Editor's note: Rusa Agafonova is a PhD Candidate at the University of Zurich, Switzerland
The Olympic Games are the cornerstone event of the Olympic Movement as a
socio-cultural phenomenon as well as the engine of its economic model. Having worldwide
exposure, the Olympic Games guarantee
the International Olympic Committee (IOC) exclusive nine-digit sponsorship
deals. The revenue generated by the Games is later redistributed by the IOC
down the sports pyramid to the International Federations (IFs), National
Olympic Committees (NOCs) and other participants of the Olympic Movement through
a so-called "solidarity mechanism". In other words, the Games
constitute a vital source of financing for the Olympic Movement.
Because of the money involved, the IOC is protective when it comes to
staging the Olympics. This is notably so with respect to ambush marketing which
can have detrimental economic impact for sports governing bodies (SGBs) running
mega-events. The IOC's definition of ambush marketing covers any intentional and
non-intentional use of intellectual property associated with the Olympic Games as
well as the misappropriation of images associated with them without authorisation
from the IOC and the organising committee.
This definition is broad as are the IOC's anti-ambush rules.
40 of the Olympic Charter
The famous Rule 40 of
the Olympic Charter was introduced in 1991 prohibiting
competitors from any use of
name, image or sports performances for advertising purposes
during the Olympic Games and since
then has been critised for its disproportionality.
The blanket ban covered all types of advertising
during the "blackout" ("frozen") period of almost a month,
starting nine days before the Opening Ceremony and ending three days after the
Closing of the Games. Any Olympic-related terms varying from quite specific "Olympia"
and "games" to more generic "medal", "gold",
"pedestal" and to very questionable "summer",
"challenge" and "victory" were banned from use in an advertising
context. These restrictions are even more drastic knowing that violation of the
Olympic Charter can entail temporary or permanent ineligibility or exclusion from
the Olympic Games.
While companies still managed to find loopholes in the
legal challenge was expected on both sides of the Atlantic. In the US, the antitrust
lawsuit against the USA Track and Field and the US Olympic Committee (USOC)
brought to the U.S. District Court by a runner Nick Symmonds was
dismissed on the basis of the
1978 Amateur Sports Act, which granted an implied antitrust immunity to the
In Europe, however, the
complaint filed with the German Competition Authority (Bundeskartellamt) by
the German Athlete Commission and the Federal Association of the German Sports
Goods Industry was successful and resulted in a series of commitments undertaken
by the German NOC (DOSB) and the IOC, but only German athletes could benefit from
Bundeskartellamt refers to the
ISU and Kristoffersen
cases admitting the protection of the solidarity mechanism as a potential justification
for a measure restricting competition, but only "if the financial support
granted by the system is sufficiently transparent for the participants who
contributed their performance", i.e.
when they are "in a position to understand and assess the volume of
income generated" and "whether this income, or at least most of it, has
in fact been spent to the benefit of those athletes who are disadvantaged in
terms of opportunities to participate in the Olympic Games". The
Olympic solidarity plan does not attain this high standard of "sufficient
transparency". Hence, Rule 40 and its German analogue were preliminarily assessed as violating
Art. 102 of the Treaty on the Functioning of the European Union (TFEU) (abuse
of dominant position) and Sections 18 and 19 GWB (German Competition Act).
The German decision gave the green light to
advertising campaigns by non-Olympic sponsors during the frozen period and
replaced the authorisation procedure by the requirement to notify the NOC of
the intended campaigns. The list of protected terms was narrowed down, and only
sanctions of economic nature, i.e. contractual damages and/or penalties, became
In summer 2019, the IOC amended Rule 40 for the first
time in many years. Its new wording was akin to a 180-degree turn and allowed competitors, team officials and
other team personnel to use their person, name, picture, and sports
performances for advertising purposes during the Olympic Games as far as the
principles determined by the IOC Executive Board were respected.
should concretise the rule for their Olympic team in accordance with the Key Principles on the
application of by-law 3 to Rule 40 of the Olympic Charter (Tokyo
2020 Key Principles) which give the NOCs some guidance but also
leave them a considerable leeway.
