Wednesday, July 24, 2024

Advocate General Rantos Gives Red Cards To The Super League And The General Court in European Super League and International Skating Union

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On December 15, 2022, Advocate General Rantos delivered his opinions in the European Super League (“ESL”) and International Skating Union (“ISU”) cases. Both cases concern the application of EU competition rules to sport governing bodies. Advocate General Rantos’ opinions suggest that sport governing bodies may prohibit third-party events and impose sanctions on the relevant participants as long as the governing bodies’ decisions are inherent and proportionate to achieving a legitimate objective relating to the “specific nature of sport” and the “European Sports Model.”[1]

Background

ESL. In April 2021, 12 top European football clubs announced a new semi-open competition, the European Super League, as an alternative to UEFA’s Champions League. Under the proposed model, participating football clubs would play at the ESL (as opposed to the UEFA’s Champions League) while continuing to participate in national championships organized under UEFA rules.[2] UEFA and three national federations issued a joint press release threatening sanctions against participating clubs and players on the same day.[3] In addition, the vehicle incorporated to implement the ESL and participated by said football clubs brought an action against UEFA before a Spanish court, arguing that UEFA’s sanctions and its failure to authorize the ESL breached Articles 101 and 102 TFEU. In May 2021, the Spanish court referred the case to the Court of Justice, asking whether UEFA and FIFA rules requiring prior authorization of third-party events and imposing sanctions on participating clubs breached EU competition rules.

ISU. This case concerns an appeal by the ISU, an international body governing ice skating events, of the General Court judgment of 2020 that upheld the Commission’s infringement decision against the ISU.[4] In the contested decision, the Commission had found that the ISU rules on prior-authorization of alternative ice skating events and sanctions on participating athletes (including lifelong bans) breached Article 101 TFEU.

The constitutional significance of the European Sports Model

Advocate General Rantos’ opinions in ESL and ISU are premised on the constitutional recognition of the European Sports Model, which is characterized by: (i) a pyramid structure ranging from amateur sport to elite professional sport; (ii) open competitions across teams, including promotions and relegations; and (iii) a financial solidarity regime. Advocate General Rantos suggests that sport governing bodies, like UEFA and ISU, play a significant role in the European Sports Model, by guaranteeing the uniform application of rules. Most notably, Advocate General Rantos notes that sport governing bodies’ dual role as both the regulator and a commercial actor organizing international competitions does not violate competition law in and of itself. Against this background, Advocate General Rantos opines that Article 165 TFEU’s references to the “specific nature” and “social and education function” of sport could provide objective justification for sport governing bodies’ actions.

ESL: clubs can break-away but cannot have their cake and eat it too

Applying this framework to the case at hand, in ESL, Advocate General Rantos finds that UEFA rules requiring prior approval for third-party events and imposing sanctions on participating clubs do not restrict competition by object as long as they are proportionate and inherent to the functioning of the European Sports Model. In applying the ancillary restraints doctrine to the UEFA rules, Advocate General Rantos opines that:

  • the prior approval scheme inherently pursues the legitimate sporting objectives of openness of competitions and equal opportunity (as it would otherwise be impossible to establish common footballing rules, competitions, and a match calendar);
  • UEFA’s decision not to authorize the ESL is proportionate, as ESL’s semi-closed system (which guaranteed the participation of the 12 founding clubs) threatened the openness and equal opportunity guaranteed by the European Sports Model;
  • UEFA’s sanctions against participating ESL clubs pursued similar objectives and were proportionate given the clubs’ active role in organizing the ESL. However, sanctions against players who were in no way responsible were disproportionate.

Overall, Advocate General Rantos suggests that participating ESL clubs cannot have their cake and eat it too, by simultaneously continuing to participate in certain parts of the UEFA ecosystem (i.e., the national leagues) without any regard for UEFA’s rules when it comes to directly competing against UEFA in the most lucrative segment of the football industry.

ISU: the General Court and the Commission sent to the bench

On the application of the ancillary restraints to the ISU case, Advocate General Rantos finds that the General Court erred in its finding that the ISU’s rules were restrictive of competition by object because they did not fulfill the ancillary restraints doctrine. The ISU opinion clarifies that a failure to meet the conditions of ancillary restraints does not automatically lead to a by object classification, but rather warrants an in-depth examination of the effects of the agreement.[5] Advocate General Rantos therefore requests the case to be referred back to the General Court for an assessment of the anticompetitive effects of ISU’s rules.

Practical implications: has the final whistle been blown?

The opinions are not binding, though the Court of Justice follows the Advocate General’s lead in about 80% of cases.[6] If followed, Advocate General Rantos’ endorsement of Article 165 TFEU would crystallize a lenient but pragmatic approach towards scrutiny of sports governance and a high burden for proving that sport federation bodies’ decisions violate competition law rules.


[1]      European Superleague Company SL v. UEFA and FIFA (“ESL Opinion”) (Case C-333/21), opinion of Advocate General Rantos, EU:C:2022:993 and International Skating Union v. Commission (“ISU Opinion”) (Case C-124/21 P), opinion of Advocate General Rantos, EU:C:2022:988.

[2]      The Super League Press Release, “Leading European Football Clubs Announce New Super League Competition,” April 18, 2021.

[3]      UEFA Press Release, “Statement by UEFA, the English Football Association, the Premier League, the Royal Spanish Football Federation (RFEF), LaLiga, the Italian Football Federation (FIGC) and Lega Serie A,” April 18, 2021.

[4]      International Skating Union v. Commission (Case T-93/18) EU:T:2020:610; see our December 2020 EU Competition Newsletter.

[5]      ISU Opinion, paras. 96-97, citing Meca-Medina v. Commission (Case C-519/04 P) EU:C:2006:492.

[6]      Hunton Andrews Kurth, “Advocate General Upholds Validity of Standard Contractual Clauses in Schrems II Case,” December 20, 2019, available here.

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