Editor’s note: Thomas Terraz is a L.LM. candidate in the European Law programme at Utrecht University and a former intern of the Asser International Sports Law Centre

1.     Sport Nationalism is Politics

Despite all efforts, the Olympic Games has been and will be immersed in politics. Attempts to shield the Games from social and political realities are almost sure to miss their mark and potentially risk being disproportionate. Moreover, history has laid bare the shortcomings of the attempts to create a sanitized and impenetrable bubble around the Games. The first blog of this series examined the idea of the Games as a sanitized space and dived into the history of political neutrality within the Olympic Movement to unravel the irony that while the IOC aims to keep the Olympic Games ‘clean’ of any politics within its ‘sacred enclosure’, the IOC and the Games itself are largely enveloped in politics. Politics seep into the cracks of this ‘sanitized’ space through: (1) public protests (and their suppression by authoritarian regimes hosting the Games), (2) athletes who use their public image to take a political stand, (3) the IOC who takes decisions on recognizing national Olympic Committees (NOCs) and awarding the Games to countries,[1] and (4) states that use the Games for geo-political posturing.[2] With this background in mind, the aim now is to illustrate the disparity between the IOC’s stance on political neutrality when it concerns athlete protest versus sport nationalism, which also is a form of politics.

As was mentioned in part one of this series, the very first explicit mention of politics in the Olympic Charter was in its 1946 version and aimed to combat ‘the nationalization of sports for political aims’ by preventing ‘a national exultation of success achieved rather than the realization of the common and harmonious objective which is the essential Olympic law’ (emphasis added). This sentiment was further echoed some years later by Avery Brundage (IOC President (1952-1972)) when he declared: ‘The Games are not, and must not become, a contest between nations, which would be entirely contrary to the spirit of the Olympic Movement and would surely lead to disaster’.[3] Regardless of this vision to prevent sport nationalism engulfing the Games and its codification in the Olympic Charter, the current reality paints quite a different picture. One simply has to look at the mass obsession with medal tables during the Olympic Games and its amplification not only by the media but even by members of the Olympic Movement.[4] This is further exacerbated when the achievements of athletes are used for domestic political gain[5] or when they are used to glorify a nation’s prowess on the global stage or to stir nationalism within a populace[6]. Sport nationalism is politics. Arguably, even the worship of national imagery during the Games from the opening ceremony to the medal ceremonies cannot be depoliticized.[7] In many ways, the IOC has turned a blind eye to the politics rooted in these expressions of sport nationalism and instead has focused its energy to sterilize its Olympic spaces and stifle political expression from athletes. One of the ways the IOC has ignored sport nationalism is through its tacit acceptance of medal tables although they are expressly banned by the Olympic Charter.

At this point, the rules restricting athletes’ political protest and those concerning sport nationalism, particularly in terms of medal tables, will be scrutinized in order to highlight the enforcement gap between the two.

2.     The Legal Framework

a.     Athlete Led Political Protest

The groundwork for political neutrality is set out in the Fundamental Principles of Olympism (point 5) and Rule 2 (5) of the Olympic Charter. As was illuminated in the first blog, this is presented by the Olympic Charter to ensure the autonomy of sport. One of the specific ways in which the Olympic Charter tries to secure this ideal is through Rule 50 which bans political protest at Olympic sites.[8] Last year, the IOC Athletes’ Commission released its Guidelines on Rule 50 which underscored the far-reaching prohibitions Rule 50 entails. Athletes are not allowed to display any sort of ‘political messaging’ or make any ‘gestures of a political nature’. This includes no ‘signs or armbands’, no ‘hand gestures or kneeling’. Even ‘refusal to follow the Ceremonies protocol’ is considered a violation of Rule 50. Rubbing salt in the wound is the fact that the geographic scope of this ban extends to ‘all Olympic venues’, thus even covering the Olympic Village. Athletes may only disperse their political speech during ‘press conferences and interviews’, ‘team meetings’ and through ‘digital or traditional media, or on other platforms’. The Guidelines, however, underline that this exception only applies to ‘expressing views’, making a distinction from ‘protests and demonstrations’, which includes the actions described above. Arguably, drawing such a line may be blurry in practice. In other words, at what point does an athlete’s expression of a view become political protest? This question is particularly relevant given the broad interpretation the Guidelines have taken on what constitutes political protest. In the end, while the Guidelines claim that this is only to ensure that everyone ‘can enjoy the experience of the Olympic Games without any divisive disruption’, such a broad interpretation of Rule 50 arguably goes beyond the attempt to prevent any ‘disruption’ to athletes’ achievements.

