“I'm
sure that in 1985, plutonium is available in every corner drugstore, but in
1955, it's a little hard to come by.” (Dr. Emmett L. Brown)[1]
Back to the future?
Availing oneself of EU law in the ambit of sports in
1995 must have felt a bit like digging for plutonium, but following the
landmark ruling of the European Court of Justice (ECJ) in the Bosman case[2],
20 years later, with all the buzz surrounding several cases where EU law is
being used as an efficient ammunition for shelling various sports governing or
organising bodies, one may wonder if in 2015 EU law is to be “found in every
drug store” and the recent cases (see inter alia Heinz Müller v 1. FSV Mainz 05, Daniel Striani ao v UEFA, Doyen Sports ao v URBSFA, FIFA, UEFA) [3] cannot
but invitingly evoke the spirit of 1995.
One of the aforementioned cases that also stands out
pertains to the injunction decision[4] issued
on 29 April 2015 by the Regional Court (Landesgericht) in Frankfurt am Main
(hereinafter: the Court) in the dispute between the intermediary company Firma
Rogon Sportmanagement (hereinafter: the claimant) and the German Football
Federation (Deutschen Fußball-Bund, DFB), where the claimant challenged the
provisions of the newly adopted DFB Regulations on Intermediaries (hereinafter: DFB Regulations)[5] for
being incompatible with Articles 101 and 102 TFEU.[6]
The Court, by acknowledging the urgency of the matter stemming from the
upcoming transfer window and the potential loss of clients, deemed a couple of
shells directed at the DFB Regulations to be well-aimed, and granted an
injunction due to breach of Article 101 TFEU.
(Un)harnessing the brokerage in football
The recently adopted FIFA Regulations on Working with Intermediaries (hereinafter: FIFA Regulations)[7]
arguably represent the biggest turning point in the regulation of player and club representation in the history of professional
football.[8]
While some will argue that by implementing these Regulations, FIFA has thrown
in the towel on regulating the ambit of representation in football altogether,
it could be said that by steering away from controlling the access to the
activity and switching the onus on regulating it, FIFA has not
deregulated the activity, but rather shifted the scope of the regulation
itself.[9]
It has been anticipated that the implementation process would expose several contentious issues (e.g. recommended commission cap,
duty of disclosure, representation of minors, suitability of intermediaries,
etc.),[10]
and the DFB’s adoption of the new Regulation has been no exception in that regard.[11]
The DFB, pursuant to Article 1(2) of FIFA Regulations,[12]
and following a rather lengthy exchange of information with the German Football
League (Deutsche Fußballliga GmbH, DFL) and the German Association of Players’
Agents (Deutschen Fußballspieler-Vertmittlervereinigung, DFVV),[13]
adopted the new DFB Regulations on 13 March 2015. By availing itself of the
discretion embedded in Article 1(3) of FIFA Regulations,[14]
the DFB tailor-made its regulations, which entered into force on 1 April 2015,
to a certain extent, which shall be elaborated upon further below.
Since the new DFB Regulations by virtue of paragraphs
2 and 3 of Article 3[15]
indirectly bound the intermediary agencies through binding players and clubs
when entering employment or transfer contracts,[16]
which had not been the case with the pre-existent norms, the claimant first
unsuccessfully sought the annulment of the Regulations directly from DFB.
Subsequently, the claimant sought relief in the form of a temporary injunction
from the Court, based upon the pending imminent danger stemming from the abuse
of the DFB’s dominant position. Such behaviour, according to the claimant,
limited the free choice of profession. Furthermore, according to the claimant,
the obligatory disclosure of the remuneration amounts and the prohibition of
representation remuneration when the player concerned is a minor went way
beyond the borders of necessity and were thus unjustified.[17]
The DFB, on the other hand, by rejecting the existence of a pending danger
since the claimant had allegedly known of the FIFA Regulations for almost a year,
deemed the claim inadmissible due to wrongful recourse to the urgent procedure
(Eilverfahren), and additionally claimed the Articles 101 and 102 TFEU to be
inapplicable, since the addressed provisions did not restrict competition, but au contraire prevented its distortion (i.e. by prohibiting
the abuse of the intermediary activity,
providing for the independence of clubs and players, and guaranteeing transparency
and contractual stability, hence bringing their scope within the borders of
proportionality).[18]
Intermediaries v DFB: 1-0
The DFB’s guerrilla tactics of throwing the sink back
at the claimant screaming for inadmissibility proved rather futile. The Court
deemed the claim to be admissible and also found a large portion of the
claimant’s arguments in the form of EU law-shaped shells to be well-founded.
