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ISU skates into hot water

In the week commencing the twenty fifth anniversary of the historic Bosman ruling, the General Court of the European Union situated in Kirchberg, Luxembourg delivered what is being billed as another historic decision within the sports industry, albeit this time concerning ice skating and EU competition law.

The International Skating Union (ISU), who was the applicant in this case, is the sole international sports federation that is recognised by the International Olympic Committee as being responsible worldwide for regulating and administering figure and speed skating on ice.

As a world sports body, it has the power, in particular, to determine the rules of affiliation which its members and individual skaters are required to observe, with such rules being set out in its statutes and other regulations.

In particular, Rules 102 and 103 of the ISU’s general rules (‘the eligibility rules’) determine the conditions in which skaters may participate in speed and figure skating activities and events that fall within the ISU’s competence.

Since 1998, such eligibility rules have provided for a ‘comprehensive pre-authorisation system’, according to which skaters may participate only in events sanctioned by the ISU and/or by its members (such as national federations) which are organised by representatives approved by the ISU and under its rules.

On June 23, 2014, the European Commission received a complaint lodged by two Dutch professional speed skaters, alleging that the eligibility rules were incompatible with Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

The complaints inter alia maintained that those rules prevented them from taking part in a speed skating event that the Korean company Icederby International Co. Ltd planned to organise in Dubai.

Since this event was not authorised by the ISU, the organiser found it difficult to secure the participation of professional speed skaters, leading it to eventually abandon the event entirely.

If a skater had participated in that, or any other, unauthorised competition, such skater could have potentially been exposed to a lifetime ban from any

competition organised by the ISU, a hefty price for any sportsman to pay.

Whilst the ISU initially attempted to bring their eligibility rules in line with the TFEU provisions, the Commission was not satisfied with the modifications that were proposed by the ISU and proceeded to rule that such rules were incompatible with EU competition rules since they

restricted professional speed skaters from participating freely in international events organised by third parties.

At the same time, it also deprived those third parties of the services of athletes necessary to organise such competitions.

The ISU contested the Commission’s decision before the General Court of the EU which was being called upon to rule for the first time on a Commission decision finding that rules adopted by a sports federation do not comply with EU competition law.

The General Court ruled that the ISU is required to ensure, when examining applications for authorisation, that third-party organisers of speed skating competitions are not unduly deprived of access to the relevant market, to the extent that competition on that market is distorted.

Upon examining the ISU’s eligibility rules, the General Court ruled that such regulations cannot be regarded as clearly defined, transparent,  non-discriminatory and reviewable authorisation criteria, which, as such, would be capable of ensuring the organisers of competitions effective access to the relevant market.

The General Court found that the Commission was right to conclude that the eligibility rules have as their object the restriction of competition within the meaning of Article 101 TFEU.

Although the General Court recognised the justification for sports federations having the need to subject their members for pre-authorisations, at the same time the criteria for such pre-authorisations had to be clearly defined, transparent and non-discriminatory in order to be justified, something which in the case of the ISU was not applicable in the views of both the Commission and the General Court.

The decision is still subject to an appeal, limited to points of law only, before the Court of Justice against the decision of the General Court within two months and ten days of notification of the decision.

However, such ruling is still seen as being a landmark one within competition law for the sports industry and will surely set off other international sports federations on a scrutinising mission to ensure that their rules and regulation are robust and do not fall foul of the TFEU provisions which could potentially put them on a collision course with the Commission.

Wishing all readers a Merry Christmas and a prosperous New Year 2021.

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