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One-nil at half-time

The Advocate General has ruled against the European Super League in a case that involves fundamental questions for the organisational structure of soccer in Europe. Cormac Little throws it in.

In an opinion dated 15 December last, Advocate General Rantos delivered his recommendations to the CJEU regarding European Superleague Company SL (ESLC) v UEFA and FIFA (Case 333/21), which involved fundamental questions for the organisational structure of soccer in Europe.

In early 2021, the soccer world was rocked by the announcement of the proposed European Super League (ESL). This tournament was planned to be contested by 20 of Europe’s top clubs, with the dozen founding members guaranteed participation, irrespective of their performances on the pitch.

In response, FIFA and UEFA emphasised that they would refuse to authorise the ESL, while warning that any club or footballer playing in such a league would be excluded from participating in any of their tournaments.

Under their respective statutes, these bodies have given themselves the exclusive power to both approve international club football tournaments in Europe and to punish teams and players participating in such unauthorised competitions.

The vociferous public opposition to the ESL quickly led to nine founder members renouncing their planned participation. However, focus soon turned to the case lodged by ESLC (the company seeking to manage and promote the ESL) with the Madrid Commercial Court, claiming that FIFA/UEFA’s actions infringed EU law.

In April 2021, the Madrid court referred various questions to the CJEU for preliminary ruling under article 267 of the Treaty on the Functioning of the EU (TFEU).

EU competition rules

Article 101 TFEU generally prohibits arrangements between undertakings, decisions by associations, and concerted practices that have the object or effect of restricting competition while affecting trade between EU member states. However, restrictive arrangements may be exempted where their overall effect is to promote competition.

Separately, article 102 TFEU prevents the abuse of a dominant position in the EU (or in a substantial part of it). Dominance is not illegal per se, but dominant undertakings are under a special responsibility not to prevent the development of genuine undistorted competition in the single market. However, a dominant undertaking may argue that its behaviour is objectively justified.

Special position of sport

The special position of sport is enshrined in article 165 TFEU, which gives ‘constitutional recognition’ to the ‘European sports model’ (ESM), which is based on a pyramid structure, open competition, and financial solidarity.

While sport, like other economic activities, is subject to EU competition rules, its specific nature (such as its social and educational aspects) may be relevant for the purposes of analysing any objective justification for any restrictions imposed by a governing body.

Indeed, such bodies often have an inherent conflict of interest, in that they hold regulatory power (such as the right to designate particular tournaments) while exercising a commercial activity (that is, promoting similar events themselves).

Therefore, in order not to fall foul of EU competition rules, any refusal to approve sporting competitions organised by third parties must both be circumscribed and also justified by legitimate goals, while being proportionate to those same objectives.

Articles 101 and 102

Addressing the issue of whether the rules of prior approval constitute an object breach of article 101, the AG stated that the ESL was not a ‘breakaway’ league, because the participating clubs wished to remain affiliated to UEFA.

Measures that seek to combat ‘dual membership’ do not have the objective of restricting competition, because they do nothing to prevent the establishment of a soccer tournament outside of FIFA/UEFA’s remit.

Turning to the effects analysis, the AG stipulated that the FIFA/UEFA prior approval and disciplinary rules fall outside article 101 TFEU if they enable the relevant objectives to be achieved in a proportionate manner. He referred to the doctrine of ‘sports ancillary restraints’, where non-commercial aims such as those enshrined in article 165 TFEU are relevant to the analysis.

The AG noted that FIFA/UEFA’s actions are inherent to the pursuit of the legitimate objective of ensuring open competition among other ‘pillars’ of the ESM. Indeed, UEFA cannot be criticised for protecting its commercial interests, given that the ESL would be a rival competition in the most lucrative segment of the market for the organisation of football tournaments in Europe.

However, for the relevant FIFA/UEFA rules to fall outside article 101 TFEU, they must be proportionate. In this regard, the AG recommended that this question be decided by the Madrid court. That said, he did note that imposing sanctions on footballers and/or depriving national teams of such players seems disproportionate.

The AG acknowledged that UEFA holds a dominant, if not monopoly, position within the meaning of article 102 TFEU in the market for the organisation and commercial exploitation of international competitions between soccer clubs in Europe, since it is the sole organiser of such tournaments.

Referring to the special responsibility of dominant undertakings, UEFA should not, when examining requests for the approval of new competitions, unduly deny access of third parties to this market.

The AG stipulated that the doctrine of ‘essential facilities’ did not apply, since any refusal by FIFA/UEFA to approve the ESL did not prevent the relevant clubs from ‘breaking free’ and establishing their own competition outside of the ecosystem of these governing bodies.

Accordingly, the AG noted that the FIFA/UEFA refusal to approve the ESL, on the basis that it undermines the legitimate sporting objectives of these bodies, does not infringe article 102 TFEU.

Similarly, the threat of sanctions against ESL clubs also falls outside EU rules on abusive behaviour. That said, disciplinary measures targeting players, as regards them playing for their country, are, the AG recommended, disproportionate.

Next steps

Clearly, the AG’s opinion represents good news for FIFA/UEFA. While such rulings are not binding on the CJEU, this court typically follows them around 80% of the time. However, it remains to be seen whether the Spanish court will, in due course, view either the approval system or planned disciplinary measures as proportionate.

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