In terms of
substance, non-Olympic sponsors can now undertake "generic advertising",
i.e., campaigns launched at least 90 days before the Event, which create
association with the Olympic Games only through an athlete's image, and which should
avoid any unusual activity during the Games. What
is considered unusual is to be determined on a case-by-case basis.
procedure, non-Olympic partners must now only notify in advance the IOC or the respective
NOCs of their advertising plans. The NOCs are free to decide on the form and
modalities of this notification. It can be a simple notice, such as in Switzerland,
a two-step notification (i.e. a pre-registration and a further notification) as
Africa, or a more complex legal structure consisting of a notification
accompanied by a personal sponsor commitment agreement (PSC) concluded by and
between an athlete's sponsor and the NOC, as is the case in the
USA or in Ireland.
In the latter case, the NOC obtains additional contractual guarantees in case
of a violation of the Rule 40.
these discrepancies put athletes on an unequal footing. The commercial rights
of those sportspeople who already struggle to find sponsors due to the limited
exposure of their sports disciplines might be curtailed even further by the
non-attractiveness of their NOCs' regimes in respect to Olympic sponsorship.
Finally, the IOC recommends
that NOCs adopt monetary rather
than sporting measures to sanction violations.
But recommendations are non-binding, while it seems that such a crucial issue
as sanctions should be covered by a uniform rule more than anything else.
Athletes have, at times in history, been precluded from fully monetising their economic
potential during the most important - and the most marketable - moments of their careers, which themselves are
relatively short. The amended Rule 40 has been welcomed as a big achievement
and fits well with the overall trend for athletes' growing engagement in
policy-making processes and the increasing role of competition law in shaping
sports governance. However, it seems that Rule 40 is not yet at its final
destination. To get there, it should find the balance
between the individual athlete’s right to generate income in relation to their sporting
career and the
collective interest in protecting the solidarity model. It is indeed
important to remember that there are many athletes, including those at the
grassroots level, who are supported by the solidarity mechanism rather than by sponsors'
Conversely, while the
concept of the Olympics has not been distorted by allowing professionals to
compete in the Games, why would it be inadvisable to reconsider the idea of
commercialisation of sport? The
outbreak of COVID-19 and the postponement of the 2020 Tokyo Olympic Games drew
attention to the insecurity of athletes in many senses, and the relationship
between an athlete and a sponsor acquired a deeper significance: despite the
uncertainties of the sports calendars, epidemiologic regimes, and
impossibility of long-term planning, the parties - or rather the partners -
maintained mutual support and shared common values.
All regulatory instruments should be adjusted accordingly.
Rule 40 as it existed before 2019 appeared archaic.
When it entered into force, neither the internet nor social media existed. As
of today, Twitter and especially Instagram have shaped a new paradigm of
hashtags, likes, reposts, and followers.
Rule 40, as it exists in 2021, leaves a risk of unequal implementation due to the fact that NOCs and athletes' associations have
different degrees of bargaining power across the globe and, in the absence of a
uniform clause imposed by the international regulator, give divergent
interpretations to the scope of the rule. The country-to-country approach can
sometimes allow for necessary flexibility in order to ensure optimal
implementation of the regulations, in particular, regarding
compliance with the national legislation of each state. However, some issues, such as the sanctioning
regimes, should be handled in a centralised and harmonised way.
German example has set the trend, but
many NOCs may be reluctant to follow it.
In this respect, the European Commission may
play an important role in reconciling athletes' economic interests and the SGBs' interests with
due consideration to the specificity of sport. It remains to be seen how the situation will
be resolved outside the European Union. Meanwhile, during the period from 13 July to
10 August 2021, we will most likely witness a dramatic change in advertising as
the new Rule 40 will be applied. It is possible that the focus on sports competitions
will be slightly diluted by additional commercial ads, but even this scenario seems
appealing after the silence of quarantine.
 Gold Medal LLC v. USA Track & Field, 187 F. Supp.
3d 1219, 1222 (D. Or. 2016).
 McKelvey Steve, Grady John, Moorman Anita M., Ambush
Marketing and Rule 40 for Tokyo 2020: A Shifting Landscape for Olympic Athletes
and Their Sponsors, Journal of Legal Aspects of Sport, 2021, 31, pp. 94 – 122.
 It is, for example, the key tool for fans' engagement. See Ennis Sean (2020) Understanding Fans and Their
Consumption of Sport. In: Sports Marketing. Palgrave Macmillan, Cham, pp 75-100.