Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

International and European Sports Law – Monthly Report – February 2020 - By Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

The Headlines

Manchester City sanctioned by UEFA’s Financial Fair Play

Manchester City has been sanctioned under UEFA’s Financial Fair Play (FFP) regulations for two seasons for ‘overstating its sponsorship revenue in its accounts and in the break-even information’ it had provided UEFA. The February 14 decision of the Adjudicatory Chamber of the Club Financial Control Body (CFCB) likely heralds the start of a long and bitter legal war between Manchester City and UEFA, which may end up settling many of the questions surrounding the legality of FFP rules. Since its introduction in 2010, the compatibility of FFP with EU law, especially in terms of free movement and competition law, has been a continued point of contention amongst the parties concerned and commentators (see discussion here, here and here). It was only a matter of time that a case would arise to test this issue and the present circumstances seem to indicate that this may go all the way.                                 

Regardless, the ban will not be enforced this season and in light of the appeal process, it is hard to predict when the CFCB’s decision will have any effect. Indeed, Manchester City has shown an incredible willingness to fighting this out in the courts and shows no signs of backing down. The next stop will be the CAS and perhaps followed by the Swiss Federal Tribunal. It should also be recalled that the CAS has already examined FFP in its Galatasaray award, where it found FFP compatible with EU law (see commentary here). There is even a decent chance that this emerging saga may end up in front of the European Commission and eventually the Court of Justice of the European Union.

Sun Yang CAS award published

After a much-anticipated public hearing, the Panel’s award in the Sun Yang case has finally been published, sanctioning Sun Yang with an eight-year period of ineligibility (see here for a detailed commentary). The decision does not reveal anything groundbreaking in terms of its legal reasoning and in many ways the case will most likely be remembered for its historical significance: the case that jumpstarted a new era of increased public hearings at the CAS.

Perhaps of some interest is the extent to which the panel took into account Sun Yang’s behavior during the proceedings in order to support its assessment of the case. For example, the panel describes how Sun Yang had ignored the procedural rules of the hearing by inviting ‘an unknown and unannounced person from the public gallery to join him at his table and act as an impromptu interpreter’. The Panel interpreted this as Sun Yang attempting ‘to take matters into his own hands’ which it found resembled the athlete’s behavior in the case (see para 358). The Panel also found it ‘striking’ that Sun Yang did not express any remorse concerning his actions during the proceedings. Since the proceedings were held publicly and have been recorded, it is possible to verify the Panel’s assessment in this regard.

In the end, it is possible that Sun Yang may seek to reduce the period of ineligibility once the 2021 WADA Code comes into force (see para 368). For now, Sung Yang may also try to appeal the award to the Swiss Federal Tribunal on procedural grounds, and has already indicated his wish to do so. More...

Mega-sporting events and human rights: What role can EU sports diplomacy play? - Conference Report – By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

 On March 05, the T.M.C. Asser Institute hosted ‘Mega-sporting events and human rights: What role can EU sports diplomacy play?’ a Multiplier Sporting Event organized in the framework of a European research project on ‘Promoting a Strategic Approach to EU Sports Diplomacy’. This project funded by the European Commission through its Erasmus+ program aims to help the EU adopt a strategic approach to sports diplomacy and to provide evidence of instances where sport can help amplify EU diplomatic messages and forge better relations with third countries. In particular, Antoine Duval from the Asser Institute is focusing on the role of EU sports diplomacy to strengthen human rights in the context of mega sporting events (MSE) both in Europe and abroad. To this end, he organized the two panels of the day focusing, on the one hand, on the ability of sport governing bodies (SGB) to leverage their diplomatic power to promote human rights, particularly in the context of MSEs and, on the other, on the EU’s role and capacity to strengthened human rights around MSEs. The following report summarizes the main points raised during the discussions. More...

Special Issue Call for Papers: Legal Aspects of Fantasy Sports - International Sports Law Journal

The International Sports Law Journal (ISLJ) invites submissions to a special issue focusing on legal aspects of fantasy sports. For some time, fantasy sports has been a major phenomena in North America and this has been reflected in the sports law literature. Fantasy sports have more recently grown in popularity in the rest of world, raising a number of novel legal questions. The ISLJ wants to support fruitful global discussions about these questions through a special issue. We welcome contributions from different jurisdictions analyzing fantasy sports from the perspective of various areas of law including, but not limited to, intellectual property law, gambling law, and competition law.

Please submit proposed papers through the ISLJ submission system (http://islj.edmgr.com/) no later than November 15, 2020. Submissions should have a reccomended length of 8,000–12,000 words and be prepared in accordance with the ISLJ's house style guidelines (https://www.springer.com/journal/40318/submission-guidelines). All submissions will be subject to double-blind peer review.

Question about the special issue can be directed to the Editor–in-Chief, Johan Lindholm (johan.lindholm@umu.se).

