Lex Sportiva and EU competition law: FIFA
autonomy and Regulation on Working with
Intermediaries compatibility with Art. 101.1.
TFEU
MASTERS THESIS
Author:
Laura Ozolina
Student ID: 11783338
EU Competition law and regulation track
lauraaozolina@gmail.com
Supervisor:
Dhr. dr. L.J. (Laurens) Ankersmit
Abstract
The purpose of the thesis is to examine the supranational status of sports governing bodies and their ability to regulate the field of sport as non-state actors. It gives specific examples related to FIFA throughout the text as additionally paying attention to the regulatory power of FIFA and how its regulations interact with EU competition law and possibly infringe it. The methodology used to answer the set questions is comprised of descriptive and explanatory research methods. The evaluative and advisory approaches are applied, providing a normative outlook on the issue.
The purpose of the first chapter is to analyze whether and to what extent the sports federations can be regarded as autonomous and assesses the development of lex sportiva. The second chapter continues with a particular focus on the lex sportiva relationship with the legal order of the EU. Both laws are known to have a specific legal nature; therefore, the work examines their correlation and conflict between sports law provisions and the governing authority of FIFA. The chapter pays attention to EU competition law, and the CJEU case law is analyzed to see whether the Court safeguards principles of proportionality and good governance. Instruments on how the EU can trick FIFA into compliance are set out in greater detail.
The main purpose of the third chapter is to analyze the 3% remuneration cap of intermediaries introduced in Art. 7.3. of the Regulations on Working with Intermediaries. A throughout analysis is carried out to assess whether the remuneration cap is compatible with Art. 101.1. TFEU and whether it produces anticompetitive effects in the market. The final chapter addresses the coming reform of the intermediary regulations and presents ideas on how to ensure the coexistence of football regulations with EU competition law.
The aim of the thesis is reached. The conclusion presents the overlap between lex sportiva and EU law. The findings also emphasize that Art. 7.3. of Regulations on Working with Intermediaries constitutes price-fixing which can be legally challenged in front of the CJEU and the Courts of the MS (as has been the case in Germany).
Table of contents
Abstract ... 2
Table of contents ... 3
List of abbreviations ... 4
Introduction ... 5
1. Transnational setting of sports governing bodies ... 6
2. EU Competition Law and Sport ... 11
2.1. EU Sports Law ... 12
2.2. Case law development of CJEU ... 13
2.3. Co-existence of sports law and EU law ... 15
2.4. EU and FIFA - a symbiosis ... 19
3. Regulations on Working with Intermediaries under EU law ... 21
3.1. The development of FIFA RWI ... 21
3.1.1. Main differences introduced by RWI ... 22
3.2. Backlash of the RWI ... 23
3.3. RWI under Art. 101.1. TFEU ... 25
3.3.1. Deutschen Fussball Bund experience with RWI ... 29
3.4. Reform of RWI ... 32
Conclusion ... 34
List of abbreviations
AFC Asian Football Confederation CAF Confederation of African Football CAS Court of Arbitration for Sport
CJEU The Court of Justice of the European Union
CONCACAF Confederation of North, Central American and Caribbean Association Football
CONMEBOL Confederación Sudamericana de Fútbol
EU European Union
FIFA The Fédération Internationale de Football Association LG Landesgericht
MS Member State
NFA National Football Association OBL Oberlandesgericht
OFC Oceania Football Confederation PAR Players’ Agent Regulations
RWI Regulations on Working with Intermediaries TFEU Treaty on the Functioning of the European Union UEFA Union of European Football Associations
Introduction
Taking into account that football is the most popular sport in the EU, its regulation deserves special attention. Long gone are the days when football was played and watched for pure enjoyment. Nowadays, essential parts of the football world are profit, jobs and exercise of influence. With a lot of international sports federations, it often is unclear who is responsible for matters related to sports governance. Doubts often arise whether those are the federations such as FIFA being a non-state actor or are they national courts and the judicial systems of MS and the EU. Opinions differ, and therefore, it is crucial to examine the existence of sports law or in other words - lex sportiva.
While the EU has supplementary competence in the field of sport under Art. 6 TFEU, Art. 165 TFEU states that the special nature of sport shall be taken into account by the EU upon exercising its functions. Nevertheless, it is important to question whether the nature of sports really is that different from the other industries that fall under the reach of the EU jurisdiction.
Even though FIFA, acting as a non-state actor, issues regulations that apply to National Football Associations (NFAs) across the world, it needs to be noted that a significant part of the football market functions within the EU itself. By subjecting NFAs to its regulatory power and often jurisdiction FIFA regulations face the special nature of the EU legal order. Both regard themselves as autonomous, yet it is vital to examine whether the overlap between both occurs.
In 2015 after a reform of Players’ Agents Regulations (PAR) FIFA introduced Regulations on Working with Intermediaries (RWI). RWI in their Art. 7.3 set out a strict benchmark of 3% that should be paid to the intermediary representing a particular player or football club in dealings with transfers of players or employment contract conclusion. Therefore, the intermediary acting on behalf of the agent is not eligible to more than 3% of remuneration constituted from represented player’s basic gross income or the closing transfer fee paid for the transfer of the player.1 To put things into perspective, before the amended regulations, some agents earned up to 20% of the transfer fee paid.
The main aspect examined in the thesis is the question arising from Art. 7.3. of RWI and whether it is compatible with the EU competition law, specifically Art. 101.1. TFEU and to what extent, if any, it distorts the competition in the market. Sports and EU competition law have been discussed in an ongoing debate for a while now, but has it come to a common
conclusion? The present thesis outlines the current issues that face football regulations in their interaction with EU competition law. What makes the present work unique is the clear assessment of RWI pointing out their anticompetitive effects after having engaged reader in a scholarly debate.
While parts about competition law follow internal descriptive perspective focusing on what the law is, the questions of how and when are answered by the explanatory research. The explanatory research answers the proposed questions in a more detailed way. However, the third chapter develops an evaluative approach in order to come to a conclusion which would answer whether the RWI breach EU competition law or to what extent do they impair the functioning of it. A normative opinion, therefore, is formed. The thesis ends with an advisory approach, which, after the analysis, will aim to predict the future developments of reform concerning RWI.
To give a more precise indication, the first chapter of the work analyzes the transnational development of lex sportiva and sports governing bodies as well as their autonomy. The second chapter narrows the debate to lex sportiva interaction with EU law and scrutinizes the development of the CJEU case law in matters of sport and the path to the expansion of the EU competence through case law. The third chapter evaluates RWI and their Art. 7.3. in light of the Art. 101.1.TFEU and assesses the impact it has on EU competition law. The final chapter sketches out the coming reform of the RWI and suggests ways on how to minimize the hampering of competition. In the end, the thesis draws a clear conclusion.
