Editor's note: Ben Van Rompuy, Head of the ASSER International Sports Law Centre, was recently interviewed by LexisNexis UK for their in-house adviser service. With kind permission from LexisNexis we reproduce the interview on our blog in its entirety. 

How does competition law affect the sports sector?  

The application of EU competition law to the sports sector is a fairly recent and still unfolding development. It was only in the mid-1990s, due to the growing commercialization of professional sport, that there emerged a need to address competition issues in relation to, for instance, ticketing arrangements or the sale of media rights.  

Apart from the evident link between competition law and commercial activities related to sport, competition law also has a vital role to play in relation to the regulatory aspects of sport. Most markets for the organization of sports events are a textbook example of monopolistic markets. As a result, sports associations exercise pure monopsony power: athletes have no choice but to accept unilaterally imposed restrictions. Albeit limited to case-by-case inquiry, competition law is thus a meaningful instrument to curb the otherwise unfettered private regulatory power of sports associations. Unfortunately, it remains underutilized. Only a handful of international sports federations have truly experienced the “Bosman effect” and faced scrutiny of their regulatory activity under the EU antitrust rules.   

Have there been any important sports-related antitrust cases in recent years? 

Not at the EU level. Regarding commercial activities, the latest case dates from 2006, namely the Commission’s commitment decision on the joint selling of the Premier League media rights. And after some politically difficult uphill battles around the 2000s against FIFA and the International Automobile Federation the European Commission has been extremely reluctant to intervene in regulatory matters. Lasts year’s rejection of the complaint against UEFA’s Financial Fair Play Rules was the latest “achievement”. In the last few months, however, the Commission has received a number of new interesting complaints. 

Since the decentralization of EU antitrust enforcement in 2004, National Competition Authorities have addressed more than 40 decisions concerning the joint selling of sports media rights. For the most part, the remedy package designed by the Commission has been replicated, but there are some differences: the more widespread use of a “no single buyer” obligation and the acceptance of exclusive rights contracts exceeding three years. 

Regarding regulatory aspects, a string of recent national cases have challenged rules that disproportionally restrict athlete participation in events not organized and promoted by the official federation, notably in smaller sports such as motor sport, horseracing and bodybuilding (Ireland, Italy, Sweden). What characterizes these cases is that the remedial action was purely national in scope. In Germany, by contrast, two exploitative abuse cases are making their way up through the courts that have the potential of becoming important EU-wide precedents. Both are concerned with unfair trading conditions – a rarity these days: mandatory arbitration clauses (International Skating Union) and rules concerning the mandatory release of players to the national team without compensation (International Handball Federation).  

What other aspects of competition law are important in the sporting context? 

The State aid rules are the last unexplored frontier. For decades, national and regional public authorities have directly or indirectly financed sports organisations, sports infrastructure or individual clubs, but these measures have blissfully remained under the radar of EU State aid control. Yet in the last four years, the number of complaints against alleged unlawful State aid to professional sport, mostly football clubs, has been rising. Interestingly, citizens filed most of these complaints. 

With the enactment of the new Block Exemption Regulation and several formal decisions on for instance Belgian, French, German, and Swedish State aid for the construction and renovation of stadiums, the Commission has developed a coherent set of principles for infrastructure funding. The most complex cases are still pending. They concern land swaps/sale of State property (Spain, the Netherlands), tax advantages (Spain), and bank loans, guarantees or debt waivers (Spain, the Netherlands). The beneficiaries include top clubs like Real Madrid and Barcelona so the decisions are bound to attract huge media interest. 

Are there likely to be any developments in the future? 

Competition problems related to the sale of sports media rights will continue to arise at the national level. Public authorities will inevitably face stricter State aid control when supporting professional sports. State aid control could also be an effective instrument to put an end to the practice that selective tax exemptions for UEFA, FIFA, the IOC, etc. are a condition for applications to host international sporting events. 

The European Commission is currently examining a new complaint against FIFA’s ban on third-party ownership of players’ economic rights (TPO) in football and one concerning FIFA’s new regulations for player’s agents. These could result in high-profile cases. 

