On 21 December 2023, the Court of Justice of the European Union (the “ECJ”) adopted a ruling, in case C-333/21 European Superleague Company, on the interpretation of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). In the ruling, the ECJ held that the Fédération Internationale De Football Associations (FIFA) and the Union of European Football Associations (UEFA) would breach the European Union (EU) rules on competition law by abusing their dominant position on the market for the organisation of European inter-club football competitions and the related commercial rights.
Background to the dispute
In April 2021, twelve (12) of the main European clubs announced the creation of a new league, the European Super League (“Super League”), and a company to manage it (the “ESL”). Following the announcement, the clubs, as well as their players, faced fierce opposition from FIFA and UEFA, who threatened to exclude them from all competitions, including competitions for nations such as the World Cup.
Aiming at avoiding sanctions, ESL sued FIFA and UEFA for damages before the Spanish courts competent for commercial disputes, claiming that the football associations would breach the EU rules on competition by relying on the provisions of their respective statutes which, respectively, (i) require their prior approval for the establishment of international football competitions for professional clubs as well as the participation thereto of clubs and their players, and establish mechanisms of supervision and sanctioning, and (ii) govern the exploitation of commercial rights related to competitions approved by both FIFA and UEFA.
Subsequently, the Spanish courts referred to the ECJ certain question on the interpretation of Articles 101 and 102 TFEU.
The issues at stake
FIFA and UEFA’s immediate and vehement reaction to the proposal of organising an alternative European championship is proof of the importance of the bold move of the promoters of the Super League. The primacy of these football associations actually had never been challenged before, partly due to a well-run system, developed throughout time in order to respond appropriately to and meet the changing tastes of viewers, partly to an effective management of the rules on the access to market by FIFA and UEFA.
Interestingly, the ECJ’s ruling was preceded by a (non-binding) opinion of Advocate-General (AG) Rantos (adopted on 15 December 2022) finding that FIFA and UEFA’s approval and supervision rules are not intrinsically incompatible with the EU rules on competition, as inter alia they respond to legitimate objectives inherent in sport and would be required for the proper functioning of competitions. Thus, the mood of the EU judiciary appeared (temporarily) favourable to the incumbent football associations, adding to the general public’s massive demonstrations of loyalty toward the organisers of the beloved UEFA Champions League.
The findings of the ECJ
In the ruling, the ECJ once more recognised the specificity of sport, whose economic activities present certain characteristics, such as the creation of associations to which regulatory and supervisory powers, including the power to impose sanctions, are generally attributed.
Nevertheless, the organisation of European football matches and the exploitation of the media rights are economic activities subject to EU competition rules and respect the freedoms of movement, in particular the free movement of workers. As it could be expected, the ECJ also recognised that FIFA and UEFA hold a dominant position on the market for the organisation and commercial exploitation of international matches among European football clubs.
The ECJ also found that the rules of FIFA and UEFA on the prior approval of international football competitions among clubs, such as the European Super League, constitute an abuse of dominance and, as such, are contrary to European competition law. In the ECJ 's view, the fact that a dominant enterprise – such as FIFA and UEFA – organises football events while, at the same time, enjoying the power to determine the conditions under which competing enterprises may enter the market of the organisation of competitions highlights a conflict of interests.
Given this, the powers of approval, supervision and sanction should be designed to ensure that their exercise be transparent, objective, fair and proportionate. However, the ECJ found that the powers of FIFA and UEFA are not subject to any such criteria, ultimately leading to the conclusion that the football associations abused their dominant position.
The ECJ reached similar conclusions regarding the exploitation of the commercial rights relating to football competitions, where it (obviously) observed that FIFA and UEFA's rules can be detrimental to all market players, i.e. European football clubs, media companies as well as consumers and viewers, as these would be prevented from enjoying new and potentially innovative or interesting events. The assessment of the applicability of the exceptions under Article 101, para. 3, TFEU was left to the referring Spanish courts, with the ECJ’s indicating that, under these circumstances, the grounds for the application of such exception would be difficult to demonstrate.
The way forward
The ruling brought the ECJ to again consider the intersections among sports rules, the exploitation of the rights relating thereto and the economic rules of the EU Treaties. The most famous (but not the only) precedent is certainly the judgment in case C-415/93 URBSFA v Jean-Marc Bosman, having acknowledged the right of EU football players to sign for another club at contractual expiration without a need to pay any transfer fee.
Like the Bosman case, the ruling on the Super League has the potential to dramatically reshape the entire market of the organisation of football events and competitions. These may actually no longer respond to the dominance of traditional football powerful incumbents, FIFA and UEFA, but to the initiative of bold and, most of all, well-funded competitors supported by the main European football teams in the continent.
It should be stressed that the finding of abuse of dominance of FIFA and UEFA does not amount to an approval of the Super League’s proposed competitions. For the time being, the ECJ served a (heavy) yellow card to the existing football associations: the ball is now in the field of the latter, whose next moves will determine whether they will remain (or fail to remain), the main reference in the organisation of European football events.
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