Sports Governance and Trade Restrictions

Critically analyse the strengths of competition law arguments that athletes can rely on to challenge a ban imposed on them by their governing bodies for taking part in unauthorised competition.

The World Series Cricket (WSC) related case, Greg v Insole mainly started the competition law arguments. WSC happened between 1997 and 1999 and it had allegedly changed the course of arguments between sports governing bodies and athletes regarding the topic in hand. In Greg v Insole, the International Cricket Council (ICC) made a rule that disqualified any player participated in unauthorised matches from playing in any official test match for their country. The Test and County Cricket Board (TCCB) followed this rule. Based on “restraint of trade” doctrine, the High Court ruled that the ban was beyond reasonable. Article 101 of Treaty on the Functioning of the European Union (TFEU) “prohibits cartels and other agreements that could disrupt free competition in the European Economic Area”. The act of the ICC and TCCB allegedly breach this provision. They allegedly colluded that influenced the preventing, restricting or distorting market competition There are similar leading cases that override potential restrictive rules of sports governing bodies. In Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman, the European Court of Justice ruled against the system imposed by the concerned clubs that placed a restriction on the free movement of workers by upholding prohibition of such restrictions provided under Article 45 (1) of TFEU. Similar is the case with Christelle Deliège V Ligue Francophone de Judo et Disciplines ASBL. These cases provide significant detailed facts and context that athletes and court could form base for favourable rulings. Athletes can rely on certain contentions, as were raised in Meca-Medina and Motosykletistiki Omospondia Ellados NPID (MOTOE) v Eilliniko Dimosio, which will help them determine appropriate challenges against any ban imposed upon them. For instance, they need to determine whether the regulatory body that seeks to rely on restrictive rule an undertaking or an association of undertaking; whether the rule contradicts Article 101(1) or abuses dominant position and breach Article 102 of TFEU; and whether the restriction or abuse affects trades between Member States. Abuse of dominant position in a market is prohibited under Section 18, Competition Act 1998. For a restraint to be legitimate, it should be reasonable in the available circumstances. Reasonableness should be more that what the circumstances demand and it should protect the interest that relies upon it. There is also the difference between restriction on commercial freedom and restriction on commercial freedom restricting competition. EU competition laws aim to preserve free competition. The determining factor is to see whether any rules and policies of sports authorities can escape prohibitions stipulated under Articles 101-102 of TFEU. The Meca-Medina case confirmed that the Wouters test that introduced regulatory ancillarity in the EU competition law analytical framework applies to organisational rules in the sport industry.

Meca-Medina test lays out analytical framework for regulatory rules. If the restriction has legitimate objectives in public interest and if it is suitable and proportionate to the objectives, it shall not constitute a breach of Articles 101-102 of TFEU. Any prior authorisation system shall be in public interest and shall also comply with proportionality principle. The European Commission in its draft preliminary guidelines regarding Application of Competition Rules to Sport, 15 February 1999 concurred with the then International Rugby Board rule that “control over the official match calendar by governing body is necessary for the good of the game, ensuring solidarity and development of sport at the grassroots level, matters which individual clubs, if allowed to act in their own self-interest, are unlikely to take into account. It is not necessary to exercise control over official event calendar for ensuring regulatory integrity and brining a proper balance between different kinds of events.

The organisation structure in European sports allegedly possesses a monopolistic feature. Such monopoly is demonstrated in the rule of International Skating Union (ISU), which was struck down by the European Commission stating that ISU rules that impose severe penalties on athletes who participate in unauthorised speed skating competitions are in breach of EU antitrust law, Article 101 of TFEU. On one hand, EU attempts to control power of the sporting authorities and on the other, it allows them to do so. Article 165 of TFEU provides significant autonomy to governing bodies. Treaty of Lisbon also provides justification for infringement if such infringement is proportionate to an inherent need in a sport. This demonstrates the influence sports bodies exert for two purposes: securing recognition of special characteristics of sports within the Treaty and engage with the EU to minimise its impact. As we can see in the case of the football ‘transfer system’, irrespective of the fact that it has been the subject to many EU law challenges, it continues as obstacles to free movement of players. An anti-competitive agreement is automatically void except if it provides efficiency benefits to consumers and any restrictive provision is limited to what is necessary to achieve those benefits. A conduct, therefore, is not abusive as long as it is “objectively justified”. Consequently, EU's treatment of the transfer system could be allegedly viewed football as 'special', and therefore is justified.

The outcome of the case involving Fédération Internationale de Natation (“FINA”) appropriately sums up this essay. A lawsuit was filed by three swimmers in the Northern District of California for: i) alleged boycott by FINA of a potential competition by the International Swimming League (“ISL”); ii) FINA warned athletes of potential ban from competing in the Olympics if they participate in ISL competition. On 15 January 2019, FINA decided to freely allow swimmers to participate in other race meetings. If sports federations exercise regulatory power and this affects the distinct market of organising sports events, where a competition exists between such sports federations and other sports events organisers, EU law applies.

