European Union: EU General Court Rules Sports Associations Cannot Stop Athletes From Competing In Third-Party Events

On 16 December 2020, the General Court largely confirmed the European Commission's Decision according to which the International Skating Union's (the "ISU") rules on eligibility are contrary to EU competition law. However, it partially annulled the Commission's Decision on the ground that it failed to demonstrate the anticompetitive effects of the ISU's arbitration rules. The ISU is the sole body recognized by the International Olympic Committee to administer figure skating and speed skating on ice.

Background on the ISU's eligibility rules

In 2017, following a complaint two years earlier by professional speed skaters Mark Tuitert and Niels Kerstholt, the Commission adopted a Decision which found that the ISU's internal rules on eligibility infringed EU rules prohibiting anticompetitive agreements.

Such eligibility rules initially foresaw that athletes who participated in non-authorized competitions would face a lifetime ban from the ISU. In 2016, the ISU amended the sanctions for such participation to a range of punitive measures going from a simple warning to a lifetime ban from the ISU. The rules also included an arbitration clause according to which the Court of Arbitration for Sport ("CAS") in Lausanne, Switzerland, was granted sole jurisdiction to review any ISU members' challenges against such measures.

The Commission's Decision

In its Decision,¹ the Commission stated that the ISU's eligibility rules were restrictive of competition within the meaning of Article 101 TFEU as they prevented athletes from participating in non-ISU international speed skating events and hampered the organization of such events. Given the gravity of the punitive measures, which could take the form of a lifetime ban, the ISU was in effect prohibiting athletes from participating in non-authorized events (such as the Icederby which offered significant prize money).

These measures enabled the ISU to pursue its own commercial interests and restricted the commercial freedom of professional athletes who in effect could not offer their services to competing skating events, potentially losing additional sources of income. The measures also prevented competing organisations from organising their own speed skating competitions as they were unable to attract top athletes.

In relation to the arbitration clause, the Commission concluded that even though it was not anticompetitive in itself, it nonetheless reinforced the anticompetitive effects created by the eligibility rules since it prevented athletes from obtaining effective judicial protection against the ISU's ineligibility decisions. The Commission therefore required the ISU to change its eligibility or arbitration rules, subject to a periodic penalty payment of 5% of the ISU's average daily turnover.

The ISU's Appeal to the General Court

The ISU appealed the Commission Decision to the EU General Court, arguing that the eligibility rules were necessary to protect the integrity of its competitions, notably against betting, and that the Commission had no business ordering a change to its arbitration rules.

The General Court held that the ISU's eligibility rules lacked "objective, transparent, non-discriminatory and verifiable" criteria for authorizing competing events.² It found that they had anticompetitive effects, "likely prevent[ing] market access" for competing organisers,with "severe and disproportionate penalties" for athletes, and therefore infringed EU competition rules.

However, the General Court annulled the Commission's Decision in so far as the assessment of the arbitration clause was concerned.According to the Court, the Commission did not demonstrate that the arbitration rules "compromise[d] the full effectiveness of EU competition law" or breached EU competition rules.The General Court noted that the arbitration clause did not infringe the "athletes' right to a fair hearing"and that the exclusive jurisdiction of the CAS may be justified "by legitimate interests linked to the specific nature of the sport." The Court also recalled the right of individuals to claim compensation in front of national courts for the damage suffered as a result of an infringement of EU competition law. The Court therefore found that the Commission had no power to request that the ISU change its arbitration rules.

Footnotes

1. European Commission Decision of 8 December 2017, International Skating Union's Eligibility rules, AT.40208 (the "Decision").

2. Judgment of 16 December 2020, International Skating Union v Commission, T-93/18, ECLI:EU:T:2020:610 (the "Judgment")."

Originally published 18 December 2020

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