Subsequently, it granted an injunction as sought from the claimant. It
addressed the issue through the prism of the Article 101 TFEU, and specific
steps in the reasoning shall be dealt with separately below.
Admissibility
as a non-issue
The DFB
argued that such a claim could not be made in the urgent procedure, since the
issue would pertain to the main cause. However, the Court pointed out that such
a claim would be possible under Article 33 of the Act against Restraints of Competition (Gesetz gegen
Wettbewerbsbeschränkungen, GWB).[19]
Refusal of such a claim would deprive the claimant of its rights and legal
remedies, particularly in the light of the pending danger of losing potential
customers (clubs and players), bound directly by the DFB Regulations.[20]
The Court also rejected the claim that the issue pertained to an internal
decision-making process of the DFB, and said that the adoption of the
Regulations had an externally oriented scope and effect.[21]
DFB
Regulations are an inter-state trade restricting decision of an association of
undertakings
The DFB asserted that it could not be seen as an
association of undertakings in the sense of Article 101(1) TFEU considering
that it also includes members with an amateur status. By referring to Piau,[22]
the Court removed any ambiguity pertaining to the status of the DFB saying that:
“...the mere fact that a sports association or federation unilaterally
classifies sportsmen or clubs as 'amateur' does not in itself mean that they do
not engage in economic activities within the meaning of Article 2 EC.”[23] Furthermore,
strengthening its reasoning by first quoting Frubo,[24]
stating that: ”Article 101 TFEU applies
to associations in so far as their own activities of those of the undertakings
belonging to them are calculated to produce the results to which it refers”,[25]
and then BNIC,[26] it seemingly left no doubt as to the
passive standing of DFB.
Having established the DFB’s status as per Article
101(1) TFEU, the Court moved to the DFB Regulations, and by drawing from Bosman,[27]
Lehtonen,[28] and most importantly Piau,[29]
qualified them as a decision of an association of undertakings, since they
entail the regulation of the economic activity of intermediaries, whereby it is
clear “...that the purpose of the
occupation of players' agent, under the very wording of the amended
regulations, is 'for a fee, on a regular basis [to introduce] a player to a
club with a view to employment or [to introduce] two clubs to one another with
a view to concluding a transfer contract'...”,[30] and
therefore this economic activity cannot be qualified as one of a purely
sporting nature.[31]
Albeit steering clear of an explicit reference to CJEU’s
vast jurisprudence, the Court deemed the relevant market to be the one of
intermediary services where the clubs and the players represented the customers
and the intermediaries the providers,[32]
hence following to a large extent the pre-established path in Piau.[33]
It also pointed out that pursuant the provisions of Article 101(1) TFEU the
core of the restriction of competition lied within an agreement (or a decision)
which hampered the independence of economic decision making of the companies
involved in a particular activity. The present case would prove as no exception
since the intermediaries’ ability to provide services would take toll by the
eventual non-submission of the signed declaration when entering an agreement
with a player or a club upon whom loomed the eventual DFB sanctions. In other
words, refusal to declare, which at the same time brought the intermediaries
within the scope of DFB norms, limited the intermediaries’ economic freedom to
be engaged by players or clubs.[34]
Moreover, the Court had little doubts about the
Regulations affecting the inter-State trade. With Bundesliga alone representing
the third largest national club football competition in Europe, the size of the
market itself leads to the conclusion that the decision in question could have
a negative impact on an actual or potential, direct or indirect inter-State
provision of intermediary services, all the more so, since it lead to
partitioning of markets on a territorial basis. In fact, by invoking Wouters,[35]
the Court stressed that: “...it is
sufficient to observe that an agreement, decision or concerted practice
extending over the whole of the territory of a Member State has, by its very
nature, the effect of reinforcing the partitioning of markets on a national
basis, thereby holding up the economic interpretation which the Treaty is
designed to bring about...” [36]
Possible
justifications
Having brought the Regulations within the scope of
Article 101(1) TFEU, the Court promptly looked at the available justifications,
either within the ambit of Article 101(1) TFEU pursuant to the relevant ECJ
