Earlier this week, the Court of Justice of the European Union (CJEU), Europe’s highest court, delivered a much-anticipated ruling.
This was in relation to a request for a preliminary ruling that was submitted to it by the Commercial Court in Madrid concerning a dispute that the Commercial Court is currently hearing that was lodged by the company A22 against FIFA and UEFA on the ongoing saga surrounding the proposed European Super League.
The main reason for the preliminary ruling was inter alia to determine whether FIFA and UEFA hold a monopoly when it comes to the football sector.
In what can be considered a landmark ruling, the CJEU held that both FIFA and UEFA abused their dominant position by prohibiting clubs and players from competing in the proposed European Super League as well as with respect to their applicable rules making any new interclub football project subject to their prior approval.
As a result of such abuse, A22 were effectively blocked from proceeding any further with their plans, since without any participating teams or players, a ball would have never been kicked in the proposed Super League.
The issue kickstarted back in 2021, when the European Super League proposed a breakaway competition involving some of Europe’s biggest teams in a restricted format.
Upon seeing many clubs interested in this breakaway competition, FIFA and UEFA went out all guns blazing and issued severe threats against any club or player who opted to participate in such league, leaving many teams who initially put their name forward to join the Super League making a sudden U-turn on their intentions.
Similar to the ruling delivered in the International Skating Union case, the CJEU ruled that where an undertaking, who is in a dominant position, has the power to determine the conditions in which
potentially competing undertakings may access the market, it is of vital importance that this power must be subject to criteria which are suitable for ensuring that they are transparent, objective, non-discriminatory and proportionate.
Abuse of position
In relation to the powers of FIFA and UEFA, the CJEU ruled that their respective powers are not subject to any such criteria and as a result were found to be an abuse of their dominant positions.
The ruling now obliges FIFA and UEFA to amend their arbitral rules and to ensure that both organisations are open to competition from other third parties who wish to organise similar events.
Whilst both FIFA and UEFA will attempt to downplay the significance of this ruling, from a legal perspective the ruling is a further confirmation by Europe’s highest court that sport today is seen as having an economic activity, especially when it comes to the organisation of sport competitions and the exploitation of media rights.
This means that all sport organisations that partake in such types of activities are subject to European legislation and as a result, they must comply with the applicable treaty provisions concerning competition law and must ensure that they respect the freedom of movement.
It is interesting to note that the CJEU did not say that a project such as that of the Super League must necessarily be approved, leaving the window open on whether the Super League can continue proceeding further ahead on its own, without first requiring the approval of UEFA and FIFA.
Although this ruling has dealt with the procedures that were adapted by FIFA and UEFA respectively, the ruling has also sent out a strong message to other sport organisations whose rules and regulations might be anti-competitive in nature.
All sport organisations should ideally revise their rules and regulations to ensure that they reflect today’s modern times and do not fall foul of European legislation.
Whilst the contents of the preliminary ruling are significant in nature, it must be pointed out that just like all preliminary rulings, the ruling of the CJEU is not a decision on the dispute itself.
Focus shall now shift back to the Commercial Court in Madrid which will deliver its final ruling on the dispute that it is hearing, taking into consideration of course the contents of the preliminary ruling when delivering its judgement.
Wishing all readers a Merry Christmas and a prosperous New Year 2024.
Dr. Robert Dingli is a sports lawyer and Senior Associate at Dingli & Dingli Law Firm
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