International and European Sports Law – Monthly Report – January 2020 - By Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

The Headlines

IOC Athlete Commission releases its Rule 50 Guidelines for Tokyo 2020

The IOC Athlete Commission presented its Rule 50 Guidelines for Tokyo 2020 at its annual joint meeting with the IOC Executive Board. It comes as Thomas Bach had recently underlined the importance of political neutrality for the IOC and the Olympic Games in his New Year’s message. Generally, rule 50 of the Olympic Charter prohibits any political and religious expression by athletes and their team during the Games, subject to certain exceptions. The Guidelines clarify that this includes the ‘field of play’, anywhere inside the Olympic Village, ‘during Olympic medal ceremonies’ and ‘during the Opening, Closing and other official ceremonies’. On the other hand, athletes may express their views ‘during press conferences and interview’, ‘at team meetings’ and ‘on digital or traditional media, or on other platforms. While rule 50 is nothing new, the Guidelines have reignited a debate on whether it could be considered as a justified restriction on one’s freedom of expression.

 

The IOC has made the case that it is defending the neutrality of sport and that the Olympics is an international forum that should help bring people together instead of focusing on divisions. Specifically, Richard Pound has recently made the argument that the Guidelines have been formulated by the athletes themselves and are a justified restriction on free expression with its basis in ‘mutual respect’. However, many commentators have expressed their skepticism to this view (see here, here and here) citing that politics and the Olympics are inherently mixed, that the IOC is heavily involved in politics, and that the Olympics has often served as the grounds for some of history’s most iconic political protests. All in all, the Guidelines have certainly been a catalyst for a discussion on the extent to which the Olympics can be considered neutral. It also further highlights a divide between athlete committees from within the Olympic Movement structures and other independent athlete representation groups (see Global Athlete and FIFPro’s statements on rule 50).

 

Doping and Corruption Allegations in Weightlifting 

The International Weightlifting Federation (IWF) has found itself embroiled in a doping and corruption scandal after an ARD documentary was aired early in January which raised a wide array of allegations, including against the President of the IWF, Tamás Aján. The documentary also included hidden camera interviews from a Thai Olympic medalist who admits having taken anabolic steroids before having won a bronze medal at the 2012 London Olympic Games and from a team doctor from the Moldovan national team who describes paying for clean doping tests. The IWF’s initial reaction to the documentary was hostile, describing the allegations as ‘insinuations, unfounded accusations and distorted information’ and ‘categorically denies the unsubstantiated’ accusations. It further claims that it has ‘immediately acted’ concerning the situation with the Thai athletes, and WADA has stated that it will follow up with the concerned actors. However, as the matter gained further attention in the main stream media and faced increasing criticism, the IWF moved to try to ‘restore’ its reputation. In practice, this means that Tamás Aján has ‘delegated a range of operation responsibilities’ to Ursual Papandrea, IWF Vice President, while ‘independent experts’ will conduct a review of the allegations made in the ARD documentary. Richard McLaren has been announced to lead the investigation and ‘is empowered to take whatever measures he sees fit to ensure each and every allegation is fully investigated and reported’. The IWF has also stated that it will open a whistleblower line to help aid the investigation.More...


How 2019 Will Shape the International Sports Law of the 2020s - By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

As we begin plunging into a new decade, it can be helpful to look back and reflect on some of the most influential developments and trends from 2019 that may continue to shape international sports law in 2020 and beyond. Hence, this piece will not attempt to recount every single sports law news item but rather identify a few key sports law stories of 2019 that may have a continued impact in the 2020s. The following sections are not in a particular order.More...

Free Event! Mega-sporting events and human rights: What role can EU sports diplomacy play? - 5 March at the Asser Institute in The Hague

The upcoming 2022 FIFA World Cup in Qatar and its links to human rights violations has been the subject of many debates in the media and beyond. In particular, the respect of migrant workers’ labour rights was at the forefront of much public criticisms directed against FIFA. Similarly, past Olympics in Rio, Sochi or Beijing have also been in the limelight for various human rights issues, such as the lack of freedom of the press, systematic discrimination on the basis of sexual orientation or forced evictions. These controversies have led sports governing bodies (SGBs) to slowly embrace human rights as an integral part of their core values and policies. Leading to an increased expectation for SGBs to put their (private) diplomatic capital at the service of human rights by using their leverage vis-à-vis host countries of their mega-sporting events (MSEs). In turn, this also raises the question of the need for the EU to accompany this change by putting human rights at the heart of its own sports diplomacy.


Research collective 
This Multiplier Sporting Event, organised in the framework of the transnational project on ‘Promoting a Strategic Approach to EU Sports Diplomacy’ funded by the Erasmus + Programme, aims to trigger discussions on the role of an EU sports diplomacy in strengthening respect for human rights in the context of MSEs both at home and abroad. It will feature two roundtables focused on the one hand on the diplomatic power and capacity of SGBs to fend for human rights during MSEs and on the other on the EU’s integration of human rights considerations linked to MSEs in its own sports diplomacy.


