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A Sporting Margin of Appreciation

The Court’s approach narrows the circumstances in which a sporting practice is likely to fall outwith the scope of EU law, and instead loads a heavy emphasis on the question whether those practices may be treated as justified in view of their place within the lex sportiva. This, as explained in this chapter and those that precede it, is firmly in line with the Court’s approach to internal market law generally, which has within it an embedded functionally broad dynamic. It is also, as argued earlier, intellectually credible: rare will be the sporting practice that does not have the economic effect or intent that acts as the crucial jurisdictional trigger for the application of EU law. This approach does, however, make heavy demands of the Court and the Commission, as the bodies charged with deciding how far sport should be treated as ‘special’ within the scope of EU law. And there is a legitimate concern that the Treaty provides no clear mandate or useful guidance.

Article 165 TFEU directs that ‘the specific nature of sport’ shall be taken into account by the EU. The Court in Bernard accepted that this influences the interpretation of internal market law even if no explicit tie is made between Article 165 and the free movement or competition rules in the Treaty.34 But in Bernard the Court also simply treated Article 165 in this context as nothing new: it corroborates the case law. And in fact Article 165 does nothing concrete to address the key questions about how special sport is. Nor does the Treaty more widely. The structural peculiarity of the EU system, which is particularly acutely felt in internal market law, is that the provisions on free movement and competition law stretch more widely than the legislative competences conferred on the EU. This has provoked vivid inquiry into the risk that EU law tends to promote a deregulatory dynamic which is inadequately compensated for by re-regulatory potential: to be more institutionally specific, the fear is that the Court undermines national choices, while the EU legislative process is (constitutionally and politically) unable to re-impose solutions at the EU level.35 Most of the critical literature addresses matters of social welfare and labour market regulation: the present concern is the way this tension operates in application to sport. In the gap between the relatively broad and functionally driven provisions on free movement and competition, on the one hand, and, on the other, the cramped scope for EU legislative action, yawns the most awkward task of adjudication: how to judge whether a practice that impedes the creation of the internal market should be treated as justified in circumstances where, by definition, the Treaty is deficient in providing useful guidance on EU policy goals. On this model it was necessary to judge the compatibility of sporting practices with EU law where they cut across the creation of the internal market without any explicit help from the Treaty: since 2009 there has been explicit help, in Article 165 TFEU, but this is not of any concrete assistance to the task of case-by-case adjudication.

There is a good normative argument that appreciation of this structure should induce the Court to be especially cautious when it applies internal market law to areas where the EU’s legislative competence is slim or non-existent and where the Treaty offers it little or no guidance on policy and priorities. There is also a good descriptive argument that this caution characterizes the Court’s treatment of sport under EU free movement and competition law. The Court has never refused to address the argument that sport is ‘special’. Quite the reverse. In Walrave and Koch it took seriously the legitimate place of nationality discrimination in representative sport;36 in Bosman it famously embraced ‘the considerable social importance of sporting activities’ and the legitimacy of ‘maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and ... encouraging the recruitment and training of young players’^7 in Deliege it found selection rules that excluded some athletes to be ‘inherent’ in sporting competition^8 and in Meca-Medina it endorsed the place of anti-doping rules and the imposition of sanctions in the event of breach.39 The Commission too has openly treated sport as an economic sector with distinctive characteristics that must inform the interpretation and application of EU law: so in ENIC it approved a restriction on competition in the market for acquisition of clubs as necessary to sustain uncertainty of outcome and the integrity of sporting competition.40 None of this comes explicitly from the Treaty. It comes instead from the creative approach to mediating the intersection of internal market law and context-specific practices shaped over time by the Court and the Commission. Article 165 TFEU’s assertion that sport has a ‘specific nature’ reflects and confirms this. In summary, EU law accommodates the special concerns of sports governance in the interpretation and application of its rules.

‘The EU Constitution of Social Governance in an Economic Crisis: In Defence of a Transnational Dimension to Social Europe’ (2013) 20(2) MJ 185; F De Witte, ‘The Architecture of a Social Market Economy’ LSE Law, Society and Economy Working Paper 13/2015; A Veldman and S De Vries, ‘Regulation and Enforcement of Economic Freedoms and Social Rights: A Thorny Distribution of Sovereignty’ in T Van den Brink, M Luchtman, and M Scholten (eds), Sovereignty in the Shared Legal Order of the EU (Intersentia 2015) ch 4.

