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The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 1 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.*

 

1. Introduction.

The so-called specificity of sport represents one of the most debated, if not the most debated, but still undefined issue under European Union (EU) law. A noteworthy peculiarity is that the specificity of sport is frequently mentioned in several legislative and political documents issued by EU institutions, however it is not expressly referred to in any judgment by the European Court of Justice (ECJ).Conversely, the Court of Arbitration for Sport (CAS) case-law on Art. 17 of FIFA Regulations on status and transfer of players (RSTP) has repeatedly and expressly referred to the specificity of sport.[1] Apparently, the concept of specificity of sport has different meanings and purposes in the ECJ and CAS jurisprudence. In this blog (divided in two parts), I will try to analyse those two different meanings and to what extent the CAS case-law is consistent with the concept of specificity of sport as elaborated under EU law.

 

2. The specificity of sport under EU law.

The concept of the specificity of sport is mentioned in several documents issued by the EU institutions. In the Helsinki Report on Sport (1999), it is affirmed that ‘the application of the Treaty's competition rules to the sporting sector must take account of the specific characteristics of sport, especially the interdependence between sporting activity and the economic activity that it generates, the principle of equal opportunities and the uncertainty of the result’. According to the Declaration of Nice, (2000) ‘even though not having any direct powers in this area, the Community must, in its action under the various Treaty provisions, take account of the social, educational and cultural functions inherent in sport and making it special, in order that the code of ethics and the solidarity essential to the preservation of its social role may be respected and nurtured’.

However, neither the Nice Declaration nor the Helsinki Report contains a clear definition of the specificity of sport: the Helsinki Report simply lists some specific characteristics of sports activities that are particularly important in the field of antitrust law, whereas the Nice Declaration identifies the specificity of sport with the social, educational and cultural functions inherent in sport. The same applies to the White Paper on Sport (2007), where it is stated that ‘sport has certain specific characteristics, which are often referred to as the “specificity of sport”’. According to the White Paper, the specificity of sport can be approached through two prisms: ��the specificity of sporting activities and of sporting rules, such as separate competitions for men and women, limitations on the number of participants in competitions, or the need to ensure uncertainty concerning outcomes and to preserve a competitive balance between clubs taking part in the same competitions; the specificity of the sport structure, including the autonomy and diversity of sport organisations, a pyramid structure of competitions from grassroots to elite level and organised solidarity mechanisms between the different levels and operators, the organisation of sport on a national basis, and the principle of a single federation per sport’.

Axiomatically, the White Paper tried to draw a distinction between the specificity of sporting rules  and the specificity of sporting structure The Commission’s effort is certainly commendable, except for two aspects:

a) on the one hand, the Commission does not offer a clear definition of the specificity of sport and instead has just highlighted some features of the specificity of sport in the EU context;

b) on the other hand, some of these features are rather questionable and deserve to be discussed in more detail. For example, separate competitions for men and women. What is the EU legal basis for not allowing Serena Williams to play the final of Wimbledon against Novak Djokovic? Similarly, as regards the competitive balance argument, we can all agree that it is good, but no one can truly define a ‘balanced’ competition. So, if we do not know how much competitive balance is needed, how can we say that it is always good?

More recently, Art. 165 TFEU states that ‘the Union shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport’. Again, the specificity of sport is only mentioned, but not defined. Lastly, the report Mapping the specificity of sport by the European Commission – Directorate-General for Education and Culture (2016) says that ‘the specificity of sport refers to the inherent characteristics of sport which set it apart from other economic and social activities’.

It follows from the foregoing that under EU sports policy, all the institutions agree on the fact that sport is special, in the sense that it is different from any other activity because of its social and educational dimension. That said, if one tries to translate this concept into a definition to be applied in concrete cases it is impossible to find a common benchmark.

 

3. The specificity of sport in the case law of the ECJ

In terms of EU case-law, the situation is even more difficult, given the ECJ has never defined the notion of specificity of sport. Rather, the Court of Justice has always indirectly dealt with the specificity of sport in terms of a general rule and its (even more general and not defined) exceptions. Since the Walrave ruling, the ECJ has always stated that ‘the practice of sport is subject to Community [now European] law only in so far as it constitutes an economic activity’ (the rule); however at the same time is has also stated that the prohibition of any discrimination based on nationality ‘does not affect the composition of sport teams, in particular national teams, the formation of which is a question of purely sporting interest and as such has nothing to do with economic activity’ (the exception). The Walrave judgment (and subsequent ECJ case-law) shows that from the very beginning the common idea had been that sporting rules relating to purely sporting issues were as such, not subject to EU law and were known as purely sporting rules.

From a legal point of view, the notion of purely sporting rules is unclear. Through case law however, the ECJ managed to translate the concept of purely sporting rules into a workable tool to distinguish which rules are subject to EU law and which were not. In this context, it was possible to say that the purely sporting rules and the specificity of sport were two sides of the same coin. In other words, sport was not special because it was subject to EU law, but at the same time, it was special because some sporting rules were outside the scope of the Treaty.

