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The Convergence of Free Movement and Competition Law in Application to Sport: the Integrated Law of the Internal Market

Walrave and Koch and Bosman are usefully read in the light of Meca-Medina, in order to correct the analytical mis-steps there taken. And this is to proceed on the basis that the shape of EU sports law developed in the interpretation of provisions of the Treaty dealing with competition law in Meca-Medina should be exported also to inform the interpretation of free movement law.

True, the Court makes no such explicit insistence on convergence between competition law and free movement law in Meca-Medina. And in fact the Court rebuked the CFI for failing to separate out the different detailed elements at stake in an analysis under free movement law, on the one hand, and competition law, on the other. This, however, is not a rejection of broad convergence in purpose between the relevant Treaty provisions. Instead, the Court is best understood as simply drawing attention to the CFI’s neglect of possible detailed differences between the provisions, such as personal scope, the need for and nature of market analysis, the role of ‘internal situations’, and the burden of proof.22 The Commission’s 2007 White Paper on Sport is cautious, indeed equivocal, on the point of convergence. The Staff Working Document seems in places readily to assume that Meca-Medina is equally relevant to free movement as to competition law/3 yet in others it takes pains to accept that there is no convergence brought about by Meca-Medina.24

However, the most significant aspect of Meca-Medina is its distaste for the notion of the ‘purely sporting’ rule and preference instead for case-by-case examination of sporting practices, and it is this insight which deserves to be applied also to free movement law. In Walrave and Koch the Court treated the composition of national sports teams as unaffected by the prohibition against nationality-based discrimination now found in Article 18 TFEU, where their formation is ‘a question of purely sporting interest and as such has nothing to do with economic activity’.25 That unfortunate formula was recycled in Bosman in connection with (what is now) Article 45 TFEU on the free movement of workers^6 Perhaps there are some such rules which are beyond the reach of the Treaty—the detail of the offside rule perhaps, the height of the goalposts, or the length of a match—but most rules of sporting interest are not purely of sporting interest, they also impinge on economic activity. In practice, the Court’s consistent insistence that any restriction on the scope of the Treaty provisions in question must remain limited to its proper objective has helped to contain inflated claims to sporting autonomy via this unhappy ‘purely sporting

  • 22 So the Court of Justice, in Meca-Medina (n 4) paras 32—33 of the appeal, is merely drawing attention to the inadequacy of para 42 in the CFI’s judgment, Case T-313/02 Meca-Medina andMajcen v Commission [2004] ECR II-3291.
  • 23 ‘The EU and Sport: Background and Context’ (n 16) 101 and 104.
  • 24 ibid especially 70. 25 Walrave and Koch (n 1). See Ch 4.2.
  • 26 Bosman (n 2). See Ch 4.3.

interest’ formula. That is how and why the Court in Bosman refused to sanction discrimination in club football. But, in its treatment of the substance of the application in Meca-Medina, the Court chose not to mention the ‘purely sporting’ rule, and this is a change of real substance. Rather than seeking in vain for an intellectually credible basis for immunizing sports rules which have an economic effect from review under EU law, Meca-Medina prefers instead to find that there is an overlap between EU law and ‘internal’ sports law, but that the peculiar demands of the lex sportiva may be used to nourish a submission that an apparent restriction is nevertheless an essential element in sports governance. Meca-Medina was concerned with competition law, and on some points of detail competition law is different from free movement law, but the overall shape of the approach used in Meca-Medina is easily transplanted to free movement law. So free movement law, like competition law, should be treated as based on an overlap between EU law and ‘internal’ sports law, with minimal scope for the total exclusion of EU law, combined with a sensitive willingness to assess claims that the lex sportiva contains particular unusual features that are essential in sports governance.

Embracing this approach would not change the outcome of Walrave and Koch or Bosman, but it would make the analysis more intellectually credible. Using this approach, nationality-based discrimination is treated as necessary to sustain the very existence of international representative football competitions. The economic effects of the rule—confining the opportunities enjoyed by players to choose which country to play for and making international football appealing to spectators, sponsors, and broadcasters—are best understood as a necessary consequence of their contribution to the structure of sports governance. So they are not beyond the reach of EU law—rather, they are within the scope of EU law but, because of the special features of sport, not forbidden by it. By contrast, as decided in Bosman, nationality-based discrimination in club football has economic effects, but the Court will not treat it as inherent in the organization of the game and therefore it is fatally exposed to the prohibitions contained in EU law. Meca-Medina rinses the analysis of the unhelpful search for rules ofpurely sporting interest. This may make little, if any, difference to the result of litigation involving the subjection of sports governance to EU law but it provides a more realistic and intellectually sound legal basis for assessing the legitimate nature of the lex sportiva, the web of rules that frames modern sport while also generating profound financial implications.