“Given the autonomy of sports principle, sport governing bodies are best placed to tackle match-fixing and therefore law enforcement agencies should not pursue such matters until approached by the relevant sport governing body.”

There have been serious challenges imposed on both national and supranational public authorities while dealing with sports sector. The claim of “sport specificity” by organisations in this sector has managed to build regulatory autonomy and private sporting rules, despite having the potential or even breaching the core principles of public law. National and international sport arbitration bodies, such as the Court of Arbitration for Sports (CAS) has inclination to avoid national courts’ intervention. In recent times, public authorities have been demanding sports governing bodies to increase their legal scrutiny, transparency, democracy and respect for fundamental rights. This is unlike the earlier time when sports governing system was considered a self-contained regime with no clear role or involvement of public law and state authorities. The case of Mutu and Pechstein v Switzerland, dealt with this question. Demonstrating that the Court of Arbitration for Sports (CAS) in Lausanne met the requirement of “tribunal established by law”, the ECtHR ruled that CAS, even though is created based on private law, had full jurisdiction to determine the basis of legal norms, follow organised procedures, and question of fact and of law involved in the disputes. The autonomy of the sport governing system coupled with the reluctance of the national courts pose a serious question on the judicial activism of the law enforcement agencies. Drawing distinctions here, national courts can apply international sports law whereas global sports law clan immunity from national law. Claim by international sport federations for continued self-regulation and non-intervention from national legal systems and international sports law allegedly opposes a rule of law. They deploy indirect and more subtle forms of governance to exercise control over governance developments in sport. For instance, International sport governing bodies (ISGBs) also deploy similar strategies. Such autonomy could be seen in terms of political, legal, financial or pyramidal autonomy. They deploy different strategies to protect different dimensions of their autonomy.

However, they allegedly lack legitimacy as there is marginal involvement of players, players’ right are violated; and non-compliance with internationally recognised human rights. This could be seen in the case of Daniel Köllerer v Association of Tennis Professionals (ATP), Women’s Tennis Association (WTF), International Tennis Federation (ITF) & Grand Slam Committee, where the concerned defendant player noted that the CAS’ Code of Sports-Related Arbitration does not provide for a remedy to “reserve an appeal”. Appeal went to the Court of Arbitration for Sport Rules based on the fact that charges have not been sufficiently proven. Similar controversies are there, such as the case of Mogadi Caster Semenya v International Association of Athletics Federations, which involves alleged discriminatory (sex development) DSD regulations overridden by the concerned authority’s reasoning of IAAF’s aim of preserving the integrity of female athletics in the restricted events. The 2015 Oberlandesgericht Munchen (OLG) case shook up the sport fraternity when the validity of the alleged unilateral arbitration clause in favour of CAS was challenged when it was alleged that International Skating Union abused its dominant position to impose the clause on the athletes. The CAS was considered the supreme court of the sports fraternity. The ruling in this case produces a legal strategy to challenge awards of CAS awards, which is used in the EU national courts based on principle of abuse of a dominant position provided for under Article 102 of TFEU. The concerned arbitration clause is not valid and is as against antitrust law as the parties do not have any influence over the constitution of the CAS. This case and many other such cases show the lack of legitimacy of the sport governing authorities, the rules of them being in contrast with EU law and rights of the players. For instance, Rule 50 of the IOC Charter prohibits players from demonstration or political, religious or racial propaganda. This was breached in the case of Tommie Smith and John Carlos in their act of in racial protest during the 1968 Mexico City Olympic Games where they raised their gloved fists in association with the Black Power movement clearly violated this rule. Cases such as Bakker v Switzerland, Mutu v Switzerland, and Pechstein v. Switzerland demonstrate that athletes will be protected by EU laws or member states in event if they are fired or disciplined for a political expression. Article G(3)a of the Uniform Tennis Anti-Corruption Code (UTACP) provides that “the standard of proof shall be whether the PTIO has established the commission of the alleged Corruption Offence by a preponderance of the evidence. [...]”. It should be noted that match fixing is a crime and as such appropriate standard of proof related to criminal offence should be employed. Rules and practice to meet match fixing challenges should not deprive athletes’ fundamental rights. Apart from the lack of legitimacy regarding the due process being followed, another issues is concerning the proportionality of sanctions. Many cases, such as Grobbelaar v News Group Ltd show that existence of excessive damages by juries, such situation being theoretically termed “the libel lottery”. In such cases, juries are given instructional guidelines for determining criminal violations, but they are not provided any guidelines for determining damages.

Having discussed all these cases mentioned above, the question is how and where concerns around players’ human rights fit in the rules and ruling of the sport governing authorities, which main focus in on upholding its monopoly. There is some solace in the Universal Declaration of Player Rights, 2017 which resulted from sports organisations, like International Olympic Committee, UEFA, and FIFA action to explicitly incorporate into their policies and contracts human rights protections. The Universal Declaration of Player Rights comprise seventeen (17) core points, which covers rights of access to sport, specifically protecting minors and sport without any discrimination; Labour, Personal and Legal rights.

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