Competition Law in European Sport Flashcards

1
Q

Which rules falls outside the scope of the EU Treaty?

A

Purely sporting activities fall outside the scope of the treaty, while the EC Treaty would apply to economic activities.
- However rejected by Meca-Medina

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Explain the test of Meca-Medina

A

The first step of the test would be to determine whether the sports association that adopted the rule would be considered an undertaking or an association of undertakings.
The second step concerns the issue whether the challenged rule in question restricts competition within the meaning of art. 101 or constitutes an abuse of a dominant position under art. 102.
The third step will be to determine whether trade between member states is effected.
The fourth step concerns whether the rule may fulfil the conditions of art. 101 (3) TFEU.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is an undertaking?

A

A sports association that carries out an economic activity.

A sports association would be an association of undertakings, if its member carried out an economic activity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Explain the principles in the Wouter decision

A

Account must be taken of:

  1. The overall context in which the rules were taken or produced their effect and of their objectives and
  2. Whether the restrictive effects were inherent in the pursuit of the objectives and
  3. the proportionality of the rule in light of the objective pursuit.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What should be learned from the Meca-Medina case?

A

That from now on it is not possible to pre-determine an exhausted list of sporting rule, which may or may not breach the competition principles embedded in art. 101 and 102 TFEU.
Any sporting rule must be assessed on a case-by-case basis.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What act in important in US Anti-trust legislation?

A

The Sherman Act - especially the two first sections.

The purpose was to promote consumer welfare and to protect against the powers of big business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What does § 1 of the Sherman Act state?

A

That every contract, combination in the form of trusts or otherwise, in restraint of trade, is declared to be illegal.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What two types of analysis that the US Courts developed - explain them?

A

The per se rule and the rule of reason.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Explain the Bassett v. NCAA case

A

A case concerning whether a coach had violated NCAA rules concerning recruitment practises. The court found that the rules and the sanctions were not commercial - therefore that rules and the enforcement hereof fell outside the scope of anti-trust law.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Explain the Warrior Sports Inc. v. NCAA case

A

Involved the pertinent NCAA rules on the specifications of Lacrosse sticks.
The Court again ruled that the NCAA rule was not commercial in nature and therefore not subject to challenge under the Sherman Act.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Explain the single entity defence

A

The Sherman Act requires a plurality of actors - therefore many professional leagues have other time claimed that they were immune from anti trust laws because they were a single entity.
NOT accepted by the US Courts - the Courts sees the leagues as combinations of competitors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What does the mean that the MLS have a syndicated ownership model?

A

That the MLS owns all the teams - each team has two types of shareholders: Investor operators and passive investors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Explain the Fraser v. MLS case

A

The players claimed that MLS violated section 1 of the Sherman Act. All player contracts were made with the league (designated player rule). The players stated that they were able to obtain higher salaries if they negotiated directly with the franchisers.
The Court did not find a violation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Explain the American Needle Case

A

NFL tried to invoke the single entity defence. NFL had granted a 10 year exclusive headware license with another sports manufacturer than American Needle.
The Supreme Court reversed the decisions. The Court found that the teams were acting as separate economic actors pursuing separate economic interests.
The Supreme Court again dismissed the Single Entity Defence.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Explain § 2 in the Sherman Act

A

Every person, who shall monopolise or attempt to monopolise shall be deemed guilty of a felony.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is important in relation to monopolisation cases?

A

The definition of the relevant market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How is the relevant market defined?

A

The area of effective competition within which the defendant operates.
Product market and geographical market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

When in § 2 of the Sherman Act violated?

A

When

1) A monopoly power
2) Proof of unlawful conduct by the alleged monopolist.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the purpose of EU competition law?

A
  1. Promotion of a competitive market economy

2. Prevention of barriers to integration of the single European market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Explain Art. 101 TFEU

A

All agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market….. is prohibited.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What does art. 101 prohibit?

A

Cartel-like agreements between two or more undertakings, which may affect Member State trade and which have an anti-competitive purpose or effect.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is an undertaking within EU law?

A

A natural or legal person engaged in economic or commercial activities involving the provision or goods or services.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Is an employee an undertaking?

A

As a starting point no - therefore an agreement between an undertaking and one of its employees will not be subject to art. 101.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

How is art. 101 limited?

A

The restriction must be “appreciable” - significant - de minimis principle.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Explain the Maschinenbau test

A

It must be possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law of a fact that the agreement in question may have an influence, direct or indirect, actual or potential on the pattern of trade between member states.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Explain art. 101 (3)

A

The provisions in art. 101 (1) may be declared inapplicable in case of:

  • any agreement between undertakings,
  • any decision by associations of undertakings
  • any concerted practise

which contributes to improving the product or distribution or goods while allowing consumers a fair share of the resulting benefit and which does not:

  • impose on the undertakings concerned restrictions, which are not indispensable to the attainment of these objectives
  • afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Explain art. 102 TFEU

A

Any abuse of one or more undertakings of a dominant position within the internation market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between member states.