Programme

13:20 – 14:00 – Welcome and opening speech –Antoine Duval (Asser Institute)
14:00 - 15:30 - Panel 1: Leveraging the Diplomatic Power of the Sports Governing Bodies for Human Rights

  • Lucy Amis (Unicef UK/Institute for Human Rights and Business)
  • Guido Battaglia (Centre for Sport and Human Rights)
  • Florian Kirschner (World Players Association/UNI Global Union)
  • Claire Jenkin (University of Hertfordshire)

15:30 – 16:00 - Coffee Break

16:00 - 17:30 - Panel 2: A Human Rights Dimension for the EU’s Sports Diplomacy?

  • Arnout Geeraert (Utrecht University)
  • Agata Dziarnowska (European Commission)
  • Alexandre Mestre (Sport and Citizenship)
  • Ministry of Health, Welfare and Sport (TBC)

17:30 - Reception

Balancing Athletes’ Interests and The Olympic Partner Programme: the Bundeskartellamt’s Rule 40 Decision - By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1        Introduction

The International Olympic Committee (IOC), after many years of ineffective pushback (see here, here and here) over bye law 3 of rule 40[1] of the Olympic Charter (OC), which restricts the ability of athletes and their entourage to advertise themselves during the ‘blackout’ period’[2] (also known as the ‘frozen period’) of the Olympic Games, may have been gifted a silver bullet to address a major criticism of its rules. This (potentially) magic formula was handed down in a relatively recent decision of the Bundeskartellamt, the German competition law authority, which elucidated how restrictions to athletes’ advertisements during the frozen period may be scrutinized under EU competition law. The following blog begins by explaining the historical and economic context of rule 40 followed by the facts that led to the decision of the Bundeskartellamt. With this background, the decision of the Bundeskartellamt is analyzed to show to what extent it may serve as a model for EU competition law authorities. More...

International and European Sports Law – Monthly Report – November and December 2019- By Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

The Headlines

WADA Conference and the Adoption of 2021 WADA Code Amid Calls for Reform

On November 5-7, WADA held its Fifth World Conference on Doping in Sport where it faced a busy schedule, including the adoption of the revised 2021 World Anti-Doping Code and the election of a new WADA President and Vice-President by the Foundation Board. Concerning the latter, Witold Bańka, Poland’s Minister of Sport and Tourism, was elected as WADA President and Yang Yang, a former Chinese speed skater, elected as Vice-President, replacing Sir Craig Reedie and Linda Helleland respectively.  As Helleland leaves her position, she has expressed some strong views on the state of sport governance, particularly that ‘there is an absence of good governance, openness and independence in the highest levels of international sports’. Helleland was not the only one to recently voice governance concerns, as Rob Koehler, Director General of Global Athlete, also called for a ‘wholesale structural change at WADA’, which includes giving ‘independent’ athletes a vote in WADA’s Foundation Board, ensuring a greater ‘separation of powers’ and ensuring greater protection of athletes’ rights.

In the midst of the calls for reform, the amended 2021 WADA Code and the amended International Standards were also adopted after a two year, three stage code review process. Furthermore, a major milestone in athletes’ rights was achieved with the adoption of the Athletes’ Anti-Doping Rights Acts (separate from the WADA Code), which enumerates certain basic rights to help ‘ensure that Athlete rights within anti-doping are clearly set out, accessible, and universally applicable’. On the other hand, the Act ‘is not a legal document’, which clearly circumscribes some of the potential effects the Act may have. Nonetheless, athlete representative groups have ‘cautiously welcomed’ some of the changes brought by the 2021 WADA Code, such as the ‘modified sanctions for substances of abuse violations’.

Sung Yang’s Historical Public Hearing at the CAS

After much anticipation, the second public hearing in CAS history occurred on November 15 in Montreux, Switzerland in the Sun Yang case (details of this case were discussed in August and September’s monthly report), which was livestreamed and can be seen in its totality in four different parts (Part 1, Part 2, Part 3, Part 4). This was an extremely unique opportunity, which hopefully will become a more common occurrence, to see just how CAS hearings are conducted and perhaps get a taste of some of the logistical issues that can emerge during live oral hearings. One of these problems, accurate translations, rapidly became apparent as soon as Sun Yang sat in the witness chair to give his opening statements. The translators in the box seemed to struggle to provide an intelligible English interpretation of Sun Yang and other witnesses’ statements, while Sun Yang also seemingly had trouble understanding the translated questions being posed to him. The situation degenerated to such an extent that ultimately one of WADA’s officials was called to replace the translators. However, the translation drama did not end there, since during Sun Yang’s closing statements an almost seemingly random person from the public appeared next to Sun Yang who claimed to have been requested from Sun Yang’s team to ‘facilitate’ the translation. Franco Frattini, president of the panel, questioned the identity of the ‘facilitator’ and explained that one could not just simply appear before the court without notice. Interestingly, Sun Yang’s legal team also rapidly intervened claiming that it had not been made of aware of the inclusion of the supporting translator, further complicating the matter. In the end, Sun Yang concluded his statements with the translation from the WADA official.

While it was Sun Yang’s legal team that had provided the original translators in the box, it still raises the question as to how translation at CAS could be improved to ensure a certain standard of translators. After all, quality translation is critical to the parties’ right to be heard under Article 6 (e) ECHR. Regardless, in the end, neither parties made an objection that their right to be heard was violated.