1. Transnational setting of sports governing bodies
The present chapter provides an explanation of sports organizations in the transnational setting. It is essential to understand where they stand and whether they regard themselves as autonomous with their own law governing their actions. It needs to be understood whether sports organizations such as FIFA self-regulate and if they do who holds them accountable. If one looks at the sports organizations, it often is unclear how exactly they are regulated. Most know that they have their regulations, and therefore, they have their own body, which oversees compliance with the issued regulations and statutes. In an example of FIFA, it is the Disciplinary Committee who takes action against non-compliance with FIFA regulations.2 It is a very active body set up of professionals with legal training overseeing the overall
2 FIFA ‘FIFA Disciplinary Committee sanctions Macau Football Association’ (27 June 2019)
https://www.fifa.com/worldcup/news/fifa-disciplinary-committee-sanctions-macau-football-association
compliance with the code of conduct and regulations of all aspects governing the activities of the members of FIFA. It is not national courts that are responsible for enforcing the norms; therefore, sports organizations can be autonomous and exercise the ability to govern themselves.
As proposed by Foster, the sports law shall be treated as a completely autonomous legal order with its tools for enforcement that have been established by the international sporting organizations. The regulations of the sporting organizations allow them to govern their members by subjecting them to their jurisdiction entirely. The ability to go over the national jurisdictions allows avoiding the fragmentation of national disparities, therefore, ensuring the consistency of the transnational order. The immunity lets the sports organizations safeguard their unique nature and protect the addressees and participants of the sporting sphere.3
The emergence of lex sportiva has been discussed for decades, as indicated by Simon4 and Nafziger5. As asserted by Teubner, it has a distinct characterization of being a law without a state.6 Lex sportiva, as explained by Foster, is a distinct type of law comprised of universal principles solely claimed to be applied to disputes of sporting nature by the Court of Arbitration of Sport (CAS).7 In order to handle disputes that arise during the Olympic Games, lex sportiva as described by Schultz, has the supremacy to be applied over national laws of the country where the infringement occurs. The example derives from the Olympic Games in Turin where the World Anti-Doping Code took supremacy over anti-doping law of Italy.8
States have not developed the concept; instead, distinct organizations did it through different processes of globalization across different sectors of society. Arguably such a characteristic is too distinct even to be compared to the ones of nation-states; therefore immediately outlining the unique nature and impact of it.9 It is often associated with distancing itself from politicization; however, the recent FIFA corruption scandal proves that it is not the case. 10
3 Ken Foster, ‘Global Sports Law Revisited’ (2019), 17(1) ESLJ http://doi.org/10.16997/eslj.228 accessed 4
July 2019
4 Gerald Simon, Power of sport and legal order of state (Puissance sportive et ordre juridique étatique), (LGDJ
1990)
5 James A. R. Nafziger, ‘International Sports Law as a Process for Resolving Disputes’ (1996), 45(1)
International and Comparative Law Quarterly 130
6 Gunther Teubner, ‘Global Bukowina: Legal Pluralism in the World-Society’ in Gunther Teubner (ed), Global
Law Without a State (Ashgate Publishing Company 1997)
7 Ken Foster, ‘Lex Sportiva and Lex Ludica: the Court Of Arbitration for Sport’s Jurisprudence’ (2005), 3(2)
ESLJ http://doi.org/10.16997/eslj.112 accessed 4 July 2019
8 Thomas Schultz, ‘The Lex Sportiva Turns Up at the Turin Olympics: Supremacy of Non-State Law and
Strange Loops’(2006), SSRN https://papers.ssrn.com/sol3/papers.cfm?abstract_id=896673 accessed 4 July 2019
9 Teubner (n 6)
10 Agence France-Presse, ‘Former UEFA chief Michel Platini arrested after probe into awarding of 2022 World
Nevertheless, other arguments exist, namely concerning the development of the global law, which in the case at hand will apply to sports law and its transnational character. Going as far back in history contrary to what Immanuel Kant wrote in Perpetual Peace, the sports law has developed by professional communities and specific social networks that go beyond the boundaries of nation-states as asserted by Teubner.11 By taking into account the highly specialized nature of FIFA and the technical requirements for its oversight, its regulations and governance have developed through a self-organized process.12 Moreover, sports law still can be regarded as staying in close proximity to other fields, which might affect its development or application, such as the importance of the rule of law and outside interests.13 While assessing the rule of law in FIFA, the focus is paid to its interaction with EU law and established norms of proportionality and supremacy of it. The last important aspect towards the formation of a global sports law is the unity of it.14 FIFA wants to ensure a consistent application of its regulations and the compliance of the addressees. A threat to such an approach could be the wish to institutionalize such variation by different regional agencies. In the case of FIFA, there is no perception of a threat since the regulations aim at NFAs who are responsible for their enactment at the national level. That ensures the effective application of the regulations to their primary addressees, which are national actors. As will be seen in the later chapters the RWI concern addressees which are NFAs who engage in the services of intermediaries by players and clubs.15
In order to examine the transnational character and examples of globalization in sports, one can observe a shift of power towards international federations. FIFA has been able to successfully commercialize the biggest single-event sporting competition in the world – FIFA World Cup,16 which helped to boost the revenue of FIFA in 2018 to 1814 million US dollars. The revenue is measured to be 65% higher than the actual budget of FIFA, making it the most powerful sporting organization in the world today.17
https://www.scmp.com/sport/football/article/3015022/former-uefa-chief-michel-platini-arrested-after-investigation accessed 5 July 2019
11 Gunther Teubner, Law as an Autopoietic System (Blackwell 1993)
12 Gunther Teubner, ‘Autopoiesis and steering: how politics profits from the normative surplus of capital' in
Roel J. in 't Veld, Catrien J.A.M. Termeer, Linze Schaap, Mark J.W. Martinyuk (eds), Autopoiesis and
Configuration Theory: New Approaches to Societal Steering (Springer 1991)
13 Teubner, ‘Global Bukowina: Legal Pluralism in the World-Society’ (n 6) 14 ibid
15 FIFA RWI (n 1) Art. 1
16 FIFA, ‘FIFA World Cup’ https://www.fifa.com/aboutfifa/worldcup/ accessed 5 July 2019
17 FIFA, Financial Report 2018 https://resources.fifa.com/image/upload/xzshsoe2ayttyquuxhq0.pdf accessed 5
The powerful status helps FIFA execute its regulatory autonomy through different means. It has established itself on top of the football hierarchy. Six different confederations comprise FIFA – AFC, CAF, CONCACAF, CONMEBOL, OFC and UEFA.18 Each of the confederations comprises itself of NFAs which in turn are formed by national football clubs. This complex set up helps FIFA bind all the actors by interlinked rules.
