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No Absolute Autonomy for Sport under EU Law ...

The claims to absolute or unconditional autonomy advanced by the football authorities and methodically rejected by the Court in Bosman numbered eight.

Each is structurally important in understanding how broad is the reach of EU internal market law and how, accordingly, core issues tend to be settled in the substantive appraisal of their merit as a claim to protect the special features of sport, rather than by excluding EU law in principle. This is the heart of the model of ‘conditional autonomy’ granted to sport under EU law. [1]

government pressed in similar vein that in most cases football is not an economic activity.[2] [3] [4] The Court did not disagree. And it repeated its finding in Walrave and Koch that sport is subject to EU law only in so far as it constitutes an economic activity within the meaning of the Treaty. But it found that this readily applies to the activities of professional or semi-professional footballers, where they are in gainful employment or where they provide a remunerated service. It does not matter whether the employer counts as an ‘undertaking’. What matters is the existence of, or the intention to create, an employment relationship.44 The application of EU law could not be excluded in principle.

The message here is that it is easy to find at least some economic context to sporting activity and, since that economic context is the constitutional trigger to the application of EU law, it is correspondingly easy to bring sport within the reach of EU law. This broad and deep reach is a well-established feature of EU internal market law generally.

  • 2. It was argued by the Belgian football association that the matter ‘does not concern the employment relationships between players and clubs but the business relationships between clubs and the consequences of freedom to affiliate to a sporting federation’, and that as a result (what was then) Article 48 did not apply.45 This plea is quoted here in its original form, because it is scarcely comprehensible and therefore it is incapable of helpful paraphrase. The Court politely pointed out that even if the transfer rules govern the business relationships between clubs rather than the employment relationships between clubs and players, their existence, and in particular the obligation imposed on a buying club to pay a fee, affected the players’ opportunities to find employment as well as the terms under which such employment is offered.46 The application of EU law could not be excluded in principle.
  • 3. UEFA alerted the Court to the extreme difficulty of distinguishing between the ‘economic and the sporting aspects of football’ and advised that a decision of the Court concerning the situation of professional players ‘might call in question the organization of football as a wholeA7 Once again the Court saw no reason to disagree as a matter of principle. Citing Dona,4& it repeated the observation that EU law does not forbid ‘rules or practices justified on non-economic grounds which relate to the particular nature and context of certain matches’. As exposed earlier, this is analytically unhelpful. It continued by adding that any such restriction on the scope of the provisions must remain limited to its proper objective. There is no basis for immunizing the whole of a sporting activity from the scope of the Treaty^9 And the Court, while accepting that ‘the practical consequences of any judicial decision must be weighed carefully’, would not permit possible consequences for the organization of football as a whole ‘to diminish the objective character of the law and compromise its application’. Such anxieties could at most find expression in a limitation to the temporal effect of a judgment, which the Court is exceptionally prepared to sanction.50 And, in fact, in Bosman the

Court agreed that Article 48 EEC (now Article 45 TFEU) could not be used to attack a transfer fee which had already been paid or was due, except by those who had already lodged a claim. So, in line with its general, though infrequently exercised, power to grant its rulings only prospective effect in circumstances where they may cause serious difficulties to parties that have acted in good faithA1 it did permit a degree of protection to the established status quo in football. The transfer system would necessarily change—but with effects for the future. By contrast, however, it saw no basis for a temporal limitation of the effects of the judgment ruling against nationality discrimination in club football. 52

This type of reasoning would be perfectly orthodox in any legal order. Granting a specific and focused temporal limitation to the effects of a ruling that was not entirely foreseeable is one thing, but no court can be expected to adopt a general policy of setting aside the application of legal rules simply because of the disruptive effect on those subject to them. A different question, however, is determining precisely what those legal rules, properly interpreted, entail in the first place. This matter of substance is considered more closely in sections 4.7 and 4.8.