I do hope that the Commission will reclaim its responsibility for ensuring that rules and practices of international sports associations comply with EU competition law, particularly when athletes lodge complaints. National competition authorities lack the political power to confront international federations. And for most athletes, the possibility of private enforcement is not a real alternative given clauses barring access to national courts, the costs and the length of proceedings. For example, I am currently advising two Dutch Olympic speed skaters whose faith lies entirely in the hands of the Commission. They filed a complaint against the International Skating Union, who threatens them with a lifelong ban if they would participate in lucrative events outside the official calendar. The European Parliament has urged the Commission to open a formal investigation so we are optimistic that the Commission will take its responsibility and handle this case.  

What should lawyers in this field advise their clients? 

It is all about justifications. What you often see is that, in an attempt to shield certain practices from competition law scrutiny, much effort is put into arguments that, for example, sports associations or clubs are not “undertakings”. And only when these fail, recourse is made to underdeveloped arguments about the specificity of sport. Yet the true test lies here: are the restrictive effects reasonably necessary for the organization and proper conduct of sport? This obviously necessitates a good understanding of the sports sector and its internal dynamics. Even more so because competition authorities and courts typically give considerable deference to the legitimate role and expertise of sports associations in regulating their competitions.  

Given that most sports-related antitrust cases are now being addressed at the national level, there is a strong need to learn and draw from this decisional practice and case law. I am currently developing a database that reports and comments on all these cases, which should be a useful resource for those advising clients in the sports world.

After the success of this year’s World Cup in Brazil, FIFA President Sepp Blatter can start concentrating on his Presidential campaign for next June’s FIFA elections. Even though the 78-year old Swiss is not officially a candidate yet, he is still very popular in large parts of the world, and therefore the favourite to win the race. Nonetheless, even for the highly experienced Mr. Blatter these elections will be different. All candidates will have to respect the newly introduced Electoral Regulations for the FIFA Presidency. 

The Electoral Regulations are the latest addition to the reform process FIFA initiated more than two years ago following the controversial awarding of the 2018 and 2022 World Cups to Russia and Qatar. The stated aim of the Regulation is to make the elections more transparent, democratic and to prevent possible corruption accusations.[1] Its legal basis is found in Article 24(4) of the 2013 FIFA Statutes and reads as follows:

“The conditions to be observed during a candidature for the office of President are stipulated in the Electoral Regulations for the FIFA Presidency. These regulations shall be issued by the Executive Committee.”

Earlier editions of the FIFA Statutes did not include a reference to electoral regulations. In comparing the 2013 Statutes with the 2010 Statutes used for the previous elections one can witness the extent of this dramatic change. Pursuant to Article 24 of the 2010 edition, “only the Members[2] may propose candidatures for the office of FIFA President. Members shall notify the FIFA general secretariat in writing in the name of a candidate for the FIFA presidency at least two months before the date of the Congress.” Furthermore, “the general secretariat shall notify the Members of the names of proposed candidates at least one month before the date of the Congress.” Other criteria regarding the eligibility of candidates were not included.

The first fundamental change to take place at the 2015 election will be the setting up of an Ad-hoc electoral Committee pursuant to Article 7(1) Electoral Regulations. The Ad-hoc Electoral Committee shall be composed of the chairman of the FIFA Disciplinary Committee, the chairman of the FIFA Appeal Committee and the chairman of the FIFA Audit and Compliance Committee[3] and shall assess whether a candidate meets the profile specifications provided for by the eligibility criteria stipulated in Article 13 of the Electoral Regulations and Article 24 of the FIFA Statutes.[4]

The second fundamental change is that, in accordance with article 13(1), Candidates for the office of President must meet the following requirements:

1. The candidate shall have played an active role in association football (as a board member, committee member, referee and assistant referee, coach, trainer and any other person responsible for technical, medical or administrative matters in FIFA, a Confederation, Association, League or Club or as a player) for two of the last five years before being proposed as a candidate (cf. art. 24 par. 1 of the FIFA Statutes).

2. The candidate shall have been proposed by a member association in accordance with art. 24 par. 1 of the FIFA Statutes.

