On appeal, the Court of Justice
The CFI ruling was the subject of an appeal to the Court of Justice.38 The Court’s j udgment was largely directed at exposing the intellectual inadequacy of the attempt to establish a separation between sporting rules (which escape the scope of application of EU law) and rules of an economic nature (which do not). In this respect it was successful. This, however, was ultimately of no practical value to the applicant swimmers: Meca-Medina and Majcen joined Bosman and Walrave and Koch before them in doing far more service to EU law than EU law ever did for them.39 The Court of Justice in Meca-Medina was on familiar ground when it began by asserting that sport is subject to EU law ‘in so far as it constitutes an economic activity’.40 It added that the Treaty prohibitions against restrictions on free movement ‘do not affect rules concerning questions which are of purely sporting interest and, as such, have nothing to do with economic activity’, citing Walrave and Koch, its very first ruling applying EU law to sport.41 It then referred to ‘the difficulty of severing the economic aspects from the sporting aspects of a sport’, a deft phrase
- 35 Meca-Medina (n 31) para 41. 36 ibid para 44. 37 ibid para 57.
- 38 Meca-Medina (n 28). 39 Ch 11.8 will tell a similar story about Karen Murphy.
- 40 Meca-Medina (n 28) para 22. 41 ibid para 25.
deriving from Bosman,42 confirming its view that the free movement provisions in the Treaty ‘do not preclude rules or practices justified on non-economic grounds which relate to the particular nature and context of certain sporting events’. It then added, in line with its conventional practice, that such a restriction on the scope of the provisions in question must remain limited to its proper objective.
Up to this point this is largely familiar reasoning, although it is of note that the Court draws freely on its free movement case law to inform its treatment of a competition law case. This points to the functional connections between the two as instruments of internal market law.43 The Court’s retention of the notion of matters that are ‘purely sporting’ in nature, though understandable given its pedigree in the Court’s case law and its use by the CFI in Meca-Medina, is nevertheless apt to mislead. The effect of a practice is what drives EU internal market law and, as explained, rules that are ‘purely sporting’ in effect are extremely rare. However, in Meca-Medina the Court moved beyond the limiting formula of the rule that is purely sporting in nature. It was far more thorough in its examination. It added that even where one finds such a rule, this ‘does not have the effect of removing from the scope of the Treaty the person engaging in the activity governed by that rule or the body which has laid it down’.44 It is, the Court explained, necessary to examine the applicable conditions set by the Treaty, in particular those concerning free movement and competition. The CFI had made an error of law in holding that rules could be excluded from the scope of the Treaty provisions on competition on the sole ground that they were regarded as purely sporting with regard to the application of the free movement provisions. A more detailed appraisal of the demands of what were then Articles 81 and 82 of the Treaty Establishing the European Community (EC), now Articles 101 and 102 TFEU, was required.45
The contested CFI judgment which dismissed the swimmers’ application was therefore set aside. This, however, was the limit of the athletes’ joy. The Court, after reviewing the matter, concluded that, despite the error of law made by the CFI, nonetheless it was appropriate to dismiss the application for annulment of the Commission decision rejecting their complaint. There was, in the Court’s view, no substance to the criticism made of the Commission. The CFI had taken the wrong route in its legal analysis, but it had reached the right conclusion.
Meca-Medina and Majcen were therefore not able to use EU law to disturb their two-year suspension from swimming. But what is of enduring importance to the evolution of EU sports law is the Court’s view in its ruling of how the analysis should have been conducted. The Court stated that the compatibility of rules with EU competition law cannot be assessed in the abstract. This is because not every agreement between undertakings which restricts the freedom of action of one or more of the parties necessarily falls within the prohibition laid down in (what is now) Article 101(1) TFEU. In applying Article 101(1), ‘account must first of all be
- 42 ibid para 26. Deliege too is cited in para 26. 43 On this convergence, see further Ch 7.3.
- 44 Meca-Medina (n 28) para 27. 45 ibid para 33.
taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives’; and it ‘has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives ... and are proportionate to them’.46 In support of these propositions the Court cited paragraph 97 of its ruling in Wouters. 47 As explained previously, Wouters was the Commission’s interpretative rock in its decision in favour of UEFA’s ban on multiple club ownership in ENIQM the Court’s reliance in Wouters on interpreting (what is today) Article 101 TFEU in Meca-Medina is of much higher and more authoritative significance.
Relying on the model shaped in Wouters, the Court envisages that a practice may generate effects that are restrictive of competition, yet may be saved from condemnation pursuant to Article 101(1) TFEU in the light of the objectives pursued. This inquiry shall also involve assessment of the necessity to tolerate the restrictive effects in pursuit of those objectives. This is to open up the legal assessment of sporting practices that have the effect of restricting competition also to include appraisal of their sporting objective. And the use of the word ‘inherent’ in the Court’s formula49 echoes the ruling in Deliege, which similarly insisted on the application of free movement law in a manner that is sensitive to context and, in particular, does not cut across sporting practices that are inherent in the sport’s organization.