jurisprudence, or as one of the explicit Treaty exceptions embedded within
Article 101(3) TFEU. In light of the former provision it is worth pointing out
that the notion of inherence to legitimate (sporting) purposes is crucial in
this ambit, since certain potentially restrictive behaviours (e.g. adoption of
transfer rules), may be, although caught by Articles 101 and 102 TFEU
respectively, exempted from their scope due to their necessity in pursuance of
such objectives. Such an inherent necessity must, however, be assessed on a
case-to-case basis. Following such reasoning, and by referring to the landmark Meca-Medina case,[37]
the Court invoked an almost blasphemous notion in the ambit of EU competition
law by stating that such assessment of legitimate goals under Article 101(1)
TFEU was to be addressed through the “rule of reason” doctrine.[38]
As an alternative route stemming explicitly from the
Treaty, by referring back to Piau,
the Court identified the provisions of Article 101(3) TFEU, which envisage that
the Regulations “might enjoy an exemption
on the basis of this provision if it were established that they contribute to
promoting economic progress, allow consumers a fair share of the resulting
benefit, do not impose restrictions which are not indispensable to the
attainment of these objectives, and do not eliminate competition.” [39]
Summing up, the Court rather curiously, and perhaps
simplistically, pointed out that the common denominator of both approaches
entailed three key components; namely the Regulations would have to pursue a
legitimate goal, and they would have to be necessary and proportionate. As one
such legitimate goal, the Court recognised the issue of necessity to level the
playing field in football competitions through a transfer system and thereof
stemming regulation of the activity of intermediaries in order to prevent
eventual abuses in the form of coerced transfers, and, even more importantly,
to protect the minors involved in the process.[40]
Both parties recognised the existence of past abusive practices that needed to
be eradicated. Regardless of the legitimacy of the majority of the aims
pursued, the Court established that certain provisions lacked the needed
necessity and were disproportionate, as shall be addressed below.[41]
Individual
(un)successful claims
Firstly, the Court deemed the registration obligation
for clubs and players, which would bring the intermediaries within the scope of
DFB and FIFA rules, to be disproportionate. While the registration and
declaration obligations as such could be justified, the same could not be said for
the pertaining subsumption of the intermediary service under the overarching
umbrella of the DFB rules. The disproportionate full submission to DFB rules,
which would strip the intermediaries of their possibility of recourse to
ordinary justice, could be just as effectively replaced by a proper enforcement
by the DFB of the registration rules themselves. Moreover, the Court found it
unclear why the DFB would not be able to safeguard the goals pursued by the DFB
Regulations before ordinary courts. [42]
Unlike the registration obligation, the duty to submit
a criminal record along with the duty to pay a registration fee were seen as
justified and thus proportionate in the eyes of the Court. Due to a potentially
large impact of the intermediary activity on competition stemming from the
potential influence on players and clubs, no less restrictive measure other
than a registration duty could be put in place in order to safeguard the
transparency of the football leagues. Moreover, considering the utmost
necessity to protect the minors, the duty to submit a criminal record is clearly
justified. Since the intermediaries financially benefit from their activity,
the pertaining registration fee could also be deemed as a proportionate
measure.[43]
The third addressed measure, i.e. the remuneration
disclosure requirement, was also seen as justified by the Court. The legitimate
aims set out in the previous paragraph were also to be pursued through the
disclosure of agreements entered into and remuneration paid to the
intermediaries. Such measures represented suitable means for controlling the
intermediaries’ behaviour and were thus necessary and proportionate.[44]
The same can be said of the prohibition of acceptance
of intermediary transfer fees for future transfers. In this context, the premature
termination of contracts between clubs and players represented a major incentive
for the intermediaries and at the same time a major source of revenue for
clubs. The possibility of claiming a share of the transfer fees would therefore
draw the intermediaries into seeking actively an early contract termination, as
the new Regulations’ provisions were aimed at preventing such external
influence, they are considered justified and proportionate.[45]