The consequences for athletes who do not follow these rules can be very serious. Bye-Law 1 to Rule 50 states that if such ‘propaganda’ appears on an athlete’s clothing or equipment (e.g. an armband or hidden t-shirt), they may be disqualified. The Guidelines, on the other hand, remain rather vague. Instead, each case is to be decided by the athlete’s ‘National Olympic Committee, International Federation and the IOC’ and ‘disciplinary action’ will be decided on an individual basis. Nevertheless, given simply the looming threat of a disqualification, it is likely that the vast majority of athletes will simply fall into line.[9]

b.    Sport Nationalism and Medal Tables

The clearest example of the wilful disregard of the Olympic Movement to combat sport nationalism is its tacit acceptance of Olympic medal tables despite an explicit ban in the Olympic Charter. The foundations of this ban can be found in Rule 6 of the Olympic Charter which stipulates that the ‘Olympic Games are competitions between athletes in individual or team events and not between countries’ (emphasis added). Rule 57 then specifically addresses medal tables, stating that the ‘IOC and the OCOG shall not draw up any global ranking per country’. Finally, Rule 27 (6) highlights how NOCs bear a special responsibility to ‘preserve their autonomy and resist all pressures of any kind, including but not limited to political, legal, religious or economic pressures which may prevent them from complying with the Olympic Charter’. With this framing, while the IOC and OCOG are not allowed to create a medal table, the NOCs have essentially been left off the hook. In practice, NOCs have not hesitated to boast of their performances on medal tables. For instance, the United States Olympic Committee jumped at the opportunity to celebrate how it had topped the medal chart for the ‘6th straight games’ at Rio 2016.[10] In the meantime, political leaders and the media continue to gush over the achievements of their countries through their standing in the medal table.[11] While hosting Olympic athletes at the White House, Obama emphasized how Team USA had ‘won the most medals by far’ at the Rio Games.[12] Additionally, national governments are aware of their standings in medal tables and have used them to shape their sport policies, including funding for elite sport.[13] NOCs play a role here as well. For example, the Dutch NOC*NSF, in its overview of its elite sport strategy and finance, has set its goal to be a top 10 nation in elite sport, which involves ‘striving for more medals’.[14] Indeed, the determination of whether a nation is in the top 10 presupposes the creation of some sort of ‘global ranking per country’. Lastly, concerning the media, the IOC’s editorial guidelines for Olympic properties at Rio 2016 even clearly states that it has ‘no objection’ to medal tables in published material.[15]

The Olympic Charter requires the IOC ‘to oppose any political ... abuse of sport and athletes’.[16] All the above examples are illustrations of using sport and athletes’ achievements for political purposes.[17] Given this picture, it could be argued that the IOC has increasingly taken a rather laid back approach to medal tables and does not seem to mind how other actors – both within and outside the Olympic Movement – use them to stimulate a country versus country narrative around the Olympic Games.[18] In essence, medal tables paint those countries at the top as the winners and those at the bottom as the losers, further elevating nationalist politics: the myth of the nations of the innately strong and those of the weak. The IOC, as the ‘supreme authority’ of the Olympic Movement, could adopt a stronger tone to push back against the omnipresent nature of medal tables within the Games as it stands in complete opposition to its fundamental principles.[19] Indeed, part of the IOC’s mission is to ‘to take action to strengthen the unity of the Olympic Movement, to protect its independence, to maintain and promote its political neutrality and to preserve the autonomy of sport’ (emphasis added).[20] But there is no unity in the Olympic Movement concerning medal tables, only disarray, ranging from tacit acceptance to zealous celebrations of a nation’s ranking.