E.g. directly imposing unfair purchase or selling prices, limiting production, applying dissimilar conditions etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

When is a breach of art. 102 TFEU established?

A
  1. A dominant position
  2. Abuse of that position
  3. An effect on inter-member trade caused by the abuse.
29
Q

How is a dominant position defined?

A

A position does not preclude some competition, but enables the undertaking which profits by it at least to have an appreciable effect on the conditions under which that competition will develop.

30
Q

Explain the United Brands case

A

A case regarding the relevant market - fruit or bananas.

31
Q

What is characteristics of sports broadcasting?

A
  • Big business - huge revenues
  • Collective selling
  • Long term exclusivity
  • Black-outs to secure stadium attendance.
32
Q

Why is the reserve clause exempted from anti-trust laws in regards to baseball?

A

Because of the Federal Baseball case

33
Q

What did the Sports Broadcasting Act of 1961 do?

A

The act immunised the pooled sale of telecast rights to selected professional sports.
Should make it easier for the league to pool their rights.

34
Q

Explain the Black out provision in section 1291 (2)

A

Access to prohibit the televising of games within the home territory of a member club of the league on a day when such a club is playing a game at home.

35
Q

How was the black out provision changed in 1973 in the US?

A

The Congress enacted legislation requiring the league to lift the local black out of any pooled telecast, if all the tickets were sold 72 hours or more in advance

36
Q

Why has collective selling of sports media rights given rise to competition law issues within the EU?

A

Because such an activity would traditionally be seen as a horizontal restriction according to art. 101 - similar to a cartel arrangement.
However weaker clubs has benefited from the collective selling by receiving an equal share of the revenues.

37
Q

How did the Commission think that collective selling arrangements restricted competition?

A
  1. They amounted to a price-fixing mechanism
  2. The availability of rights to those particular sports event was limited
  3. The market position of the most important broadcasters were strengthened.
38
Q

What is the positives of collective selling of sports media rights?

A

That the collective selling generate a higher revenue compared with an individual sale - positive for smaller clubs.

39
Q

Explain the UEFA Champions League case in regards to collective selling

A

The Commission exerted under art. 101 UEFA’s joint selling arrangements regarding Champions League. The Commission thereby accepted joint selling of football media rights.

40
Q

What was characteristic regarding the sale of television rights to the Champions League?

A

That the available rights were unbundled into several packages enabling more than one broadcaster to acquire rights to the Champions League.
The clubs could exploit certain unsold rights.

41
Q

Explain the European black out provision

A

UEFA has allowed its national football associations to block the broadcast on television of football matches during a period of time on match days in order to protect stadium attendance.

42
Q

Which country does still have black out provision?

A

England - prohibits the broadcasting of football matches on Sunday afternoon.

43
Q

Explain the Murphy case

A

A case regarding a lady who used a decoder card to transmit matches that had been blacked out.
The ECJ found that legislation prohibiting the import, sale or use of foreign decoder cards was contrary to the freedom to provide services and could not be justified

44
Q

What is the difference of black out in the US and the EU?

A

In the US the black out provisions are far more utilised. In EU the phenomena is only known within football.

45
Q

Why is licensing often given on a long-term exclusive basis?

A

Because the high value of sports event is very short-lived compared with other forms of entertainment.

46
Q

What is the concerns of long-term exclusivity?

A

That a buyer would be able to establish a dominant position on the downstream market reducing the scope of effective competition - three year/seasons exclusivity would appear to be the acceptable level.

47
Q

What requirements have the Commission set up regarding exclusive contracts in oder to limit the risk of market foreclosure?

A
  1. A reasonable amount of different packages.
  2. Meaningful packages.
  3. Earmarked packages for special markets/platforms
  4. No conditional bidding.
48
Q

What is ownership restrictions?

A

Restrictions preventing players, stockholders, management or other employees from owning or having any financial interest, directly or indirectly in any other member club of the league.

49
Q

What is cross-ownership restrictions?

A

Restrictions prohibiting their team owners from owning or controlling a professional sports team in another sport.

50
Q

Explain the NASL v. NFL case

A

The NFL had set up cross-ownership restrictions - the court ruled that these restrictions were in violation of the Sherman Act § 1 - since it prevented NASL from attracting potential new team ownerships - could not be justified under a rule of reason test.

51
Q

What has the public listing of football clubs meant in regards to ownership restrictions?

A

That one or more shareholders jointly has been given the opportunity to own stakes in several clubs at the same time.
However, UEFA’s rules states that multiple ownership in clubs participating in a UEFA club competition is not possible.