Fifthly, the imposition of flat-rate transfer fees was
deemed unjustified by the Court, since it prohibited the agreed fee to be
expressed in percentage pertaining to the cumulative transfer sum. This reinforced
doubts that had previously been expressed about the
proportionality of the parent FIFA Regulations provision, namely Article 7. Contrary
to DFB’s arguments that such a scheme only required an a priori determination of the fee, the Court was not of the opinion
that such a restrictive interpretation was appropriate, and that it could also
lead to interpreting the provision in the way to detach the flat-rate fee
entirely from the transfer sum. In other words, clubs would only be allowed to
pay a prefixed amount that could not be expressed in percentage of the entire
transfer sum. The Court also had doubts as to how such a restriction would
serve the previously mentioned purposes.[46]
Last but not least, the Court also found the
prohibition of remuneration of intermediaries of minors having the status of
licensed players to be unjustified and disproportionate. By refusing the DFB’s
argument to draw parallels with legal representation, the Court rather focused
on the potential vulnerability of minors and their susceptibility to influence
from the intermediaries, making this the crucial argument for
(non)justification of the prohibition.[47]
Stressing the legitimacy of a special protection of minors, who would due to
their age and consequent inexperience rely heavily on the advice of the
intermediaries, it also drew the line between the players plying their trade in
the first and second league (licensed players) and others who participated in
lower leagues. In the latter case a particular attention ought to have been
given to minors brought to Germany from abroad.[48]
It was only obvious, according to the Court, that minors playing in the lower
leagues should benefit from a higher level of protection due to their stronger
economic dependency to the intermediaries and hence susceptibility to their
instructions. Minor licensed players, however, due to their market position
alone warrant no such protection. Moreover, the significant disproportion of
the amount of money spent on transfer fees for licensed minors makes such a
prohibition in this ambit even more restrictive.[49]
Summed up, the Court deemed three out of six of the claimant’s
legal missiles to have hit their target. First, the intermediaries may still be
registered with the DFB without subjecting to its authority. Second, the
prohibition of flat-rate transfer fees was unjustified, and third, the
prohibition of remuneration of intermediaries of licensed minor players also
exceeded the borders of necessity.[50]
Since an injunction decision required an imminent and pending danger to be
substantiated, as anticipated above, the Court circumvented the DFB’s argument that
the claimant had almost a year, hence enough time, to get acquainted with the
Regulations, by saying that Article 1(2) of the FIFA Regulations merely
provided a minimum compulsory basis to be implemented, and that the DFB adopted
substantially different Regulations pursuant Article 1(3) of the FIFA Regulations,
leaving significantly less time for the claimant to comply.[51]
The reference to previous FIFA Regulations met the same end, since the former
pertained only to natural and not to legal persons.[52]
Side-stepping
Article 102 TFEU?
While the Court went to significant depths when
analysing the case through the prism of Article 101 TFEU, it quite surprisingly
almost completely refused to be drawn into the assessment of the matter through
Article 102 TFEU, despite admitting, hence quite possibly just elegantly
restating Piau,[53] to a possible existence of a collective
dominant position by the DFB and its related associations on the market of intermediary
service provision.[54]
It merely concluded that there was no abuse in the sense of Article 102 TFEU.[55]
One may find this curious at the very least, since the Court itself stated that
DFB imposed its rules on non-members, intermediaries in this case, through
economic pressure stemming from its monopolistic position on the market in question,
which could to a certain extent at least be deemed as abusive.[56]
The epilogue or merely the end of Round One?
With the battle dust temporarily subsided, the DFB has
seemingly complied with the Court’s injunction decision by issuing a note in which it restated the judgment’s tenor and
informed the interested parties (intermediaries) of an ongoing possibility of a
non-binding registration with DFB. The truce may only be a temporary one
though, since the DFB has through its president already announced to pursue the
matter in the main proceedings and a battle won does not necessarily mean that the
war has been won.[57]
Regardless of the outcome in Germany though, the issue carries a larger relevance.