The background concern is to place the economic objectives of EU internal market law in their wider Treaty-directed social and economic context for the purposes of the interpretation of the basic prohibitions. The Court in and since its landmark ruling in Cassis de Dijon, has interpreted Articles 34 and 56 TFEU to the effect that national rules which serve a sufficiently important interest may be treated as justified trade barriers without explicit recourse to the derogations foreseen by the Treaty in Articles 36, 52, and 62 TFEUTh In the same vein, Wouters provides a supple and context-sensitive interpretation of Article 101(1) TFEU, rather than [1]

an inflated interpretation of Article 101(3) TFEUA8 Exactly this common model spills over into sport. Meca-Medinas acceptance that the anti-doping rules did not constitute a restriction of competition incompatible with Article 101 TFEU, since they pursued a legitimate objective, is functionally aligned with the Court’s Article 45 TFEU judgment in Bosman. That judgment accepts as ‘legitimate’ the perceived sports-specific anxiety to maintain a balance between clubs by preserving a certain degree of equality and uncertainty as to results and to encourage the recruitment and training of young players.29 So too, in Deliege, an Article 56 TFEU case, the Court found that selection rules limited the number of participants in a tournament, but were ‘inherent’ in the event’s organization.[2] [3] [4] [5] [6] Such rules are not beyond the reach of the Treaty, but they are not incompatible with its requirements.

Article 165 TFEU is a helpful basis on which to rest this argument for convergence. Its direction that the Union shall take account of ‘the specific nature of sport’ is not tied to either free movement law or to competition law. It should be understood as applying to both. It is an insistence that all aspects of EU law should be infused by an appreciation of the special features of sport. Such respect is not switched on or off dependent on which particular provisions of the Treaty are engaged.

So where concrete assessment of the extent to which sport is ‘special’ is at stake, EU free movement law and EU competition law should be taken to run in alignment.31 The possibility that action taken by sports governing bodies may fall under both free movement and competition law reveals their unusual, if not quite sui generis, quasi-regulatory nature. The rules of sporting federations need to be assessed in the same contextually sensitive way irrespective of the Treaty provision against which they happen to be reviewed. Were it otherwise, there would be instability caused by strategic selection by litigants between either free movement or competition.

Steve Ross has concluded that ‘the common law and the statutory competition regimes applicable in major Western countries converge, all finding that dominant sports league rules are lawful if reasonably tailored to achieve a legitimate goal’.32 The analysis provided in this chapter and those that precede it fully endorses this finding, and adds that, in the EU context, this convergence spans not only competition but also free movement law. The scope of conditional autonomy properly allowed to sporting bodies under EU law depends on identifying what is truly necessary for the proper organization of sport, and this should not differ depending on whether the search is conducted in the name of free movement or competition. This is to assert the virtue of a convergence in outcome between free movement law and the competition rules.[7] [8] [9] Article 165 TFEU points in exactly this direction, for it mandates a respect for the specific nature of sport which cuts across all areas of EU law.

  • [1] Case 120/78 Rewe-Zentrale AG v Bundesmonopolverwaltung fur Branntwein [1979] ECR 649.
  • [2] Case C-309/99 JCJ Wouters, JW Savelbergh, Price Waterhouse Belastingadviseurs BV v Algemene
  • [3] Raad van de Nederlandse Orde van Advocaten [2002] ECR I-1577.
  • [4] 29 Bosman (n 2) para 106 . 30 Deliege (n 3). See Ch 4.10.
  • [5] The same should apply to the state aid rules too, TFEU, Arts 107—109.
  • [6] S Ross, ‘Competition Law and Labor Markets’ in J Nafziger and S Ross (eds), Handbook onInternational Sports Law (Edward Elgar 2011) ch 12, at 313.
  • [7] See eg M Mataija, Private Regulation and the Internal Market: Sports, Legal Services, and StandardSetting in EU Economic Law (OUP 2016) chs IV and V; K Mortelmans, ‘Towards Convergence inthe Application of the Rules on Free Movement and on Competition’ (2001) 38 CML Rev 613.cf S Weatherill, ‘ “Fair Play Please!”: Recent Developments in the Application of EC Law to Sport’(2003) 40 CML Rev 51, 80—86; R O’Loughlin, ‘EC Competition Rules and Free Movement Rules: AnExamination of the Parallels and their Furtherance by the ECJ Wouters Decision’ [2003] ECLR 62; SWeatherill, ‘On Overlapping Legal Orders: What is the “Purely Sporting Rule”?’ in B Bogusz, A Cygan,and E Szyszczak (eds), The Regulation of Sport in the European Union (Edward Elgar 2007) ch 3.
  • [8] Bernard (n 7).
  • [9] See eg F Scharpf, ‘The Asymmetry of European Integration, or Why the EU Cannot be a SocialMarket Economy’ (2010) 8 Socio-Economic Review 211; M Hopner and A Schafer, ‘Embeddednessand Regional Integration: Waiting for Polanyi in a Hayekian Setting’ (2012) 66 Intl Org 429; D Schiek,
 
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