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The International Skating Union in the European ‘dock’ By Tom Serby, Anglia Ruskin University Law school, Cambridge, UK

By Tom Serby, Anglia Ruskin University Law school, Cambridge, UK In a Press Release of 5 October 2015, the European Commission (EC) confirmed that it had opened a formal antitrust investigation into the International Skating Union (ISU) rules, which ban skaters for life from competitions, such as the ISU World and European Championships and the Winter Olympics, if they take part in competitions not authorised by the ISU.[1] The EU Commissioner for Competition Policy, Margrethe Vestager, is quoted in the press release as saying: “we will investigate if such rules are being abused to enforce a monopoly over the organisation of sporting events or otherwise restrict competition. Athletes can only compete at the highest level for a limited number of years, so there must be good reasons for preventing them to take part in events."  The investigation arises from a complaint made by two skaters who argue that the life ban is disproportionate. An obvious anti-competitive effect of refusing to sanction rival tournaments is the creation of a barrier to entry for market competitors who might increase earnings for athletes.  The author of this post has commented previously on this investigation.[2] At issue here is the conflict between the regulatory and commercial roles performed by Sports Governing Bodies (SGBs). Under the (so-called by the EC) ‘European model of sport’ (“the sport structure, including […] 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”), EU law tolerates a monopolist sporting regulator, which is a natural corollary of ensuring both a common set of rules of the game and a common framework of rules governing relations between the sport’s athletes and clubs and governing bodies.[3] To the extent, however, that the monopolist governing body’s rules restrict the ability of athletes affected by the rules to earn their livelihoods, such rules must, in the words of the Press Release, “pursue a legitimate objective”, and any restrictions they create must be “inherent and proportionate in reaching’ that objective.  This, of course, is an expression of the decision of the CJEU in Meca-Medina.[4] There are close parallels to the ISU investigation.  Firstly, the Motoe case, in which the CJEU accepted that, under Article 102 TFEU, SGBs can be ‘undertakings’ engaged in economic activity, since there is both a regulatory and commercial aspect to their decisions whether or not to licence a rival event. [5] In another case involving motor sports, the Federation International de l’Automobile (FIA) case, the EC obtained an agreement from the FIA[6] that it would only refuse to sanction rival motor-racing events (and ban participants for engaging in them) on grounds of safety standards. The FIA continues to attract attention for its anti-competitive practices.[7] National Competition Authorities in various EU countries have also intervened under competition law in restrictions imposed by SGBs on athletes participating in non-sanctioned events.[8] Of equal interest to the underlying anti-trust issues that the current EC investigation and decision will clarify, is encapsulated in this interesting sentence in the Press Release: “Many disputes about sporting rules raise primarily issues related to governance [emphasis added] of the sport, i.e. relations between different stakeholders belonging or being closely connected to the structure headed by sports federations. Such disputes can usually be best handled by national courts rather than by the European Commission.” This is a clear attempt by the EC to distance itself from any role as a ‘de facto’ regulator for European sport, which - it could be argued by some - it acquired through Article 165 TFEU (the so-called ‘Sport Article’). The EC has been criticised in some quarters for failing to intervene in UEFA’s Financial Fair Play Regulations, which have been the subject of both a complaint to the EC and a court claim on grounds that they infringe EU anti-trust law.[9]     [1] http://europa.eu/rapid/press-release_IP-15-5771_en.htm . [2] See http://www.sportsandtaxation.com/2015/10/isu-eu-competition-law-investigation/. [3] (White Paper On Sport, COM(2007) 391 final, §4.1). [4] Case C-519/04 P Meca-Medina and Majcen v Commission [2006] ECR I-06991 (ECLI:EU:C:2006:492). [5] (Case C-49/07 Motosykletistiki Omospondia Ellados NPID (MOTOE) v Elliniko Dimosio [2008] ECR I-4863 (ECLI:EU:C:2008:376)). [6] EC Press Release IP/01/1523 of 30 October 2001. [7] http://www.sportsandtaxation.com/2015/09/formula-one-eu-competition-law-woes-continue/ . [8] See for example Autorità Garante della Concorrenza e del Mercato, Gargano Corse/ACI, Decision n° 19946 of 30 June 2009, Bolletino n° 23/2009; and the decision in Ireland of the Competition Authority against Show Jumping Ireland, available at http://www.tca.ie/images/uploaded/documents/201205%20Case%20Summary%20-%20SJI.pdf . [9] See my previous comments on this issue at http://www.sportsandtaxation.com/2015/07/uefas-financial-fair-play-regulations-brussels-court-refers-the-striani-complaint-brought-by-advocate-jean-louis-dupont-to-the-european-court-of-justice-for-a-preliminary-ruling-and-imposes/  and http://www.sportsandtaxation.com/2015/07/financial-gair-play-ffp-rules-eu-legal-challenge-denied/.
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The editors of  the Journal Sports Law & Taxation are Professor Ian Blackshaw and Dr Rijkele Betten, with specialist contributions from the world's leading practitioners and academics in the sports law and taxation fields.

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Dr. Rijkele Betten

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Prof. Dr. Ian S. Blackshaw

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Prof. Guglielmo Maisto
Maisto e Associati, Milano

Dr. Dick Molenaar
All Arts Tax Advisors, Rotterdam

 

Mr. Kevin Offer
Hardwick & Morris LLP, London

Mr. Mario Tenore
Maisto e Associati, Milano

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