4. The German government submitted that sport has points of similarity with culture. This led it to draw the Court’s attention to the direction in what was then Article 128(1) EC, now Article 167(1) TFEU, that the EU must respect the national and regional diversity of the cultures of the Member States, and it argued that by analogy the same respect should be paid to sport.53 In response the Court did not seek to refute the alleged similarity between sport and culture. Indeed it is perfectly convincing that there is a degree of similarity: sport has its cultural dimension, even if that analogy might sometimes be exaggerated by those eager to praise sport’s virtue. However, the Court observed that in the case it was not being asked to deal with the exercise of a limited competence to act conferred on the EU. Rather the matter at hand addressed the scope of one of the fundamental freedoms guaranteed by EU lawA4 Whatever respect for ‘culture’ is mandated by EU law cannot involve a disapplication in principle of internal market law. A cultural context is no reason to afford absolute autonomy to those engaged in and pursuing an activity with economic motivation.

This is fully in line with orthodox EU law. The creation of the internal market defined by Article 26 TFEU demands a sweeping scope to the application of the free movement and competition rules, reaching into every area of economic activity as a basis for review of public and private practices that imperil integration and, crucially, even in sectors where EU legislative competence is lacking in part or in full. This structural dimension of EU law was explained in the abstract in Chapter 3: here now is its direct and practical significance in defeating appeals for sporting autonomy from free movement law pressed on the Court in Bosman. Sport is slightly different from most cases involving free movement law in that it is [5] [6] [7]

in the main private actors that are concerned rather than public authorities.55 But otherwise the basic model found in Bosman follows faithfully that used in other cases where free movement law is used to review national practices even in the absence of comprehensive EU legislative competence to dictate how the matter shall be regulated.56 The point is that in such circumstances it is not for the EU to dictate how football should shape its transfer system. It is for the EU—specifically its Court—to rule on how football shall not shape its transfer system. It shall not violate EU internal market trade law.

The Court has tried to give principled expression to the limits of its role, and of EU law generally, in cases of this constitutionally sensitive type. In a case in which a patient wished to rely on free movement law to claim a right to receive medical treatment in another Member State and have it funded by her home Member State—an area where the key legislative competences plainly belong at state, not at EU, level—the Court stated that the achievement of the fundamental freedoms guaranteed by the Treaty inevitably required Member States to make adjustments to the structure and resourcing of social security systems, but it added that EU law ‘does not detract from the power of the Member States to organise’ such systems and that it does not ‘undermine ... their sovereign powers in the field’.57 Free movement law stops states acting, in the absence of justification for chosen practices that impede cross-border trade, but the EU does not create any legislative framework in the field. Sport follows precisely this model, albeit that it is typically private practices, rather than those of public authorities, which are put to the test. So the formula used by the Court in its cases on cross-border health aligns perfectly with the approach taken in Bosman: the achievement of the fundamental freedoms guaranteed by the Treaty inevitably requires adjustment to the structure of sports organization, while still leaving ultimate power to administer sport to the responsible governing bodies. It is the model of conditional autonomy under EU law. That inquiry requires the Court to proceed to make assessment of the virtues claimed for the transfer system as a method of organization and, by definition, that must occur in these cases where the reach of free movement law exceeds that of the EU’s legislative competence without any useful policy framework mapped on to the affected sector by the Treaty itself.

There is perhaps something disingenuous about the Court’s approach: the power of organization (of health care, of sport) is not assumed by the EU, but EU law does confine the scope of those organizational choices. State ‘sovereign powers’ to which the Court refers are modified in their practical exercise. The point of general structural significance is that this investigation takes place within the fabric of EU law: there is no immunity from free movement law simply because practices are sporting (or cultural) in intent or effect, provided they carry economic implications. [8] [9] [10]