3.     Unveiling the Hypocrisy

In view of this, there seems to be a disparity in the Olympic Movement’s approach to politics when it comes from athletes, where there is the potential for severe sanctions, compared to sport nationalism arising from medal tables, where it seems to have all but accepted their existence. Looking beyond simply medal tables, so much of the Olympic Games emphasizes a competition between countries, further stimulating sport nationalism: (1) an opening ceremony where athletes march into an arena behind their nation’s flag and where the host puts on ‘cultural performances’ that ‘dramatize national myths, experiences, and values’[21]; (2) national anthems that are religiously played during each medal ceremony while national flags are hoisted up; (3) the way in which many team sports are played between countries. More credence is given to this view when one also observes how the media – and sometimes even NOCs -  help push a country versus country narrative, which can potentially overshadow athletes’ individual accomplishments.^[22] The constant flood of national imagery during the Games casts doubt on the idea that the Olympic Games is not a competition between countries, creating greater friction between the ideas of ‘universalism and nationalism’.[23] It should also be recalled, as was pointed out in the first blog, that states use sport nationalism to help push foreign and internal political agendas.  Some have argued that in this way sport can be ‘regarded as compensation, a sense of nostalgia or as a cure against the erosion of national identity’, even becoming ‘an alternative to war’.[24] Others have taken another view that instead of acting as a sort of pressure release, the Games ‘may provide opportunities for extending and exacerbating nationalist-inspired conflicts’, further entrenching nationalism.[25]

However, this blog is not arguing that the IOC should take heavy handed action to discourage the media from tallying up medals or to reel in a NOC’s pride in the performance of its athletes or to rid the Olympic Games of all signs of national imagery. On the contrary, it seems that the idea to minimize sport nationalism through the inclusion of Rule 6 and 57 of the Olympic Charter should be characterized as an expression of a lofty ideal that personifies international unity – i.e. something to be aspired to but not some concrete goal to be realized through rigorous enforcement. Again, it is completely legitimate for the Olympic Movement to strive for this ideal and to also defend its political neutrality. Yet, given how the IOC has all but accepted this form of politics (sport nationalism), it is puzzling why it has not taken a more tolerant approach to political expression from athletes, including protests/demonstrations, especially when considering how medal tables arguably pose a far greater threat to the fundamental principles of the Olympic Movement.[26] Perhaps given how sports can help stir national pride within a populace, it is possible that this phenomenon may encourage more viewership hours. Consequently, presenting the Games as a country versus country competition may be more lucrative. On the other hand, potentially unpredictable athlete protests may risk dividing audiences and may also put Olympic sponsors on edge. But assuming this is the case, is this reason enough to ban such expression altogether?

Regardless, in the same way sport nationalism will likely never be completely erased, athletes’ political expression will continue to be part of the Olympic fabric. Fundamentally, it all boils down to whether it is truly possible to disentangle politics and sport? If so, is it realistic or even desirable? One could maybe argue that this unbundling is necessary to promote international unity and to ensure the universality, neutrality and autonomy of sport. However, how far should the Olympic Movement go to achieve this result and is such a consequentialist approach appropriate considering the pressures it places on athletes – i.e. do the ends justify the means? I would argue that this process of sanitization is burdened with too many moral concerns and is an enforcement minefield in practice. While outside the scope of this blog, it should be noted that it is not difficult to imagine an athlete challenging the concerned provisions on the basis of human rights and/or EU law.