3.  The candidate shall present declarations of support from at least five member associations (cf. art. 24 par. 1 of the FIFA Statutes). Being proposed as a candidate by a member association shall be understood as a declaration of support. Each member may only present a declaration of support for one person. If a member association presents declarations of support for more than one person, all its declarations shall become invalid.

The flowchart below summarises the key procedural steps set out in the Electoral Regulations:

Has the Presidential campaign already begun?

The Presidential campaign has already started due to the fact that one person has declared himself a candidate. This person is neither Mr. Blatter nor “Europe’s favourite” Michel Platini, but former FIFA official Jérôme Champagne. Mr. Champagne, who is personally funding his own campaign, has stated that he has received the support of at least five Member Associations and that the FIFA general secretariat has been notified of his candidature. Details on which Member Associations support the Frenchman remain undisclosed.

During the last FIFA Congress that took place in Sao Paulo in June this year, the Ad-Hoc Electoral Committee was also set up consisting of Mr. Domenico Scala (ltaly), chairman of the FIFA Audit and Compliance Committee, Mr. Claudio Sulser (Switzerland), chairman of the FIFA Disciplinary Committee, and Mr. Larry Mussenden (Bermuda), chairman of the FIFA Appeal Committee. The next step would be for the Ad-hoc Electoral Committee to forward the proposed candidature of Jérôme Champagne to the Ethics Committee pursuant Article 15(10) of the Electoral Regulations.

As stated above, Sepp Blatter is not yet a candidate, but it is expected that he will run for a fifth consecutive term in office. Interestingly enough, in accordance with Article 2(2) of the Electoral Regulations, “if a person engages in campaign or similar activities that give the appearance that he is a candidate, the Ad-hoc Electoral Committee or, if the Ad-hoc Electoral Committee has not yet been constituted, the FIFA Secretary general, shall give him a deadline of ten days to formally state his intention of becoming a candidate. This shall also apply for the incumbent FIFA President. Blatter hinted several times this year that he is thinking about running for President again. Nonetheless, it appears that the rule stipulated in Article 2(2) has not been applied to him (yet). With regard to the possible third candidate, Michel Platini has said that he is considering becoming a candidate and promised to make a decision by the draw for the Champions League on 28 August. 

Could the new Election Regulations jeopardise Mr. Blatter’s possible re-election ambitions?

Given that Blatter still enjoys widespread support in the “football family”, he should have no problem securing the declarations of support from five different Members. As regards the integrity check, it is worth noting that Sepp Blatter has never been personally accused of corruption. True, there has been a lot of controversies at FIFA under his watch (Qatar2022 is the latest and most acute one) and questions can be raised whether an 80-year old is the ideal candidate to run one of the world’s most important Sporting Governing Bodies for the next four years.  

Conclusion

Whether the new Election Regulations will make next year’s election more transparent and democratic will mostly depend on how they will be applied during the unfolding campaign and elections. Will Blatter’s double game as a candidate and FIFA President be closely scrutinized? On what basis and to which extent will the Ethics Committee review the candidatures? Even if the electoral regulations appear to have some teeth in practice, further reforms will still be necessary to improve FIFA’s legitimacy. One can, and Jérôme Champagne has in fact suggested it, imagine public debates between the candidates to be broadcasted worldwide. Furthermore, one should envisage that the vote must be held publically and that the number of terms as FIFA president must be restricted. There is a lot to do before FIFA could be considered, as far as it is even possible, a “democratic” organisation, but the sheer fact of having electoral regulations is already a step in the right direction.

P.S. At the beginning of July Jérôme Champagne visited the Asser institute and presented his program for the upcoming FIFA Presidential elections 2015. The video is available at:

[1] http://www.insideworldfootball.com/fifa/15040-fifa-lays-out-rules-of-engagement-in-the-battle-for-the-presidency.

[2] Member: an Association which is responsible for organising and supervising football in all of its forms in its Country that has been admitted into membership of FIFA by the Congress.

[3] Electoral Regulations for the FIFA Presidency, Article 7(2)

[4] Electoral Regulations for the FIFA Presidency, Article 8(1)d)