The regulatory framework, while being created by FIFA itself constitutes a special legal order. That is observed through the control the FIFA imposes through its judicial bodies. The Disciplinary Committee has self-proclaimed jurisdiction to rule over any breach of FIFA regulations which is not covered by the jurisdiction of other bodies.19 FIFA Disciplinary Code is a substantive law that covers all competitions and matches governed by FIFA. It has an extensive scope of its application concerning not only NFAs, the players and officials but also spectators.20 Apart from the Disciplinary Committee, two other judicial bodies exist, namely the Appeal Committee and Ethics Committee.21 Specific articles in the Disciplinary Code allows an appeal to CAS, while some articles render the judgment by the Disciplinary Committee final. Those nevertheless mainly concern the suspension of players.22 CAS appeals deal with the failure to respect the decisions of the FIFA Disciplinary Committee.23 Dispute Resolution Chamber which has jurisdiction over regulations on the status and transfer of players oversees them. As seen by Blackshaw, the arbitral awards can only be enforced through FIFA’s statutes and emphasize the extra-judicial dispute settlement in matters of sport.24
As asserted by Foster throughout the years, the ability to appeal to CAS indicates the existence of lex sportiva since it allows the CAS to develop the case law supranationally. That correlates to notion introduced by Beloff stating that a constitutional equilibrium should exist between the courts and sports federations.25 Blackshaw has also indicated that the ability for CAS to build its extensive case law serves as a development towards a more consistent lex sportiva.26 As Foster puts it, the CAS allows the development of lex sportiva due to a
18 FIFA, ‘Associations and Confederations’ https://www.fifa.com/associations/ accessed 5 July 2019
19 FIFA, Disciplinary Code (2017) Art. 76
https://resources.fifa.com/image/upload/fifa-disciplinary-code-500275.pdf?cloudid=koyeb3cvhxnwy9yz4aa6 accessed 5 July 2019
20 ibid Art. 2-3 21 ibid Art 73 22 ibid Art 17 23 ibid Art 64
24 Ian Blackshaw, ‘ADR and Sport: Settling Disputes Through the Court of Arbitration for Sport, the FIFA
Dispute Resolution Chamber, and the WIPO Arbitration & Mediation Center’ (2013) 24(1) Marq. Sports L. Rev. http://scholarship.law.marquette.edu/sportslaw/vol24/iss1/2 accessed 5 July 2019
25 Michael Beloff, Tim Kerr, Marie Demetriou, Rupert Beloff Sports Law (Hart 1999) 4 26 Blackshaw (n 24)
legal tradition where the autonomy of sporting federations, in our case FIFA, is respected.27
That means that FIFA will not face interference in its decision-making process due to its sturdy nature and supranational character.
While the presented arguments might show a concise development towards a specialized approach to settling disputes and governing the sphere of sports, other noteworthy aspects, need to be addressed.
The first aspect can be described as a democratic deficit, as outlined by Habermas. There is no democratically elected parliament in the sphere of the transnational lifeworld or as in the present case in the realm of lex sportiva.28 The leading decision-makers are monopolies such as FIFA, having the responsibility in shaping the global development of football regulations. Moreover, as stated by Jennings in 1996, the main decision making power is in the hands of a few committees29 dealing with the adoption of new regulations. The picture has nowadays changed. Now FIFA consults stakeholders of football community upon the decision making process and adoption of new regulations.30 That characterizes as an improvement towards democracy and transparency of the football community.
Nevertheless, the image of FIFA remains distant and unapproachable in the daily course of action. That can also be deduced by the frequency of FIFA Congress which occurs only annually. Special emergency meetings are called in case of serious matters. Nevertheless, such meetings are rare and mainly concern budgetary matters.31
Nevertheless, contrary to what the present work presents, some scholars believe that lex sportiva does not exist. As stated by Grayson, CJEU does not rule on lex sportiva per se, the matters that come under the reach of the jurisprudence of CJEU inter alia also touch upon the aspect of the sport. In his perception, lex sportiva does not exist since it has no concept formed upon the foundation of specific administration concerning it.32 Grayson instead
27 Foster, ‘Lex Sportiva and Lex Ludica’ (n 7)
28 Jurgen Habermas, The Theory of Communicative Action, Volume 2. Lifeworld and System: A Critique of
Functionalist Reason (Beacon Press, 1987)
29 Andrew Jennings, The New Lords of the Rings: Olympic Corruption and How to Buy Gold Medals (Simon &
Schuster 1996)
30 FIFA, New Regulations on Working with Intermediaries (2014)
https://resources.fifa.com/image/upload/1417-new-regulations-on-working-with-intermediaries-2335754.pdf?cloudid=szfmmpddbsjun3t5hic9 accessed 5 July 2019
31 Tariq Panja, ‘FIFA’s Infantino Calls for Rare Emergency Meeting Amid $25 Billion’ Offer, (The New York
Times, 2018) https://www.nytimes.com/2018/04/23/sports/soccer/fifa-infantino-club-world-cup.html accessed 6
July 2019
proposes that “lex sportiva” is a set of rules that can be derived from general jurisprudential categories and therefore are applicable across different disciplines.33
More of these aspects will be given a thought in the following chapter, which examines the picture in light of EU law and its relationship with lex sportiva.
2. EU Competition Law and Sport
As the previous chapter explains, lex sportiva is a transnational concept of law without a state. It has developed autonomously by the influence of powerful sports organizations who act as monopolies in their sphere of conduct, for example, FIFA in case of football.
EU relationship with sport is a different concept that enshrines in the Treaties with the coming into the force of the Lisbon Treaty. The following subsections examine the difference between the two concepts of lex sportiva and EU sports law. It is essential to understand the interaction of lex sportiva and EU law to be able to determine whether EU law applies to matters concerning sports regulation.
For example, according to Grayson in dealing with EU law, if a case concerns the free movement of athletes, the internal market rules should be the law applicable. Following his line of argumentation, it can be established that the autonomy of EU legal order exists due to the fact that it cannot be impeded by lex sportiva since he rejects the existence of such a legal order in its essence. The fact that the profession concerns sporting activity is merely incidental. That is contrary to the development explained in the previous chapter as well as the opinion of Weatherill and Foster, who believe in the existence of lex sportiva.34
As outlined by Parrish lex sportiva is a law that developed without interstate agreements.35 Contrary to such a legal concept as lex sportiva that has transnational characteristics, the EU sports law is an entirely different concept and is examined below.
As explained by Beloff, the EU operates in the public sphere through interstate agreements and CJEU builds the jurisprudence from norms that trigger the application of internal market and competition laws to practices that also concern sport.36A different observation outlines in the sphere of lex sportiva which by its autonomy operates in a private field portrayed as a
33 ibid
34 Stephen Weatherill, ‘Is There Such a Thing as EU Sports Law?’ in R. Siekmann, J. Soek (eds), Lex Sportiva:
What is Sports Law? (T. M. C. Asser Press 2011); Ken Foster, "Is There a Global Sports Law?" in R. Siekmann,
J. Soek (eds), Lex Sportiva: What is Sports Law? (T. M. C. Asser Press 2011)
35 Richard Parrish, ‘Lex sportiva and EU sports law’(2012) 37(6) E.L. Rev. 716, 726 36 Beloff (n 25) 3
bubble. It is shaped by different tribunals and CAS, as was explained in the previous chapter by giving examples of specific judicial bodies of FIFA.
2.1. EU Sports Law
Sport did not naturally fall in the competence of the EU, and the first cases that even recognized sport as being relevant to the internal market play their role today.