All things considered, the IOC chooses the kind of politics it is willing to tolerate within its sphere of influence. The national structures within the Olympic Movement, the influence of national governments, and the seducing narratives of nationalism create significant headwinds in favor of the politics of sport nationalism. Therefore, the IOC, an entity that embodies the transnational, has a responsibility to be a counterbalance in this system.[27] In doing so, the IOC - the leader of the Olympic Movement – should defend, or at least tolerate, the free expression of its ‘people’, the athletes. This is not a radical proposition. It is worth remembering that athletes form an integral part of the Olympic Movement.^[28] Simply respecting the free expression of athletes does not automatically sacrifice the political neutrality of the Olympic Movement.

4.     Conclusion

Over the past year, the IOC has faced increasing public pressure, particularly from athlete stakeholders (see here, here and here) to reverse its course concerning Rule 50 of the Olympic Charter. As a result, it announced that the IOC Athletes Commission would conduct a consultation process concerning Rule 50. The IOC Athletes Commission just recently finished its consultation and its ‘recommendations will be presented to the IOC Executive Board by the end of April 2021’. Meanwhile, NOCs have also individually taken certain steps to allow more athlete activism, such as the US Olympic and Paralympic Committee (USOPC) which has committed to not sanction athletes who ‘peacefully and respectfully’ protest ‘in support of racial and social justice for all human beings’. In this regard, the USOPC declared that ‘human rights are not political, calls for equity and equality must not be confused with divisive demonstrations’. While perhaps attractive at first glance, the USOPC is only moving the goalposts by playing semantics with ‘politics’ by narrowing its definition to eliminate ‘human rights’[29] from its ambit. In doing so, the USOPC does not explain why human rights are not political issues. The reality is that the scope and implications of human rights remain hotly contested issues everywhere in the world, they can hardly be depoliticized. Nevertheless, the softening of the USOPC’s position and its acknowledgement of some its past mistakes is a good start.[30]

In view of today’s strong social currents, the IOC may be forced to abandon its dream of a pure and apolitical Olympic Games. Politics has and will continue to ooze into the sanitized spaces of the Olympic Games. Allowing athletes to raise their voice during the Games would allow them to share their political views with the world, instead of confining them to remaining passive laborers in the Olympic economy subject to the power politics of states.

[1] Although the current IOC President, Thomas Bach, would likely dispute this point. Bach recently argued: ‘Neither awarding the Games, nor participating, are a political judgment regarding the host country.’ See Thomas Bach, ‘The Olympics are about diversity and unity, not politics and profit. Boycotts don't work’ (The Guardian, 24 October 2020).

[2] This is by no means an exhaustive list.

[3] Philip Barker, ‘The forbidden Olympic table’ (Inside the Games, 24 January 2020).

[4] See how the Washington Post gleefully counts the number of US gold medals and celebrates the fact that the U.S. has ‘more than double any other country’s count’. See Team GB’s (British Olympic Association) fervent count of its medals at Rio 2016. See also Team USA’s (U.S. Olympic and Paralympic Committee) glorification of its record-breaking medal count at the Rio 2016.

[5] For example when athletes are used during photo ops for political leaders around the world. See United States (Trump and Obama), Russia (here and here), and The Netherlands among many others.

[6] Ivo van Hilvoorde, Agnees Elling and Ruud Stokvis, ‘How to influence national pride? The Olympic medal index as a unifying narrative’ [2010] 45 International Review for the Sociology of Sport 87.

[7] Jackie Hogan, ‘Staging The Nation: Gendered and Ethnicized Disources of National Identity in Olympic Opening Ceremonies’ [2003] 27 Journal of Sport and Social Issues 100.

[8] Rule 50: ‘No kind of demonstration or political, religious or racial propaganda is permitted in any Olympic sites, venues or other areas.’

[9] Indeed, athletes have been banned for life in the past for political actions. For instance, Vince Matthews and Wayne Collett who were banned for life after a podium protest at the 1972 Munich Olympics. Recently, there have been calls to undo their life bans.

[10] See also Team GB’s tracking of its own ‘record-breaking’ medal performance at the Rio Games.