Russian Doping Saga Continues: WADA Compliance Review Committee Recommends Strong Sanctions

As was already discussed in August and September’s monthly report, WADA uncovered numerous inconsistencies concerning data taken from the Moscow Laboratory. After further investigation, WADA’s Compliance Review Committee has recommended that the Russian Anti-Doping Agency (RUSADA) be found non-compliant with the WADA Code. Accompanying the recommendation, the Compliance Review Committee also suggested several sanctions, which include prohibiting Russian athletes from participating in major events like the Olympic Games and ‘any World Championships organized or sanctioned by any Signatory’ for the next four years unless they may ‘dmonstrate that they are not implicated in any way by the non-compliance’. It would also see an embargo on events hosted in Russia during the same period. However, these sanctions did not go far enough for some, like Travis Tygart, chief executive of USADA, who wishes to prevent a repeat of Rio 2016 and PyeongChang 2018 ‘in which a secretly-managed process permitting Russians to compete – did not work’. On the other hand, the IOC has advocated for a softer, individual based approach that pursues ‘the rules of natural justice and respect human rights’. In the midst of these developments, the Athletics Integrity Unit also decided to charge several members of the Russian Athletics Federation (RusAF), including its President Dmitry Shlyakhtin, after a 15 month investigation for ‘tampering and complicity’ concerning a Russian athlete’s whereabouts violations.

Following many calls for strong consequences, the WADA Executive Committee met on December 9th and adopted the recommendations of the Compliance Review Committee. Athlete representatives have expressed their disappointment with the sanctions, calling the decision ‘spineless’ since it did not pursue a complete ban on Russian participation at events such as Euro 2020 and the 2020 Olympics. At this point, RUSADA has sent notice to WADA that it will be disputing the decision of WADA’s Executive Committee’s decision at the CAS.More...


Is UCI the new ISU? Analysing Velon’s Competition Law Complaint to the European Commission - By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

The UCI may soon have to navigate treacherous legal waters after being the subject of two competition law based complaints (see here and here) to the European Commission in less than a month over rule changes and decisions made over the past year. One of these complaints stems from Velon, a private limited company owned by 11 out of the 18 World Tour Teams,[1] and the other comes from the Lega del Ciclismo Professionistico, an entity based in Italy representing an amalgamation of stakeholders in Italian professional cycling. While each of the complaints differ on the actual substance, the essence is the same: both are challenging the way the UCI exercises its regulatory power over cycling because of a growing sense that the UCI is impeding the development of cycling as a sport. Albeit in different ways: Velon sees the UCI infringing on its ability to introduce new race structures and technologies; the Lega del Ciclismo Professionistico believes the UCI is cutting opportunities for semi-professional cycling teams, the middle ground between the World Tour Teams and the amateur teams.

While some of the details remain vague, this blog will aim to unpack part of the claims made by Velon in light of previous case law from both the European Commission and the Court of Justice of the European Union (CJEU) to give a preliminary overview of the main legal issues at stake and some of the potential outcomes of the complaint. First, it will be crucial to understand just who/what Velon is before analyzing the substance of Velon’s complaint. More...

International and European Sports Law – Monthly Report – October 2019 by Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 


The Headlines

International Sports Law Journal (ISLJ) Conference 2019

The T.M.C. Asser Institute and the Asser International Sports Law Centre held the third International Sports Law Journal (ISLJ) Conference on October 24-25. The Conference created a forum for academics and practitioners to discuss, debate and share knowledge on the latest developments of sports law. It featured six uniquely themed panels, which included topics such as ‘Transfer systems in international sports’ and ‘Revisiting the (in)dependence and transparency of the CAS’ to ‘The future of sports: sports law of the future’. The ISLJ Conference was also honored to have two exceptional keynote speakers: Moya Dodd and Ulrich Haas. To kick off the conference, Moya Dodd shared her experiences from an athlete’s perspective in the various boardrooms of FIFA. The second day was then launched by Ulrich Haas, who gave an incredibly thorough and insightful lecture on the importance, function and legal basis of association tribunals in international sport. For a detailed overview of this year’s ISLJ Conference, click here for the official conference report.

The Asser International Sports Law Centre was delighted to have been able to host another great edition of the ISLJ Conference and is thankful to all the participants and speakers who made this edition such a success.

Moving towards greater transparency: Launch of FIFA’s Legal Portal

On October 31, FIFA announced that it was introducing a new legal portal on its website that will give greater access to numerous documents that previously were kept private. FIFA explains that this is in order to help increase its transparency, which was one of the key ‘Guiding Principles’ highlighted in FIFA 2.0: The Vision for the Future released in 2016. This development comes as many sport governing bodies face increasing criticism for the opacity of its judicial bodies’ decisions, which can have tremendous economic and societal impacts. The newly available documents will include: ‘decisions rendered on the merits by the FIFA Disciplinary Committee and the FIFA Appeal Committee (notified as of 1 January 2019); decisions rendered on the merits by the FIFA Ethics Committee (notified since 1 January 2019); decisions rendered on the merits by the FIFA Players’ Status Committee and the FIFA Dispute Resolution Chamber; non-confidential CAS awards in proceedings to which FIFA is a party (notified since 1 January 2019); list of CAS arbitrators proposed by FIFA for appointment by ICAS, and the number of times they have been nominated in CAS proceedings’. The list of decisions from all the aforementioned bodies are updated every four months, according to their respective webpages. However, time will ultimately tell how consistently decisions are published. Nevertheless, this move is a major milestone in FIFA’s journey towards increasing its transparency.