  • 5. The German government referred to the freedom of association and autonomy enjoyed by sporting federations under national law.58 The Court expressly confirmed that the principle of freedom of association is one of the fundamental rights which is protected in the legal order of the EU. Today it would doubtless rely on Article 11 of the Charter of Fundamental Rights. However, it found no basis to permit freedom of association to yield sporting autonomy from EU law. The rules on which the Court had been asked to supply a preliminary ruling were not necessary to ensure enjoyment of the freedom of expression by national associations, clubs, or players, nor could they be seen as an inevitable result thereof.59 The application of EU law could not be excluded in principle.
  • 6. The German government, citing the principle of subsidiarity, pressed for acceptance of a general principle that intervention by public authorities, including those of the EU, must be confined to what is strictly necessary.[11] [12] [13] Here too the Court did not disagree, but found the claim inapt to achieve autonomy. The principle of subsidiarity cannot lead to a situation in which the freedom of private associations to adopt sporting rules restricts the exercise of rights conferred on individuals by the Treaty.6[14] This is fully in line with the observations made earlier about the Court’s orthodox interpretation of the structure of internal market law. It is dismissive of submissions that are designed to place restrictive practices with economic effects in a zone which excludes them in principle from scrutiny under EU law. The real test is whether or not they are justified.
  • 7. Did Article 48 EEC, today Article 45 TFEU, apply to private parties such as the governing bodies of a sport?62 The Court concluded that it did. The Court cited its ruling in Walrave and Koch, and embraced the reasoning it had provided twenty years earlier.63 By applying Article 48 not only to the action of public authorities but also to ‘rules of any other nature aimed at regulating gainful employment in a collective manner’, EU law addresses obstacles to freedom of movement which would escape its grip were it concerned exclusively with state barriers and, moreover, it avoids the risk of creating inequality in application in consequence on the different patterns of private and public actors across the several Member States. UEFA’s objection that such an interpretation unfairly burdens private parties who, unlike Member States, may not rely on limitations justified on grounds of public policy, public security, or public health was swiftly dismissed on the basis that individuals may rely on such justifications.64

This has become orthodoxy in internal market law. Adherence to this line of reasoning has admittedly taken the Court into some controversial terrain. Most of all, the logic deployed in Walrave and Koch and Bosman to subject sporting bodies to obligations rooted in EU free movement law was used subsequently in Viking Line to subject trade unions to obligations imposed by the Treaty rules on free movement.65

So collective labour action taken to deter a company from ‘reflagging’ a vessel in a Member State with lower regulatory costs was treated as an obstacle to the free movement of companies and therefore required justification. The cramped approach to the scope of justification adopted by the Court in Viking Line has earned it severe criticism.[15] [16] [17] [18] Structurally, however, the judgment conforms to Walrave and Koch and to Bosman: it confirms that the scope of free movement law is interpreted broadly with the consequence that a heavy load is carried by the often sensitive inquiry into whether practices should be treated as justified. Trade unions, like sporting bodies before them, have discovered ruefully that it is extremely difficult to persuade that Court that they should be granted an absolute autonomy from the controls exercised by EU internal market law. Conditional autonomy—autonomy that is conditional on showing practices to be justified—is the next best prize on offer. It is the heart of the adjudicative or interpretative route to securing sporting autonomy.

8. UEFA argued that the dispute concerned a situation purely internal to a single Member State, Belgium. It concerned a Belgian player detrimentally affected by the conduct of a Belgian club and a Belgian association.67 It is indeed clear that EU free movement law bites only where there is a cross-border element to the dispute. The ‘purely internal’ situation escapes its reach. But, perfectly obviously, Bosmans case was not ‘purely internal’. His prospective new employer was French^8

However, there was, in truth, a bit more to this argument than meets the eye.

The situation was not purely internal to a single Member State. The basic problem was that Bosman was faced with a restriction to his movement across a border, since he wished to move from a Belgian employer to a French employer. However, in fact he would have been faced by the same problem even had he been seeking to move to another Belgian employer. That is to say, the obstacles created as a result of the transfer system applicable in football affected all workers in exactly the same way whether they wished to enter into a contract of employment with a new employer in the same Member State as their previous employer or whether it so happened that their preferred new employer was based in another Member State. So it was pure chance that an association with cross-border mobility was at stake. In reality the problem was the transfer system generally, which affected all workers equally in law and in fact whether or not they happened to wish to cross a border to join a new club.

Two years earlier, in its notorious ruling in Keck andMithouard,69 the Court had placed (rather imprecise) limits on the application of the rules governing the free movement of goods in circumstances where challenged rules met the requirement of legal and factual equality of application. In Bosman it seemed open to the Court to adopt a comparable solution in the field of the free movement of persons. On such an understanding, the matter should not fall within the scope of application of free movement law at all (and should be tackled, if at all, by competition law). But the Court did not take this approach in Bosman. It found the matter to fall within the scope of free movement law. This was a practice which impeded the freedom of movement of a national of one Member State wishing to take up employment in another.[19] [20] [21] This, the Court stated, was not contradicted by the fact that the transfer rules applied also to transfers between clubs belonging to the same national association/1 And it concluded that the rules were not comparable to the rules at stake in Keck and Mithouard.72 That was enough, in the Court’s view, to bring (what is now) Article 45 TFEU into play.