After the coming into force of the Lisbon Treaty sport was explicitly mentioned for the first time in a Treaty. As provided by the Art. 6 of the TFEU, the EU has a supporting competence in the field of sport, and it can coordinate and supplement the actions of the MS. That led to the gradual enlargement of the EU competences. Art. 165 TFEU gives the EU the right to act in the sphere of the sport by upholding its unique nature. That means that the CJEU and the decisions of the Commission recognize the sports-related activity in the EU. An important aspect is a fact that the CJEU was deciding on cases concerning sport long before the coming into force of the Lisbon treaty as is shown in the case law analysis below.37 The introduced change helps the EU regulate sports activities in light of the internal market and competition rules more clearly. The inclusion of sport in the Treaties nevertheless distorts the statements of scholars. A clear example introduced in the previous chapter of constitutional equilibrium by Beloff now cannot be preserved simply because the EU is obliged to test the sporting laws with the compatibility of EU law. Therefore the envisaged equilibrium is distorted.
The gradual development of the case law has shaped the way the CJEU approaches various decisions and how it rules on different aspects of the cases – such as analysis of the purely sporting rules or actions that involve economic activity. It is additionally observed that the CJEU uses the EU law as an instrument to not let lex sportiva expand in the EU. As outlined by Weatherill and Bogaert, EU is efficiently or even aggressively using its broad competence in the internal market by applying competition law and free movement provisions to protect itself from the regulatory power of FIFA and other sporting organizations.38 The CJEU has faced the lex sportiva in numerous cases. The next subchapter examines the most important ones and discusses the function and nature of the notable changes they have brought to the EU legal order.
37 Richard Parrish, Sports Law and Policy in the European Union (European Politics) (Manchester University
Press 2003)
38 Stephen Weatherill, ‘Bosman Changed Everything: The Rise of EC Sports Law’ in Luis Miguel Poiares
Pessoa Maduro, Loïc Azoulai (eds) The Past and Future of EU Law: The Classics of EU Law Revisited on the
50th Anniversary of the Rome Treaty (Hart 2010) 480; Stefaan van den Bogaert, ‘Bosman: The Genesis of
European Sports Law’ in Luis Miguel Poiares Pessoa Maduro, Loïc Azoulai (eds) The Past and Future of EU
2.2. Case law development of CJEU
As is examined the sport was always kept within a close reach of at the time European Communities long before the Lisbon Treaty. It started with its judgment in Walrave and Koch where for the first time in the history CJEU ruled that sporting activity falls within the scope of the Treaties as long as it constitutes an economic activity. The judgment reviewed the rules of an international cyclist federation with no public authority regarding discrimination concerning the free movement of workers. The CJEU ruled that the governance of the sport could not be separated from the EU law as it affects professional employment, which forms economic activity. Therefore, the national courts of the MS could indeed apply the rules of the Treaty to ensure compatibility with the rules of a sporting organization.39;40 A conflict in such a case can be observed between the horizontal division of competences in a transnational setting. On one side, the CJEU guards the legal system of the EU, yet on the other side, international sporting organizations regulate the specific sports sector, which concerns the employment of athletes.41 Moreover, international sporting organizations such as FIFA are not only responsible for regulating the matters in the EU but also worldwide.
The change, however, was not serious until the Bosman ruling which is viewed upon as the ruling that changed everything.42
The landmark judgment in Bosman case concerned a Belgian football player whose free movement rights were restricted. The CJEU took a stance in favour of Mr Bosman and its analysis determined whether the football transfer rules were compatible with the Treaties in the sense that they complied with the legitimate aims they pursue. In the case of Bosman, they were the preservation of balance by upholding equality and uncertainty as well as urging the recruitment and training of young football professionals. At a detriment of the existing rules, the CJEU did not regard these aims as legitimate. It overruled them in favour of Mr Bosman by indicating that there are less stringent rules to achieve the set aims.43
The judgment is regarded as important. It once and for all stroke a boundary between the self-governance of sporting organizations and the character of the EU law. The ruling emphasized
39 Case 36/74 Walrave and Koch [1974] ECR 1974 -01405
40 The ruling in Walrave and Koch does not concern the discrimination in the context of sport. The composition
of teams at the time was left outside of the reach of the EU law as it concerned the international tournaments and purely sporting interest, not an economic activity.
41 Stefaan van den Bogaert, ‘Horizontality: The Court Attacks?’ in Catherine Barnard, Joanne Scott (eds) The
Law of the Single European Market: Unpacking the Premises (Hart 2002) 123
42 Weatherill, Bogaert (n 38)
the importance of the requirement to respect the EU law and its established norms.44 As
Advocate General Lenz wrote in his opinion, the EU competition law and free movement law shall be used to safeguard the co-existence of sport and EU law.45 Moreover, a sporting exception introduced in Welrave judgment46 cannot be used as an exception to circumvent the application of the rules of the Treaty.47 Such development spiked the application of competition law to sport-related matters and in the years to follow the Commission started investigation in 60 possibly anticompetitive cases.48 Nevertheless, Bosman judgment is believed to distort the autonomy of FIFA and overall sports organization ability to regulate the sports industry.49
For the first time in the ruling history, CJEU found itself interpreting the application of EU competition rules years later in Meca-Medina. Judgment regarded anti-doping rules, which were breached by two professional swimmers. The swimmers brought a claim to the Court of First Instance against the decision of the Commission stating that the rules of anti-doping interfere with the EU competition law.50 The Court of First Instance rejected the application of annulment, which led the claimants' appeal in front of CJEU. An interesting turning point in the case of the first instance is that the Chamber stated that the rules are of purely sporting interest and are not economic in nature.51 However, the CJEU gave its noteworthy analysis in
the final judgment. CJEU ruled that the mere fact that a rule preserves purely sporting interest cannot be set aside from the required analysis under the Treaty provisions. It is, therefore, establishing that the individuals and entities would still be subject to the Treaty provisions regardless of the purely sporting nature of the rule that governs their actions. More specifically, the sporting rule would have to ensure the four freedoms as prescribed in the Treaty and establish whether there are no restrictions to them.52 That is explained by asserting that if a rule is sporting by its object, does not necessarily exclude its economic impact by the effect of it. As such Meca-Medina clarified the previously established rule in Bosman on the
44 Bogaert (n 38)
45 Case C-415/93 Bosman [2005] ECR I-04921, Opinion of AG Lenz 46 Walrave (n 39) para 8
47 Bosman (n 43) para 76
48 Jean-Francois Pons, ‘Twenty-sixth Annual Conference on International Antitrust Law & Policy’ (European
Commission, 1999) http://ec.europa.eu/competition/speeches/text/sp1999_019_en.pdf accessed 5 July 2019
49 Gianni Infantino, Petros C Mavroidis, ‘Inherit the Wind: A Comment on the Bosman Jurisprudence’ in Luis
Miguel Poiares Pessoa Maduro, Loïc Azoulai (eds) The Past and Future of EU Law: The Classics of EU Law
Revisited on the 50th Anniversary of the Rome Treaty (Hart 2010) 498, 500
50 Case T-313/02 Meca-Medina [2004] ECR II-03291 51 ibid para 49
applicability of EU competition and internal market laws to rules that are of purely sporting interest.