Since some of the DFB Regulations provisions, addressed in the hitherto
analyzed injunction decision, resemble to a large extent if not entirely those
embedded in the FIFA Regulations (e.g. the suspended Article 7(7) of DFB
Regulations and Article 7(8) of FIFA Regulations),[58] one may
wonder if, considering the already pending complaint of the of the Association
of Football Agents (AFA) to the Commission,[59] legal
challenges of the intermediaries regulations in other countries may only be a
matter of time. Especially, since apparently these days EU law conveniently
happens to be “available in every drug store”.
[1] R.
Zemeckis, B. Gale, Back to the Future (Universal Pictures, 1985).
[2] Case
C-415/93, Union royale belge des sociétés de football association ASBL v
Jean-Marc Bosman ao, [1995] ECR I-04921.
[3] See inter
alia Case AZ: 3 Ca 1197/14, Heinz Müller v 1. FSV
Mainz 05, Arbeitsgericht Mainz, 19 March 2015 ; Case
2013/11524/A, Daniel Striani ao v UEFA, Tribunal de première
instance francophone de Bruxelles, Section Civile, 29 May 2015.
[4] Case
Az. 2-06 O 142/15*, Firma Rogon
Sportmanagement v Deutschen Fußball-Bund (DFB), Landgericht Frankfurt am
Main, 29 April 2015.
[5]
DFB-Reglement für Spielvermittlung, adopted on 13 March 2015.
[6] Treaty on the Functioning of the European
Union (TFEU), Consolidated Version, O.J. 2012, C326, 26 October 2012 and
as amended by the Croatian Accession Treaty, O.J. 2012, L112/1.
[7] FIFA
Regulations on Working with Intermediaries, adopted in Zürich on 21 March 2014.
[8] D. Lowen, A guide to the FA’s Regulations on Working with Intermediaries
(www.lawinsport.com, 17 February 2015), <http://www.lawinsport.com/articles/item/a-guide-to-the-fa-s-regulations-on-working-with-intermediaries>.
[9] D. Lowen, FIFA’s
Regulation on Working with Intermediaries (T.M.C. Asser Instituut – Summer
Programme, 30 June 2015), pp. 2.
[10] N. De
Marco, The new FA Intermediaries
Regulations & disputes likely to arise (www.lawinsport.com, 31 March
2015),
<http://www.lawinsport.com/articles/item/the-new-fa-intermediaries-regulations-disputes-likely-to-arise>.
[11]
Focus, Streit mit DFB: Gericht gibt
Spielervermittler in Teilen Recht (www.focus.de, 30 April 2015),
<http://www.focus.de/regional/frankfurt-am-main/fussball-streit-mit-dfb-gericht-gibt-spielervermittler-in-teilen-recht_id_4650008.html>.
[12] Article
1(2) FIFA Regulations, cited supra
note 7: ”Associations are required to
implement and enforce at least these minimum standards/requirements in
accordance with the duties assigned in these regulations, subject to the
mandatory laws and any other mandatory national legislative norms
applicable to the associations. Associations shall draw up regulations that
shall incorporate the principles established in these provisions.”
[13] Rogon v DFB, cited supra note 4, paras. 15-16.
[14] Article
1(3) FIFA Regulations, cited supra
note 7: “The right of associations to go
beyond these minimum standards/requirements is preserved.”
[15] Arts.
3(2), 3(3) DFB-Reglement für Spielvermittlung, cited supra note 5.
[16] Rogon v DFB, cited supra note 4, paras.
16-17: “Mit dieser Erklärung erkennt der
Vermittler das Reglement auch für sich als verbindlich an und unterwirft sich
damit der Verbandshoheit des Antragsgegners einschliesslich der
Sportgerichtsbarkeit.”
[17]
Ibid., para. 19.
[18]
Ibid., paras. 32-39.
[19] Gesetz gegen
Wettbewerbsbeschränkungen (GWB), (BGBl. I S. 1554),
26.07.2011.
[20] Rogon v DFB, cited supra note 4, paras. 43-45.
[21] Ibid.,
para. 46.
[22] Case
T-193/02, Laurent Piau v Commission, [2005] ECR II-00209, para. 70.
[23] Rogon v DFB, cited supra note 4, para. 50.