[11] For some examples of the media obsession around the Olympic Games’ medal tables see: ‘Tokyo Olympics 2020 medal table: How does it work, which country usually wins and what are Britain's hopes?’ (The Telegraph, 26 January 2021); ‘Rio Olympics 2016: Team GB’s record breakers return home from Rio’ (BBC, 23 August 2016). ‘2020 Olympics: USA forecast to top medals table with GB and Australia fifth’ (The Guardian, 23 July 2019); Lazaro Gamio, Kim Soffen and Chiqui Esteban, ‘1,000 Times Gold’ (The Washington Post).

[12] Some have even suggested that the US performance at the 2012 London Olympics could have contributed to a boost in Obama’s polling for the presidential election that year. See John Cassidy, ‘Did the Olympics Boost Obama?’ (The New Yorker, 10 August 2012).

[13] See Germany’s concern of its place in medal rankings to justify restructuring its funding for elite sport. This is also acknowledged by van Hilvoorde, Elling and Stokvis (n 6).

[14] Original: ‘We streven naar meer medailles, in meer disciplines, met meer impact.’

[15] The Pyeongchang editorial guidelines (page 14) do not discourage their use.

[16] Rule 2 (11) Olympic Charter.

[17] See also other examples of the abuse of sport and athletes for political purposes by ‘states that use the Games for geo-political posturing’ in the first blog of this series.

[18] On the narratives around medal tables and the Games see van Hilvoorde, Elling and Stokvis (n 6).

[19] Rule 1 (1) Olympic Charter. Principles such as political neutrality and the autonomy and universality of sport.

[20] Rule 2 (5) Olympic Charter.

[21] Hogan (n 7).

[22] The media may also help stir nationalism by depicting the athletes of its home-nation as ‘succeeding because of their intellect, commitment, and consonance’ while foreign athletes fail due to insufficient ‘strength and skill’. See James Angelini, Andrew Billings and Paul MacArthur, ‘The Nationalistic Revolution Will Be Televised: The 2010 Vancouver Olympic Games on NBC’ [2012] 5 International Journal of Sport Communication 193. Also – Andrew Billings and others, Nationalistic Notions of the Superpowers: Comparative Analyses of the American and Chinese Telecasts in the 2008 Beijing Olympiad [2011] 55 Journal of Broadcasting & Electronic Media 251. Again, on narratives surrounding the Games and medal tables see van Hilvoorde, Elling and Stokvis (n 6).

[23] See Hogan (n 7). See also John Hargreaves, ‘Olympism and Nationalism: Some Preliminary Consideration’ [1992] 27 International Review for the Sociology of Sport 119.

[24] van Hilvoorde, Elling and Stokvis (n 6). See also George Orwell’s description of nationalism and sport in ‘The Sporting Spirit’.

[25] Hargreaves (n 23). It is interesting to note Hargreaves mentions how the Olympic Movement in of itself could perhaps be a sort of counterweight to such a ‘international relation model’. However, given how the Olympic Movement seems to have in many respects abandoned its fight against sport nationalism in the decades since, this caveat has arguably lost much of its weight.

[26] IOC President Thomas Bach even recognizes the trends of ‘rising nationalism’.

[27] This relates to Hargreaves’ point of the Olympic Movement acting to a certain extent autonomously and not simply ‘instruments of foreign policy’ of states. See Hargreaves (n 23).

[28] Rule 1 (1) Olympic Charter: ‘Under the supreme authority and leadership of the International Olympic Committee, the Olympic Movement encompasses organisations, athletes and other persons who agree to be guided by the Olympic Charter. The goal of the Olympic Movement is to contribute to building a peaceful and better world by educating youth through sport practised in accordance with Olympism and its values.’ (emphasis added)

[29] It is possible that the USOPC primarily is referring to ‘racial and social justice’.

[30] The USOPC also recognized its past errors in taking positions against athletes in previous instances.