Comparing the Meca-Medina case with the Bosman case, the Court still recognized the need for the governing rules of anti-doping in order to ensure fair and balanced competitions. The CJEU in the case of Meca-Medina asserted that the rules do not go over what is necessary and are proportionate to the objective they pursue.53 That, however, shows that lex sportiva rules now are subject to even broader interpretation under EU law, specifically competition law which can be applied to anti-doping rules.54
What can be observed by the analysis is that CJEU issues rulings on a case-by-case basis after the involvement of a scrutinized outweighing of economic objectives versus the sporting objectives that need to remain intact in order to ensure the legitimate interests of the sporting bodies. That is how the CJEU can determine which is the point of gravity – is it the purely sporting interest that serves at the detriment of the EU law but needs to be ensured or if there is no sporting interest and the parties are just trying to cover up the purely economic interests. That is a way how the sport governing bodies ensure the autonomy of their rules, which now can be tested by the CJEU limiting it.
The stance of EU law is presented as strong against the regulatory development of transnational sports organizations. In practice, the EU internal market and competition law rules apply to the private regulation of sports governing bodies. That indicates that the autonomous legal order of sports organizations, among others - FIFA, is not hidden from the reach of EU law. EU law preserves instruments to test the autonomy of FIFA and its impediment to the functioning of the internal market of the EU. The derived findings contradict the opinion of national legal systems refusing to interfere in the supranational governance of sport.55 EU is perceived as a much stronger actor holding more leverage ready to face influential organizations than a single nation-state.
2.3. Co-existence of sports law and EU law
While discussing the interaction of lex sportiva and EU law – internal market and competition law - it is essential not to limit the outlook on the broader picture. While the EU indeed guards its autonomy and does not let sports law undermine the power of it, there still
53 ibid paras 47-54
54 Roger Blanpain, The Future of Sports Law in the European Union: Beyond the EU Reform Treaty and the
White Paper (Kluwer 2008) 95
55 Latty Franck, ‘Transnational Sports Law’ in Klaus Vieweg (ed) Lex Sportiva (Duncker & Humboldt 2015)
is room for lex sportiva to develop on its own merits. The present chapter focuses on the discussion about the actual need for the existence and development of lex sportiva and how EU law allows it. Sports regulations, for example, as FIFA RWI that are reviewed in a later chapter of the present work, still operate in order to safeguard the sporting interest and bring about positive change. The sports regulations are primarily developed to safeguard the purely sporting interest through their own tools. That would not be possible by the nation-states themselves; therefore, the role of sporting organizations as FIFA is highly valued.
The most crucial instrument applied by the CJEU to outweigh the pros and cons of sports regulations is the proportionality test. As asserted by Perju, the instrument has become viable to balance different interests and courses of action.56 Such an approach helps to understand different incentives that otherwise are blurred by state’s law limiting the interpretative processes of, for example, - non-state actors.57 Application of the proportionality test to a rule as it is can indeed prove to be different in the judicial setting when a non-state actor’s interests suddenly need to be weighed against the constitutional order of EU law and a judge faces making a decision that might affect the autonomy of EU legal order.58 Sports organizations are regarded as competence creeps who by legitimate aims safeguard their autonomy through the proportionality test. The proportionality test opens room for bargaining and compromise, which is beneficial to both – lex sportiva supporters and antagonists. That gives a broader outlook on why sports regulations are necessary.
Nevertheless, sports regulations still are tested against EU law norms. Art. 165 TFEU while safeguarding the unique nature of the sport cannot eliminate the impact of lex sportiva on the internal market.59 It allows CJEU to acknowledge that it shall be assessed carefully but still gives it enough power to recognize infringement in EU competition law or internal market rules. If the restriction is justified, it is regarded as a win for the development of lex sportiva. Such observations stem from the case-law of CJEU. As far back as in its judgment in Walrave, the CJEU would have justified nationality discrimination as long as it would have been in place to safeguard purely sporting interest and would not concern economic activity.60 CJEU could have been expected to give a different ruling in the case of Bosman if it had found that the activity concerned is purely sporting in nature. In reality, it rarely is.
56 Vlad Perju, ‘Proportionality and Freedom—An Essay on Method in Constitutional Law’(2012) 1 Global
Constitutionalism 334
57 Robert Cover, ‘Violence and the Word’ (1986) 95(8) Yale L. J.
https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=7025&context=ylj accessed 5 July 2019
58 Perju (n 56)
59 Case C-325/08 Bernard [2010] ECR I-02177 60 Walrave (n 39)
That is explained by analysis in Meca-Medina judgment where the CJEU departed from the protection it had granted to the term - “purely sporting interest” or as introduced by Parrish and Miettinen – “the sporting exception”.61 As described by Weatherill, that constituted a change in the substance of CJEU interpretation.62 It is characterized as an overlap between EU legal norms and sports regulations as in the Meca-Medina judgment. In Meca-Medina judgment the CJEU still regarded it to be of utmost importance to analyze the rules that preserve purely sporting interest under the Treaty provisions.
A different example is observed in Deliege case where a preliminary ruling was requested from the CJEU in a matter regarding the hampering of the economic interests of a professional athlete in judo. The specific selection by the national sporting federation only upon which one could participate in an international competition was deemed to be compatible with the Treaty. More specifically, it is the way on how one ensures the high level of sporting competition.63 Contrary to the judgment in Bosman, the CJEU did recognize the regulatory autonomy of the sport governing body. That shows the clear choice made by the CJEU and indication that it does not automatically wish to limit the autonomy of the sport governing bodies and not bluntly take all the cases under the wing of the authority of the Treaties.
Deducing the CJEU did not apply the competition law in the case of Bosman. It can be regarded as something intentional in order to not set a precedent in which competition law should apply to cases concerning the sport. However, the Commission remains the actor who can issue a statement of objections and its own prohibition decisions with matters that concern competition law.64
While leaving the interpretation in what could be characterized as a limbo – by no explicitly stating the exact characteristics when the competition law is applicable to sporting cases - the Commission issued a decision in the ENIC/UEFA matters. The Commission rejected the complaint that had been filed by ENIC plc. which was an investment company holding ownership in six football clubs that participate in UEFA. The held ownership by the ENIC was contrary to the established rules by the UEFA, which explicitly stated that a company could only own parts of one club that participates in the UEFA. The specific rules are in place for the purpose of the protection of fair competition. That would not tempt owners who own
61 Richard Parrish, Samuli Miettinen, The Sporting Exception in European Union Law (T.M.C. Asser Press,
2008)
62 Stephen Weatherill, Principles and Practice in EU Sports Law (Oxford 2017) 163 63 Cases C-51/96 C-191/97 Deliege [2002] ECR I-02549
64 European Commission, ‘Procedures in anticompetitive agreements (Article 101 TFEU cases)’ (2017)
more clubs to distort the competitions by fraudulently arranging the game turnouts and scores, therefore, hampering the credibility of the game.65 As a result of this, the CJEU did
indeed recognize the autonomy of the football regulatory powers.66
The rule remains in place and is found in Art. 5 of the UEFA Regulations of Champions League setting out the credibility of the game, outlining the high standards by which the fair game shall be conducted and overseen.67 That resonates well with the words spoken by the previous EU Commissioner for Competition Mario Monti stating that while the Art 101.1. can catch the UEFA rules, exceptional circumstances exist where the integrity of the game outweighs the interests of the business parties holding shares and securities in European Football clubs.68 Clearly, the pattern of handling sporting issues in competition law is coming to life. The Commission sees the difference between purely economic interests that should be separated from purely sporting rules which encompass its unique characteristics that are ever-evolving sports policy.
