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After the Court of Justice of the European Union’s December ruling, the last thing FIFA and UEFA want is to have a fragmentation of mini-regulations imposed by courts all over the EU, Dr Assimakis Komninos writes.
“Tucked away in the fairy-tale Grand Duchy of Luxembourg”, as a commentator once put it, the Court of Justice of the European Union (CJEU) is the unsung hero of European integration.
When it comes to sports, the CJEU is like a sleeping giant. Every three decades, the court will wake up and upend the way we play and enjoy our favourite sports. Then, there will be a period of hibernation until the next eruption.
The previous shock was on 15 December 1995, when the CJEU adopted the Bosman ruling which reshaped European football — in my personal view, for the worst.
Twenty-eight years later, on 21 December 2023, we had the next shock. The Court this time delivered a crushing defeat for FIFA and UEFA in the European Super League case.
We also had two more judgments on the same day, Royal Antwerp Football Club and International Skating Union, which completed the picture and that picture is now bleak for sports federations.
The Court’s rulings will have profound consequences on almost all other sports and their organisation.
Lots of cases and complaints that are currently pending before the Directorate-General for Competition (DG COMP) at the European Commission will now acquire momentum — to the horror of the officials — and I am sure there will be a huge wave of new preliminary references on similar questions on every sport you can imagine.
What is the case about?
More seriously, what is the European Super League case about? The Court held that the FIFA and UEFA rules making any new interclub football project, such as the Super League, subject to their prior approval, and prohibiting clubs and players from playing in those competitions, are unlawful.
In essence, the role and powers of FIFA and UEFA are at stake.
The CJEU thought it needed to check these powers. The Court did so by relying predominantly on the competition rules of the Treaty for the Functioning of the European Union (TFEU). And it did so through three strikes.
The first strike is the deconstruction of Article 165 of the TFEU about the special status of sports.
The Court essentially held that Article 165 has no “teeth” and cannot justify conduct that falls foul of the competition or the four freedoms rules.
So those who had placed their bets on this provision, which was introduced by the Treaty of Lisbon precisely to please the sports bodies, will be disappointed.
The second strike is the finding that FIFA, UEFA and their member associations are “undertakings” in the sense that they perform economic activities consisting of the organisation and marketing of interclub football competitions and the exploitation of media rights.
Hence, they are subject to the competition rules and, not to forget, FIFA and UEFA hold a dominant position, indeed a monopoly, in these economic activities, which is “indisputable” in the Court’s words.
With great power comes great responsibility
The third and most serious strike is the Court’s treatment of FIFA and UEFA as quasi-state actors.
By relying on case law that applies to undertakings with special or exclusive rights granted by the member states, the CJEU in reality said that FIFA and UEFA are unlike other private organisations.
No other text encapsulates this better than paragraph 137 of the judgment:
“Requirements identical to those [applicable to undertakings that have been the beneficiaries of special or exclusive rights granted by member states] are all the more necessary when an undertaking in a dominant position, through its own conduct and not by virtue of being granted exclusive or special rights by a Member State, places itself in a situation where it is able to deny potentially competing undertakings access to a given market […] That may be the case when that undertaking has regulatory and review powers and the power to impose sanctions enabling it to authorise or control that access, and thus a means which is different to those normally available to undertakings and which govern competition on the merits as between them.”
That says it all: with great power comes great responsibility. The Court viewed FIFA and UEFA as a “state within the state” and was quite strict. Certainly, this amounts to new law.
The status quo is untenable
So what is the Court of Justice demanding from FIFA and UEFA? The asks sound innocuous but the reality is that they go to the very core of how the two are organised: FIFA and UEFA need to put in place specific measures that ensure there is no risk of abuse of dominance and a whole framework for substantive criteria, as well as detailed procedural rules for ensuring that these criteria are transparent, objective, precise and non-discriminatory.
The CJEU also makes clear that the status quo is untenable and has to change, since, as the Court puts it, “at the current juncture it is impossible to set up viably a competition outside [FIFA’s and UEFA’s] ecosystem, given the control they exercise, directly or through their member national football associations, over clubs, players and other types of competitions”.
As to media rights and the commercial exploitation of rights related to football competitions, the Court was equally not happy with FIFA’s and UEFA’s role, although a bit more flexible.
In reality, the Court stressed that it was not deciding about the European Super League project, but I wonder how much room for manoeuvre is left for the two football federations.
All roads lead to Brussels
Obviously, I don’t think the case should be left to the Spanish judges which have now received the ruling.
I believe the way forward is for the European Commission to step in and implement the Court’s judgment in the context of cases that are in front of it — and I am sure there are.
And if I were FIFA and UEFA, I would move fast and try to resolve this centrally with the European Commission.
The last thing they want is to have a fragmentation of mini-regulations imposed by courts all over the EU.
The two organisations must put together a new regime with necessary and proportionate measures to safeguard their legitimate objectives.
And it would be ideal if that new regime were blessed by the European Commission in the form of a decision — more likely, a commitment decision. Time is running out.
Dr Assimakis Komninos is Partner at White & Case LLP and a litigator in major competition law cases before the EU Courts, the European Commission, national authorities, national courts and international arbitration tribunals. He is a visiting professor at Université Panthéon Assas (Paris II) and a member of the Executive Committee of the Global Competition Law Centre (GCLC) at the College of Europe.
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