The European Commission’s competition decisions in the area of sport, which set out broad principles regarding the interface between sports-related activities and EU competition law, are widely publicized. As a result of the decentralization of EU competition law enforcement, however, enforcement activity has largely shifted to the national level. Since 2004, national competition authorities (NCAs) and national courts are empowered to fully apply the EU competition rules on anti-competitive agreements (Article 101 TFEU) and abuse of a dominant position (Article 102 TFEU).

Even though NCAs and national courts have addressed a series of interesting competition cases (notably dealing with the regulatory aspects of sport) during the last ten years, the academic literature has largely overlooked these developments. This is unfortunate since all stakeholders (sports organisations, clubs, practitioners, etc.) increasingly need to learn from pressing issues arising in national cases and enforcement decisions. In a series of blog posts we will explore these unknown territories of the application of EU competition law to sport.

In this second installment of this blog series, we discuss a recent judgment of the regional court (Landgericht) of Dortmund finding that the International Handball Federation (IHF)’s mandatory release system of players for matches of national teams without compensation infringes EU and German competition law.[1] 

Background

In 2009, the Spanish Handball League (ASOBAL) and Group Club Handball (the predecessor of the Forum Club Handball (FCH); an association representing the interest of the top European handball clubs) launched a complaint with the European Commission alleging that the rules of the IHF and EHF on the mandatory release of players were in breach of Articles 101 and 102 TFEU.[2] The Commission opened a preliminary investigation. This prompted the EHF to seek an amicable solution with the complainants.

In May 2010, the EHF signed a Memorandum of Understanding with FCH, covering issues such as the terms of compensation for the release of players and the representation of clubs and other stakeholders in the bodies of the EHF:

• The EHF agreed to pay compensation to the clubs for the release of their players to the national team. Starting from the 2010 European Championship, the EHF paid a fee of 270 EUR per player per match via the national federations to the clubs (amounting to a total compensation of 400.000 EUR, i.e. 10 percent of the profits of the 2010 European Championship).[3]

The EHF agreed on the principle that “each day a player spends with the national team/selection his salary should be insured by the National Federation, EHF or IHF in case of injury in favour of the clubs”.[4]

The EHF took an important step towards more inclusive governance by creating the Professional Handball Board, a strategic platform for various stakeholders (leagues, clubs, national federations, and players). It plays an advisory role through the submission of reports and analyses to the EHF Executive Committee and contributes to the decision-making process through its chairperson (who is a full member of the Executive Committee).

Since many of the complainants’ demands were met, ASBOL and FCH withdrew their competition law complaint. Subsequently, the European Commission closed its preliminary investigation in June 2010.

The EU handball “case” is a good illustration of the remedial potential of EU competition law to strengthen good governance in sport. The mere threat of a formal investigation by the European Commission proved sufficient for the EHF to change its rules for the release of players and to establish a channel for clubs and other stakeholders to participate in its decision-making process.

In 2014, the EHF and FCH renewed the 2010 Memorandum of Understanding (MoU) until June 2018. The modified MoU, which has been the subject of negotiations for more than one year, foresees increased fees for the release of players to the European Championships.

Strengthened by the satisfactory outcome reached with the EHF in 2010, the FCH made attempts to come to a similar arrangement with the IHF. Following negotiations during the course of 2010 and 2011, the IHF for the first time in history paid compensation for the release of players to the World Championship and signed insurance for player salaries for injured players. The IHF Council also proposed to integrate the clubs as stakeholders in its bylaws. The clubs, however, did not accept with the terms and conditions of the proposal and no agreement was reached. The clubs were also dissatisfied with the amount of the compensation paid by the IHF: qualification matches were not compensated and the fee only amounted in average to 10-20 percent of the monthly salary paid by the European top clubs. The prospects of reaching an agreement between the IHF and the CFH dimmed. In March 2012, the IHF made clear that it was no longer prepared to discuss a MoU with the FCH. This prompted 30 German clubs to sue the IHF and the German Handball Federation (DHB) before the regional court of Dortmund in April 2013. 