The need for regulation and control in the aspects that concern business activity and competition rules were inevitable with the growing power and popularity the sports embody. The present chapter concludes that while the EU law and lex sportiva have different realms to rule, there is a significant part where an overlap occurs. That allows the EU to take it under its regulatory wing and subject it to the scope of EU law. Due to the special features of sports regulations, the EU law does not prohibit them. While some aspects fall outside the regulation of EU law – for example, the duration of the game and size of the pitch – there are areas where the EU has regulatory power. Especially in the areas where lex sportiva potentially clashes with economic activity. Nevertheless, the CJEU approach in the cases discussed above does not stem from the treaties explicitly but is developed by balancing EU law with sporting regulations.
Moreover, as stated by Weatherill Art. 165 TFEU does not limit its application to competition law rules or internal market rules; it generally covers all aspects of EU law. The undermining factor does not concern which provisions the sports regulation triggers the most but rather questions whether the regulations are necessary for ensuring a fair game in sporting
65 European Commission, ‘Commission closes investigation into UEFA rule on multiple ownership of football
clubs (27 June 2002) http://europa.eu/rapid/press-release_IP-02-942_en.htm?locale=EN accessed 8 May 2019
66 Borja Garcia, Stephen Weatherill ‘Engaging with the EU in order to minimize its impact: sport and the
negotiation of the Treaty of Lisbon’ (2011) 19(2) Journal of European Public Policy
https://www.tandfonline.com/doi/full/10.1080/13501763.2011.609710 accessed 8 May 2019
67 UEFA Regulations of the UEFA Champions League 2018-21 Cycle [2017] 68 Deliege (n 63)
competitions.69 Therefore it can be concluded that the EU lets lex sportiva preserve its unique
rules.
2.4. EU and FIFA - a symbiosis
In order to better understand the actual interaction between FIFA and EU legal order, the present chapter discusses the relationship between both giving more detailed insights.
The Commission stated its opinion in the gathering of the expert group dedicated to the principles of the good governance in sport. It said that the autonomy of sports governing bodies would diminish if they do not follow the principles of good governance.70 That subtly
states that the EU will be watching over the actions of the sport governing bodies to see if they comply with the standards that the EU upholds.
This blunt statement gives a thought to those who regard FIFA as supreme and safe from the reach of the EU regulatory powers.71 Nevertheless, the decision of the expert group aligns with the belief of FIFA not ruling in its realm. EU law, as discussed in the previous chapters, has had its impact on the regulatory power of FIFA.72
In the EU legal order, the CJEU and the Commission act as supervisors to oversee the compliance with the set norms and legal standards of the Treaties. They are able to do so by relying on the division of the competences and the initial autonomy that the MS have given up. Geeraert strongly believes this kind of set up allows the FIFA and EU relationship to be characterized by the principal-agent model since the powers delegated from the MS can be used to regulate FIFA.73 Two different options through three specific examples on how to exercise the control over FIFA are viewed in the paragraphs below. They will concern two different ways – the EU law through CJEU and the EU sports law, still being a rather new concept.
As discussed above an effective way on how the EU can exercise its control over FIFA is through the CJEU. It translates into monitoring the actions of FIFA to safeguard the Treaties. One way for the Commission to act is to directly and stringently monitor FIFA and therefore deter it from engaging in anticompetitive behaviour. Another way is to be able to receive
69 Weatherill, Principles and Practice in EU Sports Law (n 62) 164
70 Expert Group “Good Governance”, ‘Deliverable 2 Principles of good governance in sport’ (European
Commission, 2013) http://ec.europa.eu/assets/eac/sport/library/policy_documents/xg-gg-201307-dlvrbl2-sept2013.pdf accessed 8 May 2019
71 Mark Pieth, Reforming FIFA (Dike, 2014)
72 Stephen Weatherill, ‘Anti-doping revisited – the demise of the rule of “purely sporting interest”?’ (2006)
27(12) European Competition Law Review 645
73 Arnout Geeraert, Edith Drieskens, ‘The EU controls FIFA and UEFA: a principal–agent perspective’ (2015)
22(10) Journal of European Public Policy https://doi.org/10.1080/13501763.2015.1022206 accessed 10 May 2019
information from third parties through indirect monitoring, for example, through whistleblowing regarding competition law claims or other insider or public information.74
Through EU sports law where the EU has supplementary competence matters cannot be decided by the EU alone. Nevertheless, the Council, as being comprised of the heads of the MS, has its say in defining EU’s policy in matters of sport.75 In that aspect, the EU can engage in a social dialogue with FIFA. An example can be observed with RWI, which is viewed in the next chapter.76
The second example regards sanctioning. Through the CJEU and Commission, the sanctions are very obvious. They can take place through the enforcement of EU law and put an end to specific regulations by FIFA. As discussed in the previous chapters, the case law where the sport governing body regulations were modified is extensive, and the CJEU has its stake. If a matter needs to be resolved through the EU sports law, the image becomes slightly blurred. Mainly by the fact that FIFA is located in Switzerland and Switzerland is not part of the EU. The EU could also try to push FIFA at bay through harmonization of EU internal market laws. What is a rather lengthy procedure could have an important implication on the autonomy of the sport governing bodies, for example on professional employment of football players or intermediaries themselves. If the EU tried to harmonize such matters through internal market rules, the autonomy of sports governing bodies could decrease.77
Nevertheless, such a course of action would probably be subject to the opinion of CJEU itself.
The last example relates to the practice of steering. The CJEU and the Commission are regarded as principals and FIFA acts as an agent. The steering is explained as a way on how the CJEU or Commission tries to push FIFA in the right path of decision making and indirect compliance.78 As outlined by Geeraert, bargaining is often used through infringement procedures by the Commission, when trying to get FIFA to comply with the EU law regulations.79
74 ibid
75 Council of the European Union, ‘Work Plan for Sport’ (2017)
http://data.consilium.europa.eu/doc/document/ST-9639-2017-INIT/en/pdf accessed 10 July 2019
76 EU Sectoral Social Dialogue Committee for Professional Football, ‘Resolution on intermediaries/agents’
(European Commssion, 2017) ec.europa.eu/social/BlobServlet?mode=dsw&docId=11799&langId=en accesed 4 July 2019
77 Geeraert (n 73)
78 Jan Kooiman Modern Governance: New Government–Society Interactions (Sage, 1993)
79 Joint selling of the commercial rights of the UEFA Champions League (Case COMP/C.2-37.398)
While looking at it from the EU sports law perspective, the steering is still applicable hand in hand with the previously mentioned social dialogue. In terms of social aspects, FIFA and UEFA cannot be separated from the EU. That is observed with the recent signature of the cooperation arrangement between UEFA and the Commission towards solidarity, integrity, fair game and many other essential aspects.80 Such agreement shows that both organizations are ready to work in light of higher principles that go beyond the goals of the sport regulating bodies.
