AGGIS: Limits to the autonomy of sport: EU law

Introduction

Athletes have rights and obligations deriving from ordinary law but also from the rules of the (international and national) sports federations they are registered with (Parrish, 2003a). Many of those rules are captured by the EU’s internal market competences. The establishment of an internal market(1), the integration of the Member State’s economies as a means to achieve the objectives of the Union such as a balanced economic growth,  remains one of the principal tasks entrusted to the Union(2). For decades now, the Treaties have defined the  objective of establishing an internal market as the creation of “an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured”(3). In order to secure the ability  to  deploy  factors  of  production  freely  across  frontiers,  the  Member  States  are prohibited to discriminate against  goods, persons, services and capital from other Member States  (EU  freedom  of  movement  law). Through the  latter  so-called  “four  fundamental freedoms”(4), the founding  fathers  of  the  European Union ultimately wanted to open up economic activity within the  whole  Union.  In  the  end,  they  hoped  that  the  process  of economic  integration  would  progressively  lead  to  a  form  of  political  union  among  the Member States that would proliferate peace and prosperity in Europe.

Within the internal market, there should be free competition, favouring an efficient allocation of  resources(5). The EU “rules on competition” (EU  competition law) comprise  rules prohibiting distortion of competition by undertakings and rules restricting State Aid granted to undertakings. Competing undertakings are said to ensure further innovation and to motivate undertakings to develop more efficient methods of  production. This should lead to lower prices, high-quality products and ample choice for the consumer. In this context, EU rules on competition, enshrined in articles 101-109 of the Treaty on the functioning of the European Union (TFEU), are designed to make EU markets work better, by ensuring that all companies compete equally and  fairly on  their merits. This benefits consumers, businesses and the European economy as a whole (European Commission, 2010).

It is generally acknowledged that sport bodies eschew any kind of state interference in their sector  and  that  this  has  urged  them  to  adhere  to  a  strong  protectionist  vision  of  sports governance (Parrish, 2011, pp.  215-216). Indeed, the world of sport has traditionally been regulated  in  all  its  aspects  through a self-governing network with its own rules and regulations. At the same time, governments were reluctant to intervene in the sports sector as, even now, they tend to regard it more as a cultural industry rather than a business. For almost a  century,  the  sporting  network  was  able  to  exercise  its  self-governance  without  any significant interference from states or other actors. Since rules issued by sporting bodies are captured by  the EU’s Internal Market competences, the Court of Justice of the European Union (CJEU) proved to be a  suitable venue for unsatisfied stakeholders to challenge the decisions made at the top of the governing associations of their sports. In its first ever ruling issued in the area of sport, the Walrave ruling(6) in 1974, the CJEU had to establish whether and to what extent sporting activities are subject to the provisions in the Treaties laying down prohibitions. The Court ruled firstly that the practice of sport is subject to EU law only in so far as it constitutes an economic activity within the meaning of article 2 EEC Treaty (now article 3 Treaty on European Union). Thus, activities which are of sporting interest only, and therefore are not of an economic nature, are not subject to EU law(7).

It is however very difficult to define non-economic sporting regulations, which in principle fall outside the scope of EU law. In its 2006 Meca-Medina(8) ruling, the CJEU ruled that even if a rule is purely of a sporting nature, and has nothing to do with an economic activity, this does not mean that the activity governed by that rule or the body which issues such rules are not governed by the Treaty. Thus, the simple notion that a rule or regulation would have a purely  sporting  nature  is  not  sufficient  to  exclude  whoever  runs  this  activity, or the organisation which has created it, from the scope of the Treaty. Some authors feared that actors in the sports world would be encouraged by this ruling to challenge actions by sports associations in their disadvantage on the basis of EU law, opening a “Pandora’s box” of potential legal  problems  because  all  disciplinary  measures  in  the  field  of  sport  can  be considered as violating EU (competition) law (see e.g. Infantino, 2006; Hill, 2009).

However, it must be noted  that  the Court’s  ruling essentially does  not derogate from its previous treatment of sport. For instance, the so-called sporting rules sensu stricto will most definitely continue to fall outside the scope of EU law(9).

Through the years, the CJEU has developed a solid body of case law on the application of EU law on the organisational aspects of sport. That coherent and consistent body of case law can be labelled “EU sports law”, as it constitutes a distinct legal approach to applying EU law to sporting situations (see Parrish, 2003b)(10). This paper provides a concise overview of the application of EU law on sporting rules as it delineates the  boundaries of the autonomy of sport with regard to EU law. Finally, it provides an overview of the different  methods of enforcement of EU law on sports bodies and the legal and political limitations thereof.

Notes:

•  (1) Since the Single European Act (SEA, 1986), the term “common market” is gradually replaced by  “internal market”. Since the entry into force of the Lisbon Treaty, the internal market is the sole  expression of the objective of market integration pursued by the EU.

• (2) Article 3(3) Treaty on European Union (TEU)

• (3) Article 26(2) Treaty on the Functioning of the European Union (TFEU)

• (4) The foundations of the internal market are the Treaty provisions on the free movement of goods (articles 28 to 37 TFEU), free movement of persons, services and capital (articles 45 to 66 TFEU)

• (5) Articles 119(1) and (2), 120 and 127(1) TFEU.

• (6) CJEU, Case 36/74 Walrave [1974] E.C.R. 1405.

• (7) Ibid., paras 4-7. This was later confirmed in several cases.

• (8) CJEU, Case C-519/04 Meca-Medina & Majcen v. Commission [2006] E.C.R. II-3291.

• (9) In its staff working document annexed to the 2007 White Paper on sport, the European Commission lists a few types of “pure sporting rules” that – based on their legitimate objectives – are likely not to breach EU law: rules fixing the length of matches or the number of players on the field; rules concerning the selection  criteria for sports competitions; rules on “at home” and “away from home” matches; rules preventing multiple ownership in club  competitions;  rules  concerning  the  composition  of  national  teams;  rules  against  doping;  and  rules concerning transfer periods. See European Commission (2007b, p. 39).

• (10) Under EU law there is no doctrine of precedent. The previous case law of the CJEU is neither binding on itself, nor on national courts. In practice, the CJEU has been very reluctant to depart from its earlier case law, in particular because of the need for legal certainty and equality (see Raitio, 2003).

Read the full report "Limits to the autonomy of sport: EU law" here

This report was created as a part of the project 'Action for Good Governance in International Sports Organisations (AGGIS)', which was initiated by Play the Game/the Danish Institute for Sports Studies and awarded funding from the European Commission to contribute to the Commission’s so-called ‘Preparatory Actions’ initiative which will pave the way for the EU’s future strategies in the field of sport. Read more about AGGIS here