#SportsLaw #CompetitionLaw #ISU #Athletes #EULaw
Wednesday 16 December 2020 - In its long-awaited ruling, the General Court confirms that the International Skating Association (ISU)’s rules which provided for severe sanctions against athletes taking part in speed skating events not authorized by ISU are contrary to the European Union's competition rules. This newsflash focuses on the General Court’s ruling.
The former eligibility rules of the International Skating Union (ISU) are at the heart of the conflict that has led to today’s General Court ruling. Under those former eligibility rules, if an athlete had skated in an event not authorised by an ISU Member and/or the ISU then he/she faced a lifetime ban in participating in ISU activities and competitions.
The European Commission’s formal antitrust investigation into the ISU was opened in 2015 after a complaint by the renowned Dutch ice skaters, Tuitert and Kerstholt. Earlier, in 2014, Tuitert had first brought this matter to the attention of Margrethe Vestager via social media, only weeks after the latter had become the EU’s Commissioner for Competition.
The Commission’s investigation led to a decision on 8 December 2017, in which the Commission ruled that the ISU’s former eligibility rules violated Article 101 TFEU and Article 53 of the EEA Agreement. In its decision, the European Commission concluded that the restrictions of competition imposed by the ISU were neither inherent in the pursuit of these legitimate objectives, nor proportionate to achieving them.
On 19 February 2018, the ISU lodged an appeal to the General Court against the European Commission’s decision of 8 December 2017. The ISU sought to annul the Commission’s decision by claiming, among other things, that the ISU’s former eligibility rules did not have as their object or effect the restriction of competition, and that the contested decision contained a fundamental contradiction.
In its decision of 15 December 2020 (T-93/18), the General Court has now confirmed that the eligibility rules have as their object the restriction of competition within the meaning of Article 101 TFEU.
The General Court found that ISU’s position implied a conflict of interest since ISU has a regulatory function while it also organises the most important speed skating competitions in which athletes must compete to earn their living. Such a role as a competition organizer constitutes a commercial activity. The General Court emphasized that the ISU is required to ensure, when examining applications for authorisation of speed skating races, that third-party organisers of such races are not unduly deprived of access to the relevant market, to the extent that competition on that market is distorted.
In addition, the General Court ruled that the eligibility rules only set out authorisation criteria and do not expressly mention the legitimate objectives pursued. The requirements cannot be regarded as clearly defined, transparent, non-discriminatory, and reviewable authorisation criteria, which, as such, would be capable of ensuring the organizers of competitions effective access to the relevant market.
Consequently, the General Court considers that the ISU retained, including after the adoption of authorization criteria in 2015, broad discretion to refuse to authorize competitions proposed by third parties. The General Court also highlighted that the severity of the penalties - a lifelong ban in the present affair - is particularly relevant when identifying potential obstacles to the proper functioning of competition on the relevant market.
The General Court ruled that the penalties provided for by the ISU are disproportionate. It that view, it was interesting to note that the 2016’ relaxation of the rules did not change the General Court’s view as to the disproportionate character. Since 2016, not only have the categories of infringements remained ill defined, but the duration of the penalties incurred, inter alia in the event of participation in unauthorised third-party competitions, have remained severe given the average length of a skater’s career.
The General Court also decided on the legality of the corrective measures imposed by the contested decision to bring an end to the infringement found. The General Court partially upheld the ISU’s claims for annulment in that regard, in so far as the Commission required, subject to a periodic penalty payment, substantial modification of the ISU’s arbitration rules if the pre-authorisation system was retained. According to the General Court, the Commission was not entitled to consider that the ISU’s arbitration rules - which foresaw in an exclusive appeal before the Court of Arbitration for Sports - constituted an aggravating circumstance.
It will be interesting to see whether the General Court’s ruling will be appealed to the Court of Justice of the European Union (CJEU). In the absence of a future CJEU ruling, the General Court’s ruling increases the importance of the European Commission’s decision, which clearly had its impact on some sports governing bodies’ regulations and governance. The ISU, for example, has already amended its eligibility rules in recent years. Those amendments include, among other things, lower potential penalties for athletes participating in unauthorised third-party events and more precise definitions of the authorisation requirements for third-party event organisers, particularly regarding the legitimate objectives that the requirements pursue, such as integrity, health and safety.
In any event, sports will not disappear from the EU's competition law agenda any time soon, as the Union of European Leagues of Basketball (ULEB) has recently filed a formal complaint against the organiser of the Euro League, Europe’s most important basketball competition. At the national level, too, competition law continues to gain importance in sports law, since last year saw several proceedings against sports governing bodies, both before the Belgian Competition Authority and the Belgian Court of Arbitration for Sports, as well as before the courts.
ATFIELD’s lawyers are assisting several (inter)national sports governing bodies and clubs on various competition law matters, including legal proceedings. ATFIELD also relies on the dedicated assistance of ALTIUS’ competition law department headed by Carmen Verdonck.
If you have any questions regarding sports and competition law, please do not hesitate to contact our lawyers:
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