Unfair competition in sports appears in various forms. One example is the large doping scandal on the grounds of which Russia was banned from competing in the Olympic Winter Games in PyeongChang. Unfair competition may also occur if sports associations or sponsors breach the competition rules. Established case law provides that practices of sports associations and sponsors and agreements between sports associations, sponsors and sportsmen are subject to competition law. Sportsmen nowadays increasingly – and successfully – rely on breach of the cartel prohibition or the prohibition of abuse of a dominant position. Competition authorities are also playing an increasingly active role. The developments in the field of sports and competition are addressed in this blog.
Exclusivity
Sports associations, sponsors and sportsmen need each other. The association organises the events, generating income in that manner. Top sportsmen in their turn attract sponsors and stimulate ticket sales, which is an incentive for sports associations and sponsors to enter into exclusive contracts with sportsmen. That is not always permitted.
A case in point is the exclusivity that the International Skating Union (ISU) demanded of skaters. Skaters could be banned for life for competing in unauthorised events. That made it possible for the ISU to prevent sportsmen from competing in events organised by other associations. Former Olympic speed skater Mark Tuitert and former short-tracker Niels Kerstholt disagreed with that rule and (successfully) filed a complaint with the European Commission.
The European Commission found that the ISU’s rules restricted competition. In the Commission’s opinion, there was no justification for a ban on competing in unauthorised events. The ISU prevented the organisation of competitive events, thereby protecting its own competitive position. The Commission concluded that the purpose (and effect) of the exclusivity rules was the restriction of competition. The ISU appealed the judgment.
The ISU’s ban on competing in other sports events is not unique. The Commission is also investigating, for instance, a complaint regarding a similar rule, filed by the Turkish Airlines Euroleague against the International Basketball Federation (FIBA). The Belgian Competition Authority (BCA) ruled in a provisional decision that the exclusivity clause of Fédération Equestre Internationale (FEI) in equestrian sports restricted competition. The BCA did not issue a final decision, because the FEI and the complainant (Global Champions League, GCL) reached a settlement.
Anti-doping
In early May 2018, Tour de France winner Chris Froome’s participation in the Giro d’Italia came under pressure amid a doping investigation. An interesting question is whether such a ban could, however, be justified from a competition-law perspective. The European Court of Justice has ruled that anti-doping rules are not in breach of competition law, provided that they do not go beyond what is necessary to obtain the objective of proper conduct in sporting competition. Rules that exceed those limits, for instance because the sanctions for doping violations are disproportionate, may be incompatible with competition law. It is doubtful, for instance, whether it is always necessary to impose a lifelong ban on a sportsman on the grounds of prohibited use of doping.
Sponsorship deals
Sponsorship deals of sports associations are another interesting issue. The German competition authority, the Bundeskartellamt (BKa), for instance, is currently looking into the Olympic Charter of the International Olympic Committee (IOC) on the grounds of possible abuse of a dominant position. Sportsmen who participated in the recent Olympic Winter Games in PyeongChang could not be used for advertising purposes before, during and after their participation in the Games, without the IOC’s express consent. The Bka is currently investigating the commitments of the IOC and the German Olympic Sports Confederation (DOSB) that will loosen the previous restrictions.
The rules that a sports association may set with regard to a sportsman’s material may also be subject to competition law. The Dutch Badminton Association (BN), for instance, prohibited players on the grounds of its own sponsorship deal from using any material other than that of Yonex when training and competing in international events. Players who refused to comply could not join the international team. That gave rise to a serious dilemma for the players, since they could not use material of their own sponsors. A competitor (Dunlop) and several players filed a legal action on that ground several years ago. The court found that the exclusivity agreement between BN and Yonex did not have as its purpose the restriction of competition, that Dunlop’s arguments regarding market allocation had been insufficient substantiated and that it had therefore failed to produce evidence of restriction of competition.
Similar proceedings were instituted by a Dutch pelota player against the Royal Dutch Pelota Association (KNKB). The player in question was also a producer of pelota gloves and challenged KNKB’s pelota rules, which provided that pelota players could wear gloves of only three producers designated by the KNKB. The KNKB refused to give the pelota player a licence. That annoyed the pelota player, who applied to the court, arguing that the ban restricted competition. In his opinion, KNKB was abusing its dominant position by refusing to grant a licence. Although the pelota player had presented a report to support his argument, the preliminary relief judge of the Court of Noord-Nederland found that his reliance on competition law had been insufficiently substantiated.
Conclusion
It is apparent from these legal actions that competition law is increasingly relied on to obtain the objective of fair sporting competition. That is in keeping with the European Parliament’s appeal to the European Commission to take stricter action against restriction of competition in sports. It is not always easy for sportsmen to win civil proceedings (see our earlier blog on this subject); the approach via the ACM or the European Commission is therefore more likely to succeed in most cases. Supervisory authorities are increasingly open to complaints regarding restriction of competition in sports. Sports associations should therefore guard against unnecessarily restricting commercial activities of sportsmen and sporting clubs. Let the games begin!