Hong Kong Protests, Human Rights and (e)Sports Law: The Blizzard and NBA controversies

Both Blizzard, a major video game developer, and the NBA received a flurry of criticism for their responses to persons expressing support for the Hong Kong protests over the past month. On October 8, Blizzard sanctioned Blitzchung, a professional Hearthstone player who expressed support of the Hong Kong protest during a post-match interview, by eliminating the prize money he had won and suspending him for one year from any Hearthstone tournament. Additionally, Blizzard will cease to work with the casters who conducted the interview. With mounting disapproval over the sanctions,  J. Allen Brack, the president of Blizzard, restored the prize money and reduced the period of ineligibility to 6 months.

The NBA controversy started when Daryl Morey, the general manager of the Houston Rockets, tweeted his support for the protests in Hong Kong. The tweet garnered much attention, especially in China where it received a lot of backlash, including an announcement from CCTV, the official state broadcaster in China, that it was suspending all broadcasts of the NBA preseason games. In attempts to appease its Chinese audience, which is a highly profitable market for the NBA, Morey deleted the tweet and posted an apology, and the NBA responded by saying that the initial tweet was ‘regrettable’. Many scolded these actions and accused the NBA of censorship to which the NBA Commissioner, Adam Silver, responded that the NBA remains committed to freedom of expression.

Both cases highlighted how (e)sport organizations may be faced with competing interests to either guarantee greater protection of human rights or to pursue interests that perhaps have certain financial motivations. More...


Asser International Sports Law Blog | FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München. By Marine Montejo

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München. By Marine Montejo

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre.

On 3 June 2016, the Landgericht München (“Munich Regional Court”) ordered temporary injunctions against the International Basketball Federation (“FIBA”) and FIBA Europe, prohibiting them from sanctioning clubs who want to participate in competitions organized by Euroleague Commercial Assets (“ECA”). The reasoning of the Court is based on breaches of German and EU competition law provisions. FIBA and FIBA Europe are, according to the judge, abusing their dominant position by excluding or threatening to exclude national teams from their international competitions because of the participation of their clubs in the Euroleague. This decision is the first judicial step taken in the ongoing legal battle between FIBA and ECA over the organization of European basketball competitions.

This judgment raises several interesting points with regard to how the national judge deals with the alleged abuse of a dominant position by European and international federations. A few questions arise regarding the competence of the Munich Regional Court that may be interesting to first look at in the wake of an appeal before examining the substance of the case. 


1. FIBA Europe/FIBA vs Euroleague: the dispute’s background

FIBA and FIBA Europe are involved in a bitter struggle with ECA for the control of the European basketball competitions. The dispute commenced with FIBA Europe (fully supported by FIBA) announcing the creation of a Basketball Champions League starting from the 2016-2017 season at the end of last year. Through the new “official” competition, FIBA intends to reinstate its hold over the organization of European championships. Back in 2001, ECA took over the organization of the European professional clubs’ competition after a harsh row with FIBA. FIBA did not trademark the name “Euroleague”, leaving the organisation without any legal avenues to prevent its use elsewhere. It battled for a year with ECA but finally left the organisation of those competitions to ECA in order to promote uniformity at that level of competition. Since then, Euroleague and Eurocup, the continent’s top two clubs’ competitions, are overseen by ECA, a commercial private body owned by the clubs participating in those tournaments. The status quo has now been challenged by the creation of a FIBA rival competition and the newly created fracture in European professional basketball is showing no signs of letting up, risking the possibility of having two continental leagues in competition with each other as of next season. In response to the creation of the FIBA Champions League, ECA announced its intention not only to maintain its competitions but to evolve toward a closed, franchise-based league. In retaliation, FIBA Europe (publicly backed by FIBA) put pressure on national federations by threatening to withdraw their rights to participate in its international competitions, including EuroBasket 2017, if they would continue allowing their clubs to participate in the ECA competitions (Euroleague and Eurocup). FIBA’s position, in that FIBA Executive Committee decided to fully support FIBA Europe’s decision, has also raised concerns surrounding possible sanctions on national teams for the 2016 Rio Olympic Games.  

At this point the dispute moved away from the basketball court to the legal field. The first shoot out occurred in relation to the Euroleague which, in February, filed a complaint before the European Competition against FIBA for alleged abuses of their dominant position (art. 102 TFEU) by threatening national federations to force their professional clubs and leagues to rescind their participation in the Euroleague competitions. From its back court, FIBA caught the ball and, in April, filed a complaint against FIBA Executive Committee decided to fully support FIBA Europe’s decision. FIBA Executive Committee decided to fully support FIBA Europe’s decision. FIBA Executive Committee decided to fully support FIBA Europe’s decision. ECA before the same EU Commission for the same breaches of EU competition law provisions. Possibly for the first time in EU competition law, we have two undertakings filing two different complaints against the same parties for the same alleged breaches of article 102 TFEU. DG COMP, now in the place of a referee, has to decide whether it will open an investigation into the matter and if it so decides, it probably will have to open two procedures (or at least join both of them). 