Such examples, as shown in the present chapter, give a broader picture of how exactly both institutions interact and what is the possible interplay between their regulations. There are ways on how the EU can influence the decision making and practices of sports governing bodies. That should be borne in mind when assessing their autonomy. By looking at the observations above and assessing the Geeraert’s presented idea, the autonomy of FIFA can be curtailed.
3. Regulations on Working with Intermediaries under EU law
By clearly indicating that the FIFA regulations can be analyzed under EU law in the previous chapters, the present chapter will dive deeper into the RWI compatibility with EU competition law. By starting with a brief explanation of the RWI development and the main changes brought about, an analysis is carried out under Art. 101.1 TFEU to examine the RWI compatibility with EU competition law and assess their possible anticompetitive effects.
3.1. The development of FIFA RWI
In 2009 the FIFA Congress81 decided upon reforming the Player’s Agent system in order to address deficiencies arisen with the licensing system in place. The main idea behind the reform was to have a more transparent system that would be easily implemented, overseen and abided. That would have lead to a more consistent national enforcement by the NFAs. Many stakeholders were involved in the process, namely NFAs and federations, clubs,
80 UEFA, ‘UEFA and European Commission extend arrangement for cooperation’ (2018)
https://www.uefa.com/insideuefa/mediaservices/mediareleases/newsid=2539259.html accessed 4 July 2019
81 FIFA Congress is an annual meeting of the football’s international governing body. The self-proclaimed
football parliament resorts to resolving various issues regarding the organization’s regulations, their implementation and application. The Congress is responsible for the election of the President of FIFA who currently is Gianni Infantino, and each of the members has one vote regardless of the size of the NFA. Such practice upholds the principle of democracy. FIFA, ‘FIFA Congress’ https://www.fifa.com/about-fifa/who-we-are/fifa-congress/ accessed 24 April 2019
professional leagues and above all, FIFPro. After the FIFA Executive Committee82 and
Congress accepted the proposed amendments, the RWI became in force on April, 2015. 83
As set out in the RWI, regardless of the term agent or intermediary, the individual concerned is a legal or a natural person. Intermediary helps clubs negotiate an employment contract with a football player or helps football player conclude a transfer agreement between two clubs. The committee working on reforming the old Player’s Agent Regulations was the Sub-Committee for Club football. It introduced the following changes:
- “The current licensing system should be abandoned;
- - A set of minimum standards/requirements must be established in FIFA’s future set of regulations;
- - A registration system for intermediaries must be set up.84”
In order to present a more clearer understanding to the reader, the analysis of the differences is carried out in the following sub-chapter as well as the improvements are addressed.
3.1.1. Main differences introduced by RWI
The RWI do not have an exempt individual list, meaning that legal entities, namely sports agencies, can now represent the football players. Many reputable agents have founded their own sports agencies and consultancies, which with the RWI have been enabled to represent players in their full name. Some examples are Jonathan Barnett and Stellar Group Limited85,
Pere Guordiola and Media Base Sports.86 Most noteworthy Jorge Mendes and Gestifute87
who represents Cristiano Ronaldo.
One of the most noteworthy differences relates explicitly to the scope of the regulations. In the 2015 RWI as mentioned in the Art. 1.2 and 1.3. set out a minimum standard by FIFA which shall be implemented by all NFAs. The PAR set out a mere framework in which the
82 FIFA Executive Committee was replaced by the FIFA Council after the amendments in 2016 where functions
of administration, organization and executive powers had to be separated. Article 34.1. of FIFA Statues sets out the main goals of the Council being the body who defines the mission, policies, values and direction of FIFA. FIFA, ‘The FIFA Council and FIFA Committees – FAQ’ (2016) https://resources.fifa.com/image/upload/faq-the-fifa-council-and-fifa-committees-2839531.pdf?cloudid=azjlxspbgcq4j1wxqaft accessed 24 April 2019
83 FIFA, ‘Working with intermediaries – reform of FIFA’s players’ agents system’ (2015)
https://www.fifa.com/mm/document/affederation/footballgovernance/02/58/08/50/backgroundpaper-workingwithintermediaries-reformoffifasplayersa..._neutral.pdf accessed 24 April 2019
84 FIFA Congress, ‘Congress endorses new approach on Players’ Agents Regulations (FIFA, 2013)
https://www.fifa.com/about-fifa/who-we-are/news/congress-endorses-new-approach-players-agents-regulations-2088917 accessed 29 April 2019
85 Stellar Group, ‘Staff’ https://stellargroup.co.uk/staff/ accessed on 29 April 2019
86 Media Base Sports, ‘Pere Guordiola’ http://mediabasesports.com/en/team/pere-guardiola-i-sala accessed 29
April 2019
NFAs shall operate and not deviate from the regulations unless the national law of the country where the NFA is located provides otherwise.88
Nowadays, the NFAs are in a position where they preserve more freedom in how to determine the rules through which an intermediary is chosen. Like governance on EU level lets MS introduce more stringent rules in different areas89, FIFA as a supranational actor allows NFAs the choice by a light touch approach. FIFA’s choice of such de-regulation might have caused more problems than what they tried to solve. Especially the different thresholds that each NFA can introduce on top of FIFA’s standards, indicating that there is no uniformity of the rules. That stands contrary to what lex sportiva has envisaged.
The RWI, however, remain silent about the jurisdiction of FIFA or the intermediaries. There is no specific indication of the courts for the disputes that would arise. The de-regulation introduced by FIFA explains this. The NFAs themselves are responsible for the rules that need to be abided. Especially in cases where they have introduced stricter rules on top of FIFA’s minimum standards.
The difference which is scrutinized in the later subchapter of the present work relates to the payment caps. PAR previously dealt with the remuneration of players in Art. 20 stating that the amount paid as remuneration shall be calculated from the player's annual basic gross income, not taking into account any extras such as apartments or cars. In the RWI the payment cap is fixed at 3% from the player’s basic gross income for the period of the whole representation or 3% of the total transfer fee paid for the player’s transfer in between the clubs. Special attention is paid to the minors for the representation of which no remuneration is earned until the player turns 18.90
3.2. Backlash of the RWI
As the regulations were introduced to safeguard the interests of the players, it might not have proven to be so. A debate evolving into backlash after the adoption of the RWI has been revolving around possible exploitation of players, especially minors. As stated by a sports lawyer and agent from Brandsmiths, David Seligman, the players might be more inclined to young and reckless man signing them for the sake of popularity rather than a middle-aged lawyer with experience.91 Opinions like these have followed the RWI where almost
88 FIFA Regulations on Players’ Agents [2009] Art. 1
89 Consumer protection, public health, social policy, environment. 90 RWI (n 1) Art7.3.;7.8.
91 BBC, ‘Football agent rule changes 'could leave young players exploited’ (2015)
everybody can become an intermediary in dealings with the representation of players and clubs as long as they sign the Intermediary Declaration.
