FIFA, UEFA and Super League – Who is the Bad Guy from a Competition Law Perspective?

Hearing on the European Super League before the European Court of Justice

After the European Super League had almost been forgotten, the debate about the highly controversial project is now resurging again. In April 2021, twelve top European football clubs announced their intention to establish their own European breakaway competition, the "Super League", in rivalry with UEFA's international competitions, and of whom these twelve clubs planned to form the core. After a few days of fierce opposition from, in particular, fans, clubs and officials, the project quickly seemed buried. Only Real Madrid, Juventus Turin and FC Barcelona remained committed to the idea. Consequently, the Madrid Commercial Court submitted a series of questions to the European Court of Justice (ECJ) in Luxembourg concerning European competition law and the ECJ's answer will strongly influence the future organization of professional football. The central questions are: Did FIFA and UEFA act as an illegal cartel? Did they abuse their dominant position within the international market? Is there a restriction of fundamental EU freedoms?

Running Foul of EU competition law?

The European Superleague Company, S.L. requests the Madrid Commercial Court to find that the actions and statutes of UEFA and FIFA violate Articles 101 and 102 TFEU on cartels and abuse of dominant positions¹. In addition, Superleague Company claims breaches of the four fundamental freedoms protected by the Treaty (Articles 45, 49, 56 and 63 TFEU). The Spanish court submitted six preliminary questions to the ECJ which should assess the prior authorization required by FIFA and UEFA for the organization of competitions by third parties if FIFA and UEFA members want to participate in them. Furthermore, the Spanish court asks whether FIFA and UEFA may impose sanctions on clubs and/or players participating in the Super League, as well as imposed rules on the ownership of all rights associated with the competition.

UEFA and FIFA – an anticompetitive cartel?

Super League accuses UEFA and FIFA of running an anti-competitive cartel. The authorization procedure for the creation of new competitions would serve to secure their monopoly position and prevent competition on the market. The "radical conflict of interest" created by UEFA's "dual role" as regulator and operator is particularly decried in this context: Why should UEFA voluntarily allow competition in the hitherto exclusive market by granting authorizations to competing events? Besides, the threatened sanctions against players and clubs would be contrary to other EU law rules.

Core of the defense: the preservation of "sporting integrity"

In their written and oral submissions, more than twenty EU Member States are (almost) united in defending UEFA. Despite years of scandals and criticism of the world football's governing body and its members, UEFA is now said to represent the values of the European Sports Model, to protect the physical and ethical integrity of sportsmen and sportswomen and merit-based competition, which would always be open to the best performing teams. While it is acknowledged that the regulations and conduct of FIFA and UEFA could, in principle, be against the prohibition of cartels, the protection of "sporting integrity" is put forward as a legitimate objective in the sense of the Meca-Medina decision of the ECJ². According to this jurisdiction, the three-step test applies, which requires a legitimate objective, consequential effects restrictive of competition inherent in the pursuit of those objectives, and the proportionality of the measure. In the view of UEFA and FIFA as well as many of the participating Member States, these requirements are fulfilled. Thus, opposing the Super League would not amount to an illegal restriction of competition under Article 101 (1) TFEU and any infringement of Article 102 TFEU (prohibition of abuse of a dominant position) would also justified. When looking at possible justifications of restrictions, the social and economic aspects of the case and not only strictly (antitrust) legal arguments should be taken into account in the decision-making. Regarding to the alleged conflict of interest, it can be argued that – as with other business companies – such a conflict is inherent in the defense of one's economic interest and is not per se anti-competitive. In this respect, a different legal treatment of undertakings operating in the field of sport would appear artificial.

At the same time, FIFA, UEFA and Member States are counterattacking and argue that the Super League represents a "textbook example of a cartel" leading to the "death of open competition". This argument is based on the fact that the new competition foresees a certain number of permanent, financially strong members. This would be contrary to the principle of a participation based on merits. The German Federal Minister of Sports Nancy Faeser therefore says: "Anyone who loves football is against a Super League." However, can such an argumentation actually hold up legally?

EU competition law as a binding framework

The European Commission, which is also heard in all preliminary ruling procedurs, takes a nuanced stand adopting in large parts the General Court's position in the ISU-judgement³. It insists on compliance with EU law. Thus, it calls for a system of "checks and balances" on the monopoly power of FIFA and UEFA. The exercise of regulatory functions must be subject to restrictions, obligations and review to prevent such bodies from distorting competition. A modification of the approval procedure by FIFA and respectively UEFA could be a possible consequence which would have to be designed as a procedure regulated on the basis of objective, transparent and non-discriminatory criteria, so that approval is not de facto excluded from the outset. The Commission appeared also doubtful as to the legality of threatened sanctions, namely bans on participating in FIFA and UEFA competitions and national leagues, or on playing for the national team. In particular, doubts were expressed on the necessity and proportionality of the measures. Nevertheless, the Commission also acknowledges that UEFA may have "legitimate objectives to restrict competition" but that "any defense of the European Sports Model must respect European law, in particular with regard to competition law and fundamental freedoms". UEFA may have a conflict of interest in approving competitions organized by third parties. Finally, the question of whether the Super League itself constituted a cartel would have to be examined in another proceeding.

Waiting for the decision of the "referee" from Luxembourg

After the hearing before the ECJ, which mainly focused on the technical complexities of EU competition law, the opinion of the Advocate General Athanasios Rantos, announced for 15 December 2022 and often indicative of the final judgment, is now eagerly awaited. The final ECJ ruling will probably depend to a large extent on whether the 15 judges recognize that the restrictions in question are inherent in the pursuit of the legitimate objective and what weight they give to that objective in the context of their consideration. The judgement is expected at the end of this or in the beginning of the next year.

Given the apparent similarity of the cases, the appeal of the International Skating Union (ISU) against the ISU-judgment was also heard by the ECJ's Grand Chamber on Monday, 11 July 2022⁴. The General Court had dismissed the ISU's objections against a Commission Decision⁵ classifying the prior authorization rule prescribed in the federation's statutes as a violation of Articles 101 (1) and 102 TFEU on 16 December 2020.

Consequently, in both cases, that of the governing body for figure skating and speed skating as well as the one responsible for football, a comparable positioning of the ECJ can be expected. This will have a lasting impact on the future relation between EU competition law on the one hand and regulations of sports associations on the other.

Prof. Dr Rainer Bierwagen
Dr Dietmar Reich