This then brought the Court to an examination of the anti-doping rules at stake in Meca-Medina. It decided that even if they were treated as a decision of an association of undertakings which limited the swimmers’ freedom of action, they did not necessarily constitute a forbidden restriction of competition within the meaning of (what is now) Article 101 TFEU, since they were ‘justified by a legitimate objective’.5° This is consistent with the ruling in Wouters on which the Court placed explicit reliance. It is also comfortably in line with the Court’s view in Bosman that the transfer system pursued ‘legitimate’ objectives, albeit in that case it was examined in the context of free movement law. It was every bit as true in Meca-Medina as it was in Bosman that the Court’s view of what was ‘legitimate’ was not based and could not be based on the explicit terms of the Treaty, which at the time was barren of any mention of sport. Instead the Court had to think creatively and devise its own view. It stated that the Commission could rightly take the view that the general objective of the rules was to combat doping in order for competitive sport to be conducted fairly; and that it included the need to safeguard equal chances for athletes’ health, the integrity and objectivity of competitive sport, and ethical values in sport.51 Moreover, the effect of penalties for breach restricted the athletes’ freedom of action but was ‘inherent’ in the rules, given that penalties were necessary to ensure enforcement of the ban on doping.52
The limitation placed on the swimmers’ freedom of action was found to be ‘inherent in the organisation and proper conduct of competitive sport and its very
- 4« ibid para 42. 47 Wouters (n 12). 48 ENIC/UEFA (n 7).
- 49 Meca-Medina (n 28) para 42. 5° ibid para 45. 51 ibid para 43.
- 52 ibid para 44.
purpose is to ensure healthy rivalry between athletes’.53 One might today choose to frame this analysis with reference to Article 165 TFEU, and treat the imposition of sanctions in a way that curtailed the swimmers’ freedom of action as a reflection of ‘the specific nature of sport’. But this would be to do more than repackage the willingness of the Court to interpret EU competition law in a manner sensitive to the particular context of sport well in advance of the arrival of Article 165 in the Treaty with effect from 2009.
That the restriction must be ‘inherent’ in organizational rules which are in turn justified by a legitimate objective ensures that the Court is able to apply Article 101 to forbid rules that are found to be excessive. Restrictions must be limited to what is necessary to ensure the proper conduct of competitive sport. This is the competition law version of the Court’s careful refusal in Bosman to accept in the context of free movement law that nationality discrimination, inherent in international sport, could lawfully be extended to player selection policies in club football. In Meca- Medina the Court suggested the line might be crossed where the conditions laid down for defining the circumstances which amount to doping in respect of which penalties may be imposed lack any scientific credibility and are too readily met, or where penalties imposed are disproportionately severe. This would go beyond what is needed to ensure that sporting events take place and function properly and would therefore generate unlawful adverse effects on competition.54 So this is the route for athletes and other interested parties to use EU competition law in future to attack sporting practices. Meca-Medina is not a concession of an absolute autonomy to sport. It grants a conditional autonomy under EU law. The judgment displays a proper wariness of questioning the expertise practised by sports federations, in casu in doping control, but the Court refuses to place such practices beyond the scope of review as a matter of principle. So, in similar vein, in Motosykletistiki Omospondia Ellados NPID (MOTOE) v Elliniko Dimosio the Court did not call into question the conferral on a sports governing body of an exclusive right to decide whether or not to sanction the staging of new events on its territory, but it did envisage that a violation of Article 102 TFEU could arise where such a governing body itself also organized and commercially exploited events.55 Article 102 comes into play only where an undertaking holds a position of economic dominance, but this threshold requirement, the crossing of which normally entails careful examination of the structure of the market in order to decide whether the required level of economic power unrestrained by competitive pressure is present^6 is typically satisfied with ease in application to a sports governing body, precisely because such bodies typically claim an existential sporting need to establish globally common applicable rules. So the question in MOTOE was whether there was an abuse of dominant    
power. The Court found there was. There would be, in short, a conflict of interest: the governing body would be in a position to use its regulatory power to further its own economic interests by favouring its own events over those of rival operators, a ‘situation of unequal conditions of competition’^7 But in Meca-Medina the Court found no such flaws.58 EU law concedes conditional autonomy to sporting practices and, in the absence of any compelling evidence that the doping procedures were flawed or the sanctions disproportionate, the conditions set by EU law were met. FINA could ban the swimmers without infringing EU law.
-  ibid para 45. 54 ibid para 47.
-  55 Case C-49/07  ECR I-4863. On governance, see further Ch 10.
-  56 eg Case 27/76 United Brands and United Brands Continental v Commission  ECR
-  207; Case 85/76 Hoffmann-La Roche v Commission  ECR 461; Case 322/81 NederlandscheBanden-Industrie-Michelin v Commission  ECR 3461, all cited at para 37 of MOTOE. See alsoCommission Notice on the definition of relevant market  OJ C372/5.