The 2014 Dortmund judgment

The IHF Player Eligibility Code provides that a club having a foreign player under contract is obliged to “release such player to his National Federation if he is called up to take part in activities of that federation's national team” (Article 7.1.2). The activities include the Olympic Games, World Championships, and continental championships as well as the qualification matches and tournaments for these events. According to Article 7.2 of the Code, a club releasing a national player “shall not have any claim to compensation”. Furthermore, the club must take out insurance coverage for the player in the event of personal injury and resulting consequences for the period for which the player has been called to his federation’s activities (Article 7.3.2). A club failing to release a player that is able to play will be penalized in accordance with the IHF Regulations Concerning Penalties and Fines and the disciplinary regulations of the Continental Confederation concerned (Article 7.4.4).

The German handball clubs, supported by the FCH, argued that the rules concerning the mandatory release of players to the national team and their application by the IHF and DHB constitute an abuse of a dominant position prohibited by Article 102 TFEU and the equivalent German competition law provision (§ 19 Gesetz gegen Wettbewerbsbeschränkungen, GWB).

The regional court of Dortmund first addressed a number of procedural issues. Considering that the DHB is bound by the rules of the IHF, the court decided to join the proceedings against the IHF and DHB. Moreover, the court did not defer to the jurisdictional exclusivity claimed by the defendants. It stressed that the internal disciplinary bodies or even the Court of Arbitration could not be considered independent and impartial for the purpose of reviewing the compatibility of the mandatory player release system with competition law.[5] According to the court, neither the IHF nor the DHB regulations could prevent the clubs from seeking direct recourse to an ordinary civil court. Lastly, the court found German law to be applicable. Even though Article 7 of the IHF Player Eligibility Code affects handball clubs worldwide, its obligations also substantially affect the German market in which the claimants operate.[6] The intimate connection between the claims against the IHF and the DHB further supported the conclusion that the regional court of Dortmund was the appropriate legal venue for hearing the case.

On substance, the court found that the IHF is a monopolist on the market for the organisation of international handball events, including the World Championships and the Olympic Games (i.e. events in which national teams compete), and on a number of other separate, but closely related, commercial markets (e.g. sponsorship). Also on the markets for the organisation of European and national handball competitions, the IHF holds a dominant position (solely and together with the EHF and the national federations).[7]

Turning to the contested rule of the IHF Player Eligibility Code (Article 7), the court stressed that the obligation for clubs to release players for matches of national teams without compensation is incompatible with the civil code rule of good faith in contractual performance.[8] In any normal business, it would be unthinkable that an undertaking would provide for free a resource, its employees, to a competitor seeking to make profits from that resource.[9] At the same time, the court found that this obligation constitutes an exploitative abuse of a dominant position prohibited by § 19 GWB and Article 102 TFEU. When recruiting top foreign-raised players, clubs must take into account the costs of paying their players while they are absent and, what is more, the costs incurred if those players would get injured during an international match. As such, uncompensated player release restricts the clubs’ contractual freedom and distorts competition between the clubs.

Although Article 102 TFEU does not contain an exemption clause similar to Article 101(3) TFEU, an undertaking may escape an abuse finding by demonstrating an objective justification or efficiency defense for its conduct. The court, however, brushed aside the arguments put forward by the IHF and DHB to this end. 

First, the defendants contended that without the player release system, clubs would not be willing to release their players to national teams. The release rules would also prevent clubs from trying to weaken foreign national teams in favor of their own national team.[10] The court stressed, however, that the mandatory release of players for national teams in itself is not being contested. It also pointed to the fact that the IHF, notwithstanding Article 7.2 of the Player Eligibility Code, decided to pay compensation for the release of players to the 2011 and 2013 World Championships. This indicates that in principle a compensation would not adversely affect the sporting or other interests of the IHF. In addition, the court made numerous references to the MoU reached between the EHF and the FCH as well as to the MoU between FIFA and the European Club Association (ECA) (i.e. the deal as a result of which the Oulmers litigation was terminated, see below). These examples indeed exemplify that an uncompensated player release system cannot be considered indispensable.