52
Q

How is relocation regulated in the US?

A

In the US many league have restrictions on how franchises are bought, sold and relocated.
In many cases relocation has been denied by the court-.

53
Q

What did the Court rule in the Raiders case?

A

The case concerned relocation - it was the first time a league governance provision was found to violate US anti-trust laws. The court found that the ban on franchise movement was anti-competitive since it helped to sustain local monopolies.

54
Q

Is relocation of clubs within the same Member State of EU a problem?

A

No, it does not affect the competition rules of the EC Treaty.

55
Q

Explain the Mouscron case

A

A case against Lille and UEFA regarding UEFA’s decision not to allow the UEFA Cup game between Mouscron and FC Metz to be held at Lille’s stadium.
The Commission considered that the home-and-away rule was needed to ensure equality between clubs.
UEFA won the case.

56
Q

What is the purpose of acquisition deadlines?

A

To promote the equality of competition by controlling the club’s access to new talent during the season.

57
Q

How has endorsement of sports products been regulated?

A

US courts have been involved with anti-trust issues concerning sports organisations decisions on what particular types of sports equipment should be allowed or not.

58
Q

What did the Danish Tennis Federation case concern

A

The endorsement of sports products - the endorsement of certain tennis ball. The balls were labeled official, but were no different than the balls produced by other manufactures. No allowed no label official if not entered into a sponsorship agreement. NOT allowed.

59
Q

Which case have been dealt with in the US in relation to cases between competing leagues?

A

American football league v. NFL - AFL alleged that NFL had a monopoly in the relevant market and was misusing it by seeking to locate new franchises.
Court ruled that NFL did not have a monopoly power in the relevant market - NFL had now attempted to monopolise the industry.

60
Q

Why is the monopolisation perspective different in EU?

A

Because as a rule European sport organisations are monopolies within their particular sports as a result of the European model of sport - one federation per sport principle.

61
Q

Explain the MOTOE case

A

The case concerned a Greek association with the purpose of organising motor cycle competition in Greece.
The greek public authorities to granted authorisation to the organisation. The ECJ held that when member states had granted regulatory powers to a sporting body, where economic activities were involved, such a grant might be liable to leave the sporting body to abuse its statutory dominant position. Therefore, the grant of special powers is under certain circumstances contrary to the treaty.
THE RISK OF ABUSE IS ENOUGH

62
Q

Explain the Charleroi case

A

Charleroi joined G14 and challenged FIFA’s mandatory player release rule for international matches on national teams.
The case was settled by the Court but was however the most serious threat so far to the essential function of the pyramid construction of European Sports where one federation has the power to regulate against the economic interests of member clubs.

63
Q

What is the purpose of the FFP Regulations?

A
  • To introduce more discipline in football financing
  • To decrease pressure and salaries and transfer fees
  • To encourage clubs to compete with their revenues
  • To encourage long-term investments in the youth sector.
64
Q

What is the background for the FFP Regulations?

A

Deep financial difficulties in football clubs - deep economic crises and recession for many years.

65
Q

What does the FFP Regulations rule?

A

The UEFA has introduced an obligation for European clubs over a period of time to balance their books or break even, meaning that the cannot spend more than they earn.
Only relate to participation in the Champions League and the Europe League - however most leagues live up to the FFP Regulations.
Every team who believes to be able to qualify for the competition must apply for a UEFA club license. Lot of criteria must be fulfilled in roder to obtain a license.

66
Q

Explain art. 59 in the FFP Regulations

A

A monitoring period over which a licensee as assessed for the purpose of the break even requirement.
Assessed over three periods T, T1, T2 - current, last and next season. Differences between income and expenses - the break even result - break even surplus or break even deficit.
There are some acceptable deviations in art. 61 - allowances or certain aggregate break even deficits. 2018 - 30 million EUR for the monitoring period.

67
Q

What are the sanctions in the FFP Regulations?

A

Non-fulfilment of the criteria does not automatically lead to a refusal of a license, but may lead to a sanction defined by the licensor.
Any breach or the regulations may be penalised by UEFA in accordance with the procedural rules governing the UEFA.

68
Q

Which cases have CAS rendered regarding non-compliance on club licensing regulations?

A

Gyori and Bursaspor - both clubs to failed to disclose correct information required under the UEFA Club Licensing Regulations. The disclosure obligations is essential for UEFA for assess the financial situation of the clubs.
Bursaspor case - fine EUR 250.000 and suspension for 3 years.

69
Q

Is the FFP Regulations anti-competitive?

A

It can be argued that the regulations may create a barrier to entry into the market - could be anti-competitive within Art. 101 and 102 TFEU.
However important with sporting criteria and a licensing system.
The compliance of the licensing system with the EC Treaty is not yet ruled on.