 

2. The procedure and the jurisdiction of the Munich Regional Court 

One could think that it was a tight game in the hands of the Commission, but Euroleague, along with 12 professional basketball clubs, decided to spin dribble and scored a buzzer-beater by asking for preliminary injunctions before the Landgericht München. Preliminary injunctions (einstweilige Verfüngung) are interim remedies, provided by the German Code of Civil Procedure, for exceptional cases in civil and commercial matters. They are granted to secure the enforcement of a final judgement that may be endangered before the rights of the parties have been finally determined. Where the case is urgent, the Court is allowed to make a decision ex parte, namely without giving the respondent an opportunity to be heard and without an oral hearing. In the decision, the judge referred to the provision on urgency (section 937(2) of the Code of Civil Procedure) which implies that he felt the pressure of the run-up to the 2016 Rio Olympic Games and the 2016 Basketball Qualifying Tournament scheduled to take place at the beginning of July. Moreover, in its press release following the judgement, FIBA regretted that it was not invited, along with FIBA Europe, to present their views which tends to confirm that, in this case, the conditions for urgency were met and that both the international and European federations were ex parte in the dispute. 

The territorial jurisdiction of the Munich Regional Court is not of concern for FIBA Europe as it is seated in the same city. However, for FIBA, situated in Mies, Switzerland, the question should be addressed. The Court retained its competence from the Lugano Convention of 2007 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters to which Germany and Switzerland have signed. It then states that “pursuant to article 6(1) (of the) Lugano Convention, in proceedings against a number of defendants that involve the same matter and that it is expedient to hear together in order to avoid irreconcilable judgments, the proceedings may be heard in the place where one of the defendants is domiciled. In this case, this is Munich”. The Court may be too straightforward in establishing its competence.  

The clause on competence enshrined in Article 6(1) provides that “a person (…) may be sued (…) where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”. The key legal concept for a national court to derive its competence from the Lugano Convention is whether the claims are so closely connected that a person/entity based in another State (in this case FIBA, Switzerland) may be subject to its scrutiny along with the others defendants (in this case FIBA Europe, Germany). In its decision, the Court enclosed three documents transmitted by the appellants through which the Slovenian, Italian and Hellenic national basketball federations were warned about potential sanctions they were facing due to the actions of their clubs entering into an agreement with ECA. These documents were signed by Kamil Novak, FIBA Europe Executive Director, and referred to FIBA Europe’s Board decision to ban national federations from participating in Senior men’s national team competitions organised by FIBA Europe because their clubs appear to be taking part in ECA competitions. These assumptions were based on press statements about their intention to take part in ECA competitions. The letters are only of relevance to FIBA insofar as a copy of the so-called letter was sent to the international federation. It takes a stretch of the imagination to consider, from these documents only, that the claim against FIBA is closely connected to the one against FIBA Europe.

Moreover, article 2(1) of the Convention provides that “persons domiciled in a State bound by this Convention shall, whatever their nationality, be sued in the Court of that States”. FIBA could argue that this is the case of Swiss Courts. A number of exceptions exist to this general provision. Under article 5(3) “a person domiciled in a State bound by this Convention may, in another State bound by this Convention, be sued (…) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”. In that case, FIBA could be sued in Germany because its decisions may have an effect on German basketball clubs. Unluckily, none of the applicants are German basketball clubs which, again, put the competence of the Munich Regional Court into perspective as, in the case of FIBA, there is no harmful effect yet.

In order to justify the competence of the Munich Court, it may be easier to rely on article 6(1) of the Convention, referred to above. In case C-352/13, Cartel Damage Claims (CDC) Hydrogen Peroxide SA, on the interpretation of article 6(1) of Regulation 44/2001, the wording of which is identical to that of Article 6(1) of the Lugano Convention, the Court states that “it is necessary to ascertain whether, between various claims brought by the same applicant against various defendants, there is a connection of such a kind that it is expedient to determine those actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings (…) In that regard, in order for judgments to be regarded as irreconcilable, it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in the context of the same situation of fact and law” (p. 20). It is true that FIBA publicly backed FIBA Europe when it threatened to extend the ban to its competitions and participation in the Olympic Games) and that the claim before the European Commission was filed by both international and European federations. It seems that the requirement that the same situation of fact and law must arise is satisfied in those circumstances. Moreover, and the judge refers to it, under FIBA’s General Statutes, national federations have the obligation to ensure that their clubs, leagues and players participate only in official international activities and competitions (art. 9.1) upon the risk of sanctions in the event of non-compliance (art. 12). In that case, and as is often the case for sports governing bodies, national basketball federations must implement the rules and decisions from FIBA and FIBA Europe which confirms that there is a connection between the two entities on this particular case and that the Munich Regional Court is presumably competent; even if, in this case, a more in-depth analysis on the rule of jurisdiction would have been welcome. 