Second, the defendants argued that participation in international handball events increases the exposure and thus the value of the players, which indirectly benefits the clubs.[11] Also this argument failed to convince the court. If the IHF and DHB would be able to quantify this advantage, this could be taken into consideration when determining the compensation. Yet it could not objectively justify the denial of compensation for the release of players or for their potential injuries.

In light of these observations, the court declared the conditions for the release of players to foreign national teams, embedded in Article 7.2 and 7.3.2 of the IHF Player Eligibility Code, null and void. Interestingly, the court also suggested that the IHF would introduce a cap on the number of days an association would be entitled to call up players for the national team. 

A landmark judgment in the making?

Unsurprisingly, the IHF and the DHB lodged an appeal against the judgment before the higher regional court (Oberlandesgericht) of Düsseldorf. It is not unthinkable that eventually the case will trigger a preliminary reference to the Court of Justice and emerge as the successor of the abandoned Oulmers litigation against the FIFA player release system.

The regional court of Dortmund did not expressly rely on the Wouters proportionality test, transposed in Meca-Medina, to assess whether the IHF’s player release system constituted an abuse of a dominant position. The court’s analysis is, however, largely consistent with the analysis that the Court of Justice would follow. After having established that the contested rules emanate from an undertaking that has a dominant position, the court verified whether there are less restrictive means to achieve the objectives pursued by the IHF’s mandatory player release system. It did not call into question the necessity of a mandatory player release system for the organisation of international handball competitions, but the court did conclude that the current system – which leaves clubs uncompensated – could not be objectively justified.

For at least two reasons the Dortmund judgment, while not final yet, has potential to become an important precedent for many other sports.

First and foremost, it offers the first substantive assessment of the compatibility of player release rules with EU (and national) competition law. Particularly in the event of a preliminary reference to the Court of Justice, the case could serve as a much-needed wake up call to all international sports federations that currently operate a similar system. Arguably, federations could assert that the compensation should not cover all the costs incurred by the clubs. Indirect benefits to the clubs could be discounted. Yet it appears undeniable that the imposition of the burden on clubs to supply players without allowing them a fair share of the resulting benefits constitutes an abuse prohibited by Article 102 TFEU.

Second, even though sports federations usually have practical monopolies in a given sport, the remedial potential of Article 102 TFEU to tackle abusive conduct remains underexplored. This case, and even the earlier competition law complaint lodged against the EHF, reveals that it offers a powerful instrument to steer sports federations into the direction of better governance. Eventually the IHF will have to follow the path that others (e.g. EHF, FIFA) have traveled. After all, the determination of a fair compensation for player release necessitates a consensual strategy that balances the needs of stakeholders, in this case the clubs, with the needs of the federation.

We continue to follow this case closely, so stay tuned.

[1] Landgericht Dortmund, Urteil vom 14.05.2014, 8 O 46/13.

[2] Cases COMP/39659 ASOBAL v handball federations and COMP/39669 Group Club Handball v handball federations.

[3] Forum Club Handball, EHF pays compensation to the clubs, 28 February 2010.

[4] Forum Club Handball, Insurance of player salaries in case of injury, 15 June 2010.

[5] Landgericht Dortmund, Urteil vom 14.05.2014, 8 O 46/13, paras. 104-114.

[6] Idem, para. 118.

[7] Idem, paras. 121-122.

[8] German Civil Code, Section 242 (“An obligor has a duty to perform according to the requirements of good faith, taking customary practice into consideration”).

[9] Landgericht Dortmund, Urteil vom 14.05.2014, 8 O 46/13, para. 129.

[10] Idem, para. 130.

[11] Idem, para. 132.