1 SPORT AND COMPETITION LAW AT EU LEVEL Madrid, february 2007 MICHELE COLUCCI

2 The European Model of Sport The Pyramid model

3 Characteristics Promotion and relegation Promotion and relegation Grassroots approach (starting from the clubs) Stakeholders and their role (who does what)

4 EC TREATY ART. 81 EC: Are incompatible (and void )with the common market all agreements between undertakings, decisions by associations of undertakings and concerted practices which may: affect trade between Member States have as their object or effect the prevention, restriction or distortion of competition within the common market

5 Exceptions Agreements which contributes to improving: the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, And which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in questio

6 ABUSE OF DOMINANT POSITION ART. 82 EC: ART. 82 EC: Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States.

7 ABUSE OF DOMINANT POSITION Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

8 Fields of application in Sport Transfer rules Transfer rules Sale of tickets Sale of tickets Broadcasting rights Broadcasting rights Monopoly of federations Monopoly of federations Multi-ownership of clubs Multi-ownership of clubs

9 Basic Principles of Community Law EC law applies to Sport in so far it constitutes an economic activity (ECJ case law) EC law applies to Sport in so far it constitutes an economic activity (ECJ case law) No Activities purely social, artistic or sporting No Activities purely social, artistic or sporting but then MECA MEDICA judgement of 18 July but then MECA MEDICA judgement of 18 July Test of Necessity Test of Necessity Test of Proportionality Test of Proportionality

10 Applicability of EC competition law to football Question:Are Sports federations (private entities) associations of undertakings? Question:Are Sports federations (private entities) associations of undertakings? Undertaking under art. 81 is every entity engages in an economic activity, regardless of the legal status of the entity and the way in which it is financed Undertaking under art. 81 is every entity engages in an economic activity, regardless of the legal status of the entity and the way in which it is financed Nature, profit, and aims are irrelevant! Nature, profit, and aims are irrelevant! Sport industries: many services Sport industries: many services Analysis of finacial resources, training of players,... Analysis of finacial resources, training of players,...

11 Nature of Transfer regulations Decision of an association of undertakings: Decision of an association of undertakings: Regulations issued by the executive committee of FIFA adopetd on the legal basis of the federations statutes Regulations issued by the executive committee of FIFA adopetd on the legal basis of the federations statutes No importance if they are legally binding or mere recommendations No importance if they are legally binding or mere recommendations

12 THE RELEVANT MARKET GEOGRAPHICAL Market: territory of all associations GEOGRAPHICAL Market: territory of all associations PRODUCT MARKET: PRODUCT MARKET: EXPLOITATION Market: where clubs and association exploit their performance EXPLOITATION Market: where clubs and association exploit their performance CONTEST MARKET: where the performance are exploited (the Sporting contest) CONTEST MARKET: where the performance are exploited (the Sporting contest) SUPPLY MARKET: where the clubs sell and buy players SUPPLY MARKET: where the clubs sell and buy players

13 RESTRICTION OF COMPETITION AMOUNT OF TRANSFER PAYMENT AMOUNT OF TRANSFER PAYMENT EFFECT ON THE MARKET: EFFECT ON THE MARKET: Strong clubs remain strong Strong clubs remain strong Players less paid Players less paid NECESSITY OF THE TRANSFER REGULATIONS: NECESSITY OF THE TRANSFER REGULATIONS: Maintaining financial and competitive balance Maintaining financial and competitive balance Compensation for cost of training Compensation for cost of training EFFECT ON TRADE BETWEEN MSs EFFECT ON TRADE BETWEEN MSs

14 THE ECJ CASE LAW analysis and perspective BOSMAN BOSMAN PIAU PIAU MECA MEDINA MECA MEDINA

15 THE MECA MEDINA CASE Compatibility of rules with the Community rules on competition cannot be assessed in the abstract. Compatibility of rules with the Community rules on competition cannot be assessed in the abstract. Taking into account: Taking into account: the overall context in which the decision of the association of undertakings was taken or produces its effects. the overall context in which the decision of the association of undertakings was taken or produces its effects. Its objectives: measures inherent in the pursuit of those objectives and proportionate to them. Its objectives: measures inherent in the pursuit of those objectives and proportionate to them.

16 THE NEW SCENARIO RETHINKING SPORT AT EU LEVEL? RETHINKING SPORT AT EU LEVEL? NEW STRATEGIES AMONG STAKEHOLDERS? NEW STRATEGIES AMONG STAKEHOLDERS? CO-OPERATION WITH THE EU INSTITUTIONS? CO-OPERATION WITH THE EU INSTITUTIONS? CHANGE THE EU LEGISLATION IN THE NAME OF AUTONOMY AND SPECIFICITY OF SPORT? CHANGE THE EU LEGISLATION IN THE NAME OF AUTONOMY AND SPECIFICITY OF SPORT?

17 CONCLUSIONS ALL ROADS LEAD TO ROME BUT FIRST... THEY GO THROUGH BRUSSELS