The European Commission announced on 27 September 2016 that it had sent a formal “statement of objections” to the International Skating Union, alleging that the ISU’s rule banning skaters from taking part in unauthorised speed skating events and subject to a lifetime ban sanction, infringes the prohibition of anticompetitive agreements in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU).
International and national governing bodies of many sports have traditionally sought to control the extent to which athletes are free to take part in events which are not approved by the governing body, often justified by the need to ensure the proper organisation and conduct of the sport in the interests of all stakeholders (e.g. including the need to maintain control of the sporting calendar, ensure the integrity of events and to protect the sport from free-riding by breakaway events seeking to maximise profits at the expense of the sport’s long term interests). However, such rules have been the subject of challenge under the EU competition rules on multiple occasions (including Hendry –v- WPBSA (UK High Court; 2002); MOTOE (ECJ; 2008; Show Jumping Ireland (Irish Competition Authority; 2012) and continue to be controversial.
The Commission’s statement says that “the Commission is concerned that the system of penalties set out by the ISU Eligibility rules…remains disproportionately punitive and would prevent non-ISA affiliated players from organising international speed skating competitions” and that “the penalties…are not aimed at preserving high standards in sport but rather serve to maintain the ISU’s control over speed skating.” The Commission’s objections therefore appear to focus on two aspects:
- the disproportionate penalties (up to a lifetime ban) which can be imposed on infringing skaters; and
- the conflict of interest between the ISA as governing body and the interests of “ISU affiliated players” as organisers of sporting events.
The focus on proportionality of the penalty might suggest a willingness to accept such bans provided the accompanying penalties are less draconian – although the objection to the ISU using such rules to “maintain the ISU’s control over speed skating” suggests that to be acceptable to the Commission, such penalties should be sufficiently benign that athletes are prepared to infringe the rule if given sufficient counter-incentives by a new entrant organiser.
The ISU issued its own statement on 27 September, rejecting the Commission’s objections as “unfounded”, on the basis that the ISU rule against participation in unauthorised events benefits “sports organizers, sports persons and spectators” but does not foreclose independent events organisers provided they organise events on the ISU international calendar and with ISU authorisation. This suggests that the ISU will seek to argue that ISU’s regulatory role does not conflict with the EC competition rules if it is exercised objectively and without discrimination against independent organisers (so that its regulatory role does not lead to the “situation of unequal conditions of competition” objected to by the ECJ in MOTOE).
The stage appears set for a finely balanced argument in an area of competition law in need of clarification.