That has urged activists such as Christian Bosco to file a petition demanding EU’s action towards the unfair FIFA regulations and additionally demanding their re-evaluation by professional lawyers and assessment of compatibility with the EU law. The European Parliament accepted the petition, and the Commission issued its response stating that there is not enough information about the actual effects of the RWI. Therefore no action at the time could be taken apart from gathering further information that would help determine the challenges better.92 It is difficult to imagine a more vague answer; however, it is valued that the Commission did not try to eliminate the risen concerns. Even though the RWI did not raise concerns during the time they were drafted, the Commission is eager to listen to the complaints. That shows acknowledgement of the possible regulatory gap, by not reverting to the previous recommendations from the EU Expert Group of Good governance.93 Therefore Commission is quick to note that the de-regulation might not have been the best possible way on how to protect the young football players and increase transparency.
The de-regulation has allowed the Football Association, which is the NFA of England to draw up more stringent rules in order to protect the minors from exploitation. In their own RWI they explicitly state that a player cannot enter in a representation contract with an intermediary before the year in which he turns 16. It correlates to a specific clause in their RWI. Stating that the representation agreement shall be no longer than two years shows that the intermediary would stop representing the player once he turns 18.94
Arguably it can be noted that no harmonization is introduced among the different NFAs across the world. When the NFAs decide to adopt more stringent rules than the minimum requirements set out in the RWI the aspects of becoming an agent might differ across the countries. While the Football Association in England is drawing up more stringent rules, the Italian parliament adopted a measure on regulating the football agents.95 That is a notable achievement taking into account the fact that Italy ranks second out of six associations96 of
92 Committee on Petitions, ‘Notice to Members, Petition No 0736/2014’ (European Parliament, 2016)
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-584.022+02+DOC+PDF+V0//EN accessed 10 May 2019
93 ibid
94 The FA, ‘Intermediaries Regulations’
http://www.thefa.com/football-rules-governance/policies/intermediaries/agent-regulations accessed 2 May 2019
95 Nick De Marco QC, ‘Italian parliament enacts new regulation of Football Agents’ (Sports Law Bulletin, 2018)
https://www.sportslawbulletin.org/italian-parliament-enacts-new-regulation-football-agents/ accessed 11 May 2019
UEFA who are responsible for 83.9% out of all commissions paid out to intermediaries in 2018.97 The national disparities, however, contradict the gradual development of lex sportiva
as uniform transnational rules in the sphere of football governance.
The registration system for intermediaries serves as a tool to enhance the transparency and protection of players in the dealings of intermediaries, but while it looks and sounds good on the paper, it might not be the case in the practice since the lawmakers are themselves not directly involved in the dealings with intermediaries. Therefore the following chapter addresses the compatibility with the EU competition law.
3.3. RWI under Art. 101.1. TFEU
This chapter carries out an analysis to see how RWI issued by FIFA can infringe the EU law, more specifically EU competition law. Art. 7.3. is analyzed in the light of Art. 101.1. TFEU to see if it constitutes price-fixing.
Art. 7.3. of the RWI sets out a remuneration cap stating that the intermediary for the whole duration of the representation agreement may not receive more than 3% of the player’s basic gross income or 3% from the transfer fee paid in the event of representing the transfer of a player.98
In order to assess infringement under Art. 101.1. TFEU three crucial questions need to be addressed. That is done step by step in the following paragraphs.
First and foremost, it needs to be established whether FIFA is engaged in economic activity. For such analysis, it is well known that FIFA has commercialized the biggest single-sport event in the world – FIFA World Cup. Previously in its decision on FIFA Package Tours Commission indeed classified FIFA as being engaged in economic activity and therefore it acts as an undertaking.99 The notion of the undertaking does not stem from the Treaties but is established through the case law of CJEU.100 By applying the functional approach, the CJEU looks at what kind of activity it is in its nature and not how it is financed or what kind of legal status the entity has. That is of the utmost importance when establishing whether the entity acts as an undertaking. It has been asserted by AG Jacobs101 and confirmed in the judgment
97 FIFA/TMS, ‘Intermediaries in International Transfers’ (2018)
https://www.fifatms.com/wp-content/uploads/dlm_uploads/2018/12/Intermediaries-2018.pdf accessed 12 May 2019
98 RWI (n 1) Art. 7.3.
99 Distribution of package tours during the 1990 World Cup (Case IV/33.384 and IV/33.378) Commission
Decision 92/521/EEC [1992] OJ L 326/31, paras 47–49
100 Case C-41/90 Hofner [1991] ECR I-01979, para 21
of Wouters.102 CJEU has subsequently held that being engaged in economic activity in itself
entails offering “goods or services on the market” therefore broadening the initial definition.103
After defining that the activity is economic in its nature, it needs to be evaluated whether FIFA can be regarded as an AOU. Moreover, if it is not engaged in the economic activity itself, but rather those are the NFAs which are engaged in economic activity. As established in Frubo, an international sports association can be regarded as AOU by its members who when they are engaged in economic activity can produce anticompetitive effects.104
An interesting aspect can be observed in the decision by the Commission regarding the UEFA Champions League commercial rights and their selling. It stated that the national football clubs are engaged in economic activity and the NFAs are comprised of those football clubs. That indicated that indeed the NFAs are AOU as long as they engage in economic activity.105 Consequently, UEFA is comprised of the NFAs making the UEFA an association of the AOU.106 As long as UEFA engages in the economic activity itself, it also is regarded as an AOU for the application of EU competition law. 107 In this case, judgment in Piau helps by indicating that FIFA should be categorized as AOU.108 It correlates with the Commissions decisions in UEFA because in Piau case the Court indeed declared that FIFA is comprised of AOU’s109.
Next step is to analyze whether Art. 7.3. can be regarded as a decision. Not only a decision can be interpreted as binding regulations governing the actions of an association110, it can
also be an agreement111 and non-binding recommendations112. The anticompetitive effects might be displayed through the influence of the recommendation on its addressees, which actions on the market would be caught by the Art. 101.1. TFEU.113 In the case of FIFA, we revert to the judgment in Piau. In Piau the CJEU ruled that the regulations of FIFA are binding on the NFAs and moreover coordinate their actions with regards to players’ agents.
102 Case C-309/99 Wouters [2002] ECR I-01577, paras 50–70
103 Case C-118/85 Commission v Italy [1987] ECR 1987 02599, para 7; Case C-35/96 Commission v Italy [1998]
ECR I-03851, para 36; Case C-180/98 Pavlov [2000] ECR I-06451, para 75
104 Case C-71/74 Frubo [1975] ECR 1975 00563, para 30 105 Distribution of package tours (n 99) paras 52-57 106 Joint selling of the commercial rights (n 79) para 106 107 ibid
108 Case T-193/02 Piau [2005] ECR II-00209, paras 68 – 72 109 ibid para 72
110 Visa International — Multilateral Interchange Fee (Case COMP/29.373)Commission Decision 2002/914/EC
[2002] OJ L 318/17, para 55
111 ibid
112 Cases C-96-102, 104, 105, 108 and 110/82 NV IAZ [1983] ECR 1983 -03369, para 20 113 ibid