 

3. Is FIBA Europe abusing its dominant position? 

Given that the Munich Regional Court held that it was competent, it granted preliminary injunctions to FIBA on the ground of an abuse of a dominant position under EU law (art 102 TFEU) and under the corresponding provisions in German law.  

The Court defined two markets where FIBA and FIBA Europe each hold a dominant position. FIBA is dominant on the market for “competitions of the national team”. That dominant position relies, according to the judge, on article 1(2) of FIBA’s Statutes providing that “FIBA is the sole competent authority for basketball throughout the world and is recognised as such by the International Olympic Committee”. A broader market definition for FIBA, as a worldwide basketball regulator, would be the market for basketball competitions. It is not contested that international federations hold a dominant position at the top of a sports organisation nor that they regulate all matters related to their sports with other (continental and national) federations and bodies at lower levels. This position is then secure by the principle of solidarity which, in the case of basketball, can be found in article 1(4), which provides that “all bodies and officials of FIBA must observe the General Statutes, Internal Regulations, other rules and regulations, and decisions of FIBA”, and article 9, which lists the obligations of members. That principle is reinforced with a mechanism of sanctions (articles 10, 11 and 12). However, the market may appear too broad. A narrower market may be the market for international basketball competitions of the national teams excluding continental competitions. This market would specifically target the mission of FIBA as an international competitions organizer for basketball. In particular, FIBA is responsible for the organisation of the FIBA Basketball World Cup and the FIBA Olympic Qualifying Tournament, with both competitions determining which teams will participate in the Olympic Games. While defining a market for “competitions of the national teams”, the judge targeted both of the markets where FIBA holds a dominant position. For FIBA Europe, the judge defined a market for “European competitions of the national teams”. This market covers FIBA Europe’s mission to organise the EuroBasket. The alleged excluding practices are related to the participation in European and international competitions of the national teams, so it seems that both narrower markets are relevant in the case where FIBA and FIBA Europe hold dominant positions.

While defining the relevant markets, the judge only targets competitions for national teams. Does the same still apply for club competitions? The core problem of the dispute is about the organisation of basketball professional club’s European competitions. If one would define a market for the professional basketball clubs’ European competitions that market may exists and ECA, as the sole organiser of Euroleague and Eurocup, is in a dominant position. The creation of the Basketball Champions League is an attempt from FIBA and FIBA Europe to enter that market and challenge that dominant position.  

Holding a dominant position on a market is not contrary to EU competition law provisions, but rather it is the abuse of that dominant position that needs to be examined. In the case of FIBA, the judge considers article 9(1) of FIBA Statutes regarding the obligations of the members, i.e., national federations. Under provision (d), “national member federations must (…) ensure at all times that their leagues, clubs, players and officials participate only in international activities and competitions officially recognised by the respective national member federations and by FIBA”. FIBA Europe sent a letter to three national federations advising them that their right to participate in Eurobasket 2017 had been withdrawn because some of their professional clubs chose to compete in the Euroleague 2016/2017. A copy of this letter was transmitted to FIBA, “which is competent to take any decisions it deems necessary regarding worldwide events”. From these letters, it is clear that FIBA and FIBA Europe used or will use their regulatory power to sanction national federations for a breach of their solidarity obligations. By doing so, national federations are excluded from all European and international competitions. Moreover, the pressure on national federations will probably lead to the exclusion of ECA from the market for professional basketball clubs’ European competitions as none of the clubs will be able to participate in the Euroleague. In that case, article 9(1) can rightly be qualified as an exclusivity clause that leads to an exclusionary abuse by dominant undertakings, and the judge is rightly assessing the situation, FIBA is abusing its dominant position by threatening to exclude national basketball teams from the 2016 Olympic qualifying tournament and, by extension, the 2016 Olympic Games. FIBA Europe is also abusing its dominant position by, in its case, excluding national basketball teams from the Eurobasket 2017. The fact that FIBA/FIBA Europe are creating a new European competition for clubs has nothing to do with their dominance; rather, a competition problem occurs when they use their power to sanction national federations by pressuring them to force their clubs to participate in the “official” competition. Similar situations are arising where international federations are fighting the emergence of “unsanctioned” private leagues by using their sanction powers. The Belgian competition authority already granted interim measures to the Longines Champions League in a dispute where the FEI tried to suspend riders and horses that were participating in the competition. A similar case involving ISU and suspended ice speed skaters is pending before the European Commission.  

Nonetheless, the German Court goes on to mention possible justifications to FIBA/FIBA Europe’s behaviour pertaining to article 101 TFEU. This is rather surprising, even though such a stance is permissible, after it just concluded there had been a breach of article 102 TFEU. If article 101 was to be applied, it could be argued that the fact that FIBA Europe and FIBA are excluding national federations constitutes concerted practices leading to restrictions upon competition on the market for professional basketball clubs’ European competitions. In that case, the analysis could move to article 101§3 and examine proportionate justifications. The judge seems sensible that the outcome of FIBA and FIBA Europe’s practices cannot lead to anything other than undermining the viability of Euroleague competitions by preventing clubs to participate. It does not appear, as such, as a proportionate justification.

