people or 5.4 % labour force Value-added of 407 billion euros Value-added of 407 billion euros Tool for local and regional development Tool for local and regional development Tourism Tourism

8 The Organisation of Sport SELF-REGULATION respectful of: SELF-REGULATION respectful of: Good governance principles Good governance principles EU law EU law The European Commission The European Commission Plays a facilitating role or Plays a facilitating role or Takes action if necessary Takes action if necessary

9 General Principle Sport as economic activity:EU LAW applies Sport as economic activity:EU LAW applies Competition Law Competition Law Internal Market rules Internal Market rules No discrimination on basis of nationality No discrimination on basis of nationality

10 Specificity of sporting activities Separate competitions for men and women Separate competitions for men and women Limitations on the number of participants Limitations on the number of participants Need to ensure encertainty concerning outcomes Need to ensure encertainty concerning outcomes Preserving a competitive balance Preserving a competitive balance

11 Specificity of the Sport structure Specificity of the Sport structure Autonomy and diversity of sport organisations Autonomy and diversity of sport organisations Pyramide structure of competitions Pyramide structure of competitions One national federation per sport One national federation per sport

12 The European Model of Sport The Pyramid model

13 Characteristics Promotion and relegation Promotion and relegation Grassroots approach (starting from the clubs) Stakeholders and their role (who does what)

14 EC TREATY ART. 81 EC: Are incompatible (and void )with the common market all agreements between undertakings, decisions by associations of undertakings and concerted practices which may: affect trade between Member States have as their object or effect the prevention, restriction or distortion of competition within the common market

15 Exceptions Agreements which contributes to improving: the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, And which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in questio

16 ABUSE OF DOMINANT POSITION ART. 82 EC: ART. 82 EC: Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States.

17 ABUSE OF DOMINANT POSITION Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

18 Fields of application in Sport Transfer rules Transfer rules Sale of tickets Sale of tickets Broadcasting rights Broadcasting rights Monopoly of federations Monopoly of federations Multi-ownership of clubs Multi-ownership of clubs

19 Basic Principles of Community Law EC law applies to Sport in so far it constitutes an economic activity (ECJ case law) EC law applies to Sport in so far it constitutes an economic activity (ECJ case law) No Activities purely social, artistic or sporting No Activities purely social, artistic or sporting but then MECA MEDICA judgement of 18 July but then MECA MEDICA judgement of 18 July Test of Necessity Test of Necessity Test of Proportionality Test of Proportionality

20 The Legal Methodology in the Meca Medina case STEP 1: Are the EC anti-trust rules, i.e. Articles 81 and/or Art. 82 applicable to Sporting rules? STEP 1: Are the EC anti-trust rules, i.e. Articles 81 and/or Art. 82 applicable to Sporting rules? STEP 2: If EC anti-trust rules are applicable, does the sporting rule fall outside the prohibition of Articles 81 (1) and 82? STEP 2: If EC anti-trust rules are applicable, does the sporting rule fall outside the prohibition of Articles 81 (1) and 82? STEP 3: Can the rule be considered compatible with EC anti-trust rules because it fulfils the conditions of Article 81(3) EC or because of an objective justification under Article 82 EC? STEP 3: Can the rule be considered compatible with EC anti-trust rules because it fulfils the conditions of Article 81(3) EC or because of an objective justification under Article 82 EC?

21 Step 1 1. Is the sports association that adopted the rule in question an undertaking or anassociation of undertakings? a. The sports association is an undertaking to the extent it carries out an economic activity itself (e.g., the selling of broadcasting rights). b. The sports association is an association of undertakings if its members carry out an economic activity. If no economic activity, Articles 81 and 82 do not apply Is trade between MS affected (geographical market, production market, Community interest...)?

22 Step 2 Compatibility of rules with the Community rules on competition cannot be assessed in the abstract. Compatibility of rules with the Community rules on competition cannot be assessed in the abstract. Taking into account: Taking into account: the overall context in which the decision of the association of undertakings was taken or produces its effects. the overall context in which the decision of the association of undertakings was taken or produces its effects. Its objectives: measures inherent in the pursuit of those objectives and proportionate to them. Its objectives: measures inherent in the pursuit of those objectives and proportionate to them. Proportionality of measures (quid sportive sanctions?) Proportionality of measures (quid sportive sanctions?)

23 Step 3 Can the rule be considered compatible with EC anti-trust rules because it fulfils the conditions of Article 81(3) EC or because of an objective justification under Article 82 EC? Can the rule be considered compatible with EC anti-trust rules because it fulfils the conditions of Article 81(3) EC or because of an objective justification under Article 82 EC? Case by case approach Case by case approach No General sports exception! No General sports exception!

24 Sporting rules that are more likely to comply with Art. 81 and Art. 82 EC Selection criteria for sport competition Selection criteria for sport competition At home and away rules At home and away rules Transfer periods Transfer periods Nationality clauses for national teams Nationality clauses for national teams Rules prohibiting the multiple ownership of clubs Rules prohibiting the multiple ownership of clubs Antidoping rules Antidoping rules Rules of the game Rules of the game

25 Sporting rules that are less likely to comply with Articles 81 and 82 EC Rules regulating professions ancillary to sport Rules regulating professions ancillary to sport Rules excluding legal challenges of sports awards before ordinary Courts Rules excluding legal challenges of sports awards before ordinary Courts Rules limiting the number of foreign players Rules limiting the number of foreign players Rules requiring transfer payments for players at the end of their contracts Rules requiring transfer payments for players at the end of their contracts

26 THE NEW SCENARIO RETHINKING SPORT AT EU LEVEL? RETHINKING SPORT AT EU LEVEL? NEW STRATEGIES AMONG STAKEHOLDERS? NEW STRATEGIES AMONG STAKEHOLDERS? CO-OPERATION WITH THE EU INSTITUTIONS? CO-OPERATION WITH THE EU INSTITUTIONS? CHANGE THE EU LEGISLATION IN THE NAME OF AUTONOMY AND SPECIFICITY OF SPORT? CHANGE THE EU LEGISLATION IN THE NAME OF AUTONOMY AND SPECIFICITY OF SPORT?

27 CONCLUSIONS ALL ROADS LEAD TO ROME BUT FIRST... THEY GO THROUGH BRUSSELS