The judgment on this point is less comfortably orthodox than the reasoning provided by the Court on the other points considered earlier. In particular, it seems to assert in this vein a wider scope for the rules on the free movement of persons than those that apply to goods—but it fails to articulate just why this should be so. The Court’s approach makes it difficult to piece together a coherent understanding of the scope of free movement law which bridges all the freedoms. That, however, is a puzzle for general internal market lawyers/3 It is not of any particular specific relevance to sports law as such and it needs no further articulation here. For sports lawyers the ruling asserts the relevance of free movement law to control sporting practices that impede the free movement of workers even where that impediment is felt also within the territory of a single Member State. And in Bosman it meant that the legal analysis turned to whether the rules of which the player had fallen foul could be justified.

  • [1] It was argued by the Belgian football association that only the major Europeanfootball clubs may be regarded as undertakings, whereas by contrast the economicactivity pursued by smaller clubs such as RC Liege is ‘negligible’.^ The German
  • [2] ibid para 72 . 44 ibid paras 73—74. 45 ibid para 70.
  • [3] 46 ibid para 75 . 47 ibid para 71. 48 Dona (n 19).
  • [4] 49 Bosman (n 23) para 76. 50 ibid paras 76—77.
  • [5] eg Case 24/86 Blaizot and others [1988] ECR 379; Case C-402/03 Skov and Bilka [2006] ECR
  • [6] I-199; Case C-76/14 Manea, judgment of 14 April 2014.
  • [7] 52 Bosman (n 23) paras 139-46. 53 ibid para 73.
  • [8] There is jurisdictional variation in the extent to which sports organization is influenced by
  • [9] the State: see R Siekmann and J Soek, ‘Models of Sport Governance within the European Union’ inJ Nafziger and S Ross (eds), Handbook on International Sports Law (Edward Elgar 2011) ch 5.
  • [10] 56 See Ch 3.3. 57 Case C-372/04 Ex parte Watts [2006] ECR I-4325, para 121.
  • [11] Bosman (n 23) para 73. 59 ibid para 80. 60 ibid para 73.
  • [12] 61 ibid para 81. 5 ibid para 82. 63 ibid paras 82—84.
  • [13] 64 ibid paras 85—86.
  • [14] 65 Case C-438/05 Viking Line [2007] ECR I-10779, para 55; Case C-341/05 Laval [2007] ECR
  • [15] cf eg L Azoulai, ‘The Court of Justice and the Social Market Economy: The Emergence of anIdeal and the Conditions for its Realisation’ (2008) 45 CML Rev 1335; C Barnard, ‘Fifty Years ofAvoiding Social Dumping? The EU’s Economic and Not So Economic Constitution’ in M Douganand S Currie (eds), Fifty Years of the European Treaties: Looking Back and Thinking Forward (Hart 2009);ACL Davies, ‘One Step Forward, Two Steps back? The Viking and Laval cases in the ECJ’ (2008) 37Industrial Law Journal 126; C Joerges and F Rodl, ‘Informal Politics, Formalised Law and the “SocialDeficit” of European Integration: Reflections after the Judgments of the ECJ in Viking and Laval’ (2009) 15 ELJ 1.
  • [16] Bosman (n 23) para 88. 68 ibid paras 89—90.
  • [17] 69 Joined Cases C-267/91 and C-268/91 Keck andMithouard [1993] ECR I-6097, cited at Bosman
  • [18] (n 23) para 102.
  • [19] Bosman (n 23) paras 96—97. 71 ibid paras 98, 103. 72 ibid para 103.
  • [20] 73 See eg S Prechal and S De Vries, ‘Seamless Web of Judicial Protection in the Internal Market’
  • [21] (2009) 34 EL Rev 5; Weatherill (n 13) ch 8.
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