However, the judge may, again, be too straightforward in his application of articles 101 and 102 TFEU. FIBA and FIBA Europe may argue that there are justifications for using their sanctions power. The Court of Justice already held that not every sporting rule that is capable of restricting competition infringes articles 101 and 102 TFEU (C-519/04, Meca Medina). In that case, in assessing the compatibility of the obligation for national basketball federations to force their professional clubs to take part in the Basketball Champions League upon sanction by the international and European federations, the judge must take into account the Wouters criteria (C-309/99): (i) the objectives of FIBA and FIBA Europe measure; (ii) whether the consequential effects that restrict competition are inherent in the pursuit of those objectives; and (iii) whether they are proportionate to them. As seen before, the pressure on national federations will probably have an adverse effect on competition, making it impossible for ECA to organise a viable competition as no professional clubs will take part (this doesn’t take into account the third factor – that professional clubs do not have any interest in European and international competitions, and that they are probably better off keeping their players). Nonetheless, FIBA may bring previous case law and article 165 TFEU to the dispute and argue that there is no breach of EU competition law in the sense that restrictive effects on competition are, in this case, inherent and necessary to the organisation of basketball. The specificity of sports organisations, the solidarity mechanisms between different levels of competition and the pyramidal structures have already been recognised. FIBA Europe and FIBA are, here, making sure that national federations comply with article 9(1) of the FIBA Statutes and that professional clubs will participate in its European competitions. FIBA is then meant, as the sole legitimate basketball authority, to apply sanctions if its members do not comply with their obligations. All the reasoning will focus on proving that these effects are proportionate to the legitimate genuine sporting interest pursued. The impact of FIBA Europe’s decision (and FIBA potential decision) is really important, and, it is readily apparent that FIBA should not focus on its commercial exploitation of the Basketball Champions League competition as it has already been decided that rules prohibiting clubs or athletes from participating in competitions other than those organised by sports federations under the threat of penalties do not comply with EU competition law provisions (see for example the FIA Commission decision, IP/01/1523). On the other hand, the Lethonen case on transfer periods (C-176/96) may be useful as a rule whose objective is to ensure the regularity of competitions (competitive balance, functioning of the championships and effective calendar) is more likely to comply with articles 101 and 102 TFEU. Those are just possible justifications and there is sufficient flexibility in articles 101 and 102 TFEU for FIBA and FIBA Europe to justify more proactive behaviours under EU competition law.  

The German judge also disregarded possible objective justifications under article 102 TFEU. In that case, again, the monopolistic pyramid structure of sport may be taken into account.  

The judge goes on to say that FIBA must await the outcome of antitrust proceedings before the Europe Commission regarding whether ECA is also abusing its dominant position. This is, again, really surprising for two reasons. On one hand, the judge does not tackle the behaviour of ECA in his decision. As discussed, ECA enjoyed a monopoly over the organisation of European competitions that FIBA and FIBA Europe wanted to challenge by creating the Basketball Champions League. In that dispute, ECA is also using its monopoly position toward professional clubs and national leagues to consolidate its organisation. On the other hand, filing a complaint before the European Commission does not presume that DG Competition will open an investigation on the matter. DG COMP enjoys a broad discretion with regard to opening an investigation based on the complaint. What will happen to FIBA if the Commission decides to reject the complaint without analysing its substance? Moreover, an in-depth investigation is a (very) long procedure that can take years before the Commission issues a decision. The German judge is putting FIBA and FIBA Europe under a lot of legal uncertainty and, while protecting the rights of Euroleague, threatened the viability of the European Basketball League if, in the end, ECA is also abusing its dominant position. This is probably the most questionable point in this judgement. 

Finally, the judge finds that “the entitlement to take part in Olympic Games should be decided for sports reasons. The decision of certain clubs to take part in a certain club competition has, in terms of sport, nothing whatsoever to do with a national team’s participation in international competitions”. Putting aside the fact that national teams are composed of athletes coming from those clubs and the controversies that already exist about the release of players, it is difficult to understand what the judge meant by this. FIBA is recognised by the IOC as the sole worldwide competent authority for basketball. As such, national federations must respect the rules FIBA sets in order to qualify for the Olympics. Regardless of the contested practices at stakes, FIBA has the power to sanction a federation if the latter does not comply with its regulations and the participation in its competition may be one of the sanctions it can impose.  

As a conclusion, it may be recalled that this judgement is provisional and probably the first of a long series. FIBA has already announced its intention to appeal the judgement, highlighting the fact that the contested sanctions were already withdrawn by FIBA Europe’s Board a few days before the Munich Regional Court released its decision and ECA’s position hasn’t properly been assessed. However, these circumstances and facts should not obfuscate the key legal question here – namely, the assessment under EU competition law of the use by international federation of its regulatory powers to stop the emergence of unsanctioned competitions.


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