[24] Case
71/74, Nederlandse Vereniging voor de fruit- en groentenimporthandel,
Nederlandse Bond van grossiers in zuidvruchten en ander geimporteerd fruit
"Frubo" v Commission, [1975] ECR 00563, para. 17.
[25] Rogon v DFB, cited supra note 4, para. 51.
[26] Case
123/83, Bureau national interprofessionnel du cognac (BNIC) v Guy Clair,
[1985] ECR 00391, para. 17.
[27] Bosman, cited supra note 2, para. 127.
[28] Case
C-176/96, Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL v
Fédération royale belge des sociétés de basket-ball ASBL (FRBSB), [2000]
ECR I-02681, paras. 53-60.
[29] Piau, cited supra note 22, para. 73: “As
regards, second, the concept of a decision by an association of
undertakings...This is therefore an economic activity involving the provision
of services, which does not fall within the scope of the specific nature of
sport, as defined by the case-law.”
[30] Ibid.
[31] Rogon v DFB, cited supra note 4, paras.
52-53.
[32]
Ibid., para. 55.
[33] Piau,
cited supra note 22, paras. 112-115.
[34] Rogon
v DFB, cited supra note 4, paras. 57-58.
[35] Case
C-309/99, J.C.J. Wouters ao v Algemene Raad van de Nederlandse Orde van
Advocaten, [2002] I-01577, para. 95.
[36] Rogon v DFB, cited supra note
4, paras. 59-61.
[37] Case C-519/04 P, David Meca-Medina and
Igor Majcen v Commission, [2006] ECR I-06991.
[38] Rogon
v DFB, cited supra note 4, paras. 63-64.
[39] Piau,
cited supra note 22, paras. 100-104.
[40] Rogon
v DFB, cited supra note 4, paras. 66-68.
[41]
Ibid., paras. 69-70.
[42]
Ibid., paras. 72-73.
[43]
Ibid., paras. 75-78.
[44]
Ibid., para. 80.
[45]
Ibid., paras. 83-84.
[46]
Ibid., paras. 86-87.
[47]
Ibid., paras. 89-91.
[48]
Ibid., para. 93.
[49]
Ibid., para. 94: “Für die Vermittlung von
Lizenzspielern ist eine derartige Beschränkung allerdings unverhältnismäÿig.
Lizenzspieler der ersten und zweiten Bundesliga sind nicht in dem Masse
schutzbedürftig wie Vertragsspieler der unteren Ligen.”
[50] Handelsblatt,
Gericht gibt Spielervermittler teils
recht (www.handelsblatt.com, 30 April
2015),<http://www.handelsblatt.com/sport/fussball/streit-mit-dfb-gericht-gibt
spielervermittler-teils recht/11716170.html>.
[51] Rogon
v DFB, cited supra note 4, para. 104.
[52]
Ibid., para. 105.
[53] Piau, cited supra
note 22, paras. 117-118
[54] Rogon v DFB, cited supra note 4, paras. 98-99.
[55] Rogon
v DFB, cited supra note 4, para. 100.
[56]
Ibid., para. 96: “Hier geht es
jedoch darum, dass die Antragsgegnerin aufgrund ihrer Monopolstellung Dritte
faktisch in die Verbandsherrschaft zwingt, indem sie Verbandsangehörige mit
Sanktionen bedroht, sollten diese nicht auf die Antragstellerin im Sinne einer
Zustimmung zur Vermittlererklärung einwirken. Insofern fehlt es an der freiwilligen
Unterwerfung; es handelt sich vielmehr um eine durch wirtschaftlichen Druck
erzwungene Unterwerfung eines nicht verbandsangehörigen Dritten.”
[57] Hamburger
Abendblatt, Landgericht bestätigt
teilweise neue Spielerberater-Regeln (www.abendblatt.de, 30 April 2015),
<http://www.abendblatt.de/sport/article205286615/Landgericht-bestaetigt-teilweise-neue-Spielerberater-Regeln.html>.
[58] Article
7(8) FIFA Regulations, cited supra note 7: “Players and/or
clubs that engage the services of an intermediary when negotiating an
employment contract and/or a transfer agreement are prohibited from making any
payments to such intermediary if the player concerned is a minor ...”
[59] D. Lowen, cited
supra, note 8.