This situation totally changed after the Meca Medina judgment by the ECJ. In order to contextualise the relevance of the Meca Medina case, it is worth recalling that the case was about the allegedly anticompetitive nature of the antidoping rules of the International Olympic Committee (IOC).

During the first round before the General Court, the judges stated that purely sporting rules may have nothing to do with economic activity, such that they do not fall within the scope of provisions on the free movement of people. Consequently, they have nothing to do with the economic relationships of competition, with the result that they also do not fall within the scope of Arts. 81 and 82 EC [now Arts. 101 and 102 TFEU]. Since the prohibition of doping is based on purely sporting considerations, it follows that it has nothing to do with any economic considerations. Thus, antidoping rules cannot come within the scope of the Treaty provisions on the economic freedoms and, in particular, of provisions on the free movement of people and competition.

Though according to the ECJ, the reasoning of the General Court amounted to a mistake in law. In its judgement, the ECJ underlined that ‘the mere fact that a rule is purely sporting in nature does not have the effect of removing from the scope of the Treaty the person engaging in the activity governed by that rule or the body which has laid it down. If the sporting activity in question falls within the scope of the Treaty, the conditions for engaging in it are then subject to all the obligations which result from the various provisions of the Treaty. It follows that the rules which govern that activity must satisfy the requirements of those provisions, which, in particular, seek to ensure freedom of movement for workers, freedom of establishment, freedom to provide services, or competition. Therefore, even if those rules do not constitute restrictions on freedom of movement because they concern questions of purely sporting interest and, as such, have nothing to do with economic activity, that fact means neither that the sporting activity in question necessarily falls outside the scope of Articles 81 EC and 82 EC nor that the rules do not satisfy the specific requirements of those articles. In such a context, account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives and are proportionate to them’.

Though not explicitly stated in the ruling, the traditional approach based on the distinction between purely sporting rules and economic rules was openly denied by the ECJ and the notion of purely sporting rules expelled from EU law. Moreover, the new solution adopted by the ECJ does not simply amount to a terminological change; Consequently, any sporting rule is now subject to EU law per the Meca Medina judgment. Further, in cases where a sporting rule is challenged based on competition law, we must apply the Wouters test to assess the compatibility of the rule with EU law.Then in cases where a sporting rule is challenged on the basis of free movement principles, we must apply the Gebhard test to assess the compatibility of the rule with EU law. Although slightly different, these two tests require assessing the overall context of the rule, the objectives of the rule, if and to what extent the rule is able to attain each objective, and the proportionality of the rule.

The Meca Medina jurisprudence was later also endorsed by the Commission: in the White Paper on Sport, it stated that ‘in respect of the regulatory aspects of sport, the assessment whether a certain sporting rule is compatible with EU competition law can only be made on a case-by-case basis, as recently confirmed by the European Court of Justice in its Meca-Medina ruling. The Court provided a clarification regarding the impact of EU law on sporting rules. It dismissed the notion of “purely sporting rules” as irrelevant for the question of the applicability of EU competition rules to the sport sector. The Court recognised that the specificity of sport has to be taken into consideration in the sense that restrictive effects on competition that are inherent in the organisation and proper conduct of competitive sport are not in breach of EU competition rules, provided that these effects are proportionate to the legitimate genuine sporting interest pursued. The necessity of a proportionality test implies the need to take into account the individual features of each case. It does not allow for the formulation of general guidelines on the application of competition law to the sport sector.’

The new approach raises two fundamental problems:

a) the Wouters test as well as the Gebhard test apply to all sectors of the economy: they apply to goods as well as to services, to lawyers as well to sportspeople. Consequently, if the specificity of sport is taken into account based on the same rules and the same exceptions provided for any other type of economic activity, it follows that sport is no less special under EU law than one may think. Sport is deemed to be special, but sports matters are governed by the same legal tests applied in other economic sectors.

b) according to the Meca Medina judgment, the Court of Justice has the right to assess the proportionate character of any sporting rule allegedly in contrast with EU law. For example, rules relating to penalties in doping cases, rules of the game and rules relating to nationality requirements to be selected for national teams. Undoubtedly, in such cases the ECJ will state that the objectives of these rules are legitimate.

Unfortunately, the same is not true for whether these rules are proportionate. In other words, the simple idea that the ECJ has the right to assess the proportionality of a rule fixing the number of players on the field of play means that sport is no longer special under EU law.  It is important to  remember that in the Meca Medina case, the ECJ ruled that the anti-doping rules at issue were not disproportionate only because the plaintiffs did not plead that the penalties were excessive. What may have happened if the plaintiffs had contested the proportionality of these penalties? Can one be certain that the ECJ has the competence to  decide whether a two-year penalty for doping is/is not proportionate? Does the specificity of sport really require this?


* Associate Professor of EU law and EU sports law, University of Bergamo (Italy); Attorney-at-law; CAS arbitrator. The views, thoughts, and opinions expressed in the text belong solely to the author.

[1] See M. Colucci, The specificity of sport and the employment relationship of athletes, R. Blanpain, F. Hendrickx (eds.), Labour Law between Change and Tradition: Liber Amicorum Antoine Jacobs, 2011, Kluwer Law International BV, The Netherlands.

 

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