  • 36 Walrave and Koch (n 1). 37 Bosman (n 2) para 106. 38 Deliege (n 3).
  • 39 Meca-Medina (n 4).
  • 40 COMP 37.806 ENIC/UEFA, IP/02/942, 27 June 2002. See Ch 5.2.

This is an application of EU internal market law more generally. The Court is noticeably careful to allow public authorities in the Member States a discretion or a margin of appreciation in circumstances where particularly sensitive social and cultural choices made at national level come into collision with trade integration, a fortiori where the matter generating tension escapes in whole or in part the EU’s legislative competence.[1] [2] [3] [4] [5] [6] [7] Sport engages the practices of private parties, but the thematic openness of EU law to its special concerns is plain. In fact, albeit the language used differs, there are parallels between the interpretative or adjudicative approach to sporting autonomy under internal market law and the Court’s treatment of acts of the EU’s own institutions. The Court enjoys a jurisdiction conferred by the Treaty to review the legality of not merely administrative acts but also legislative acts adopted at EU level.42 It is, however, sensitive to the limits of the judicial role and, in particular, its relationship to the political process. So it has crafted a consistently used formula which expresses its reticence to intervene aggressively in chosen legislative solutions. The Court insists that the legislature must be allowed a broad discretion in an area which entails political, economic, and social choices on its part, and in which it is called upon to undertake complex assessments.43 In consequence, a measure must be manifestly inappropriate having regard to its objective before the legislative choice made at EU level will be regarded as invalid: ‘the criterion to be applied is not whether a measure adopted in such an area was the only or the best possible measure’.44 This means that there is a margin of appreciation granted to the EU’s legislative institutions in deciding which of several options to choose. This does not discharge the Court from its proper constitutional function of ensuring that the scheme of the Treaty is respected. On occasion legislative choices have been upset, for example for want of competence^ misuse of institutional powers/6 or violation of fundamental rights/7 But where political, economic, and social choices are at stake, a discretion is allowed: only legislative choices that verge on the absurd are likely to be condemned as manifestly inappropriate. The impression is that the Court is anxious to respect the expertise and legitimacy of the political process.

The review of the lex sportiva practised by the Court has something in common with this relatively deferential approach. The comparison is between the relatively large measure of discretion allowed to the EU institutions in making complex assessments about matters of socio-economic importance and the room allowed to private actors such as sports bodies to govern their own affairs in circumstances where the Court lacks the expertise and the Treaties lack the relevant guiding principles required to make detailed assessments of choices made. A broad discretion should be admitted. A measure within the lex sportiva must be manifestly inappropriate having regard to its objective before the choice will be regarded as invalid; the criterion to be applied is not whether a measure adopted in such an area was the only or the best possible measure. Decisions such as Walrave and Koch, Deliege, and Meca-Medina, as well as the Commission’s Decision in ENICfit this model. Bosman too did not outlaw the very idea of a transfer system, but rather the excessively restrictive version in force at the time, which held even out-of-contract players within its grip. The Court’s refusal in Bosman to accept nationality discrimination in club football is a reminder that there are limits to the Court’s readiness to review and approve the lex sportiva, but a red light is not the norm in the case law.

Insertion of a genuine social dialogue should enhance the width of the margin of appreciation allowed to sports governing bodies. Commitment to social dialogue is written into the Treaty. Article 152 TFEU directs that the EU ‘recognises and promotes the role of the social partners at its level, taking into account the diversity of national systems’ and that it ‘shall facilitate dialogue between the social partners, respecting their autonomy’. Article 154(1) TFEU adds that the Commission ‘shall have the task of promoting the consultation of management and labour at Union level and shall take any relevant measure to facilitate their dialogue by ensuring balanced support for the parties’. Article 155 envisages that dialogue between management and labour may lead to agreements apt for conversion into EU legislation.

‘Social dialogue’ has been promoted within the EU in recent years and it has exerted some influence in sport.[8] [9] A committee was created in 2008: it is chaired by the Union of European Football Associations (UEFA) and in 2012 it agreed minimum requirements for standard player contracts.49 Its impact on the application of internal market law deserves to be taken seriously. Sporting practices would and should be more likely to survive review pursuant to EU law if structured around a more inclusive participatory framework of dialogue and rule-making—to distance them from a horizontal restrictive practice struck between and favouring employers and instead to structure the arrangements more coherently as a genuine framework to govern the industry in a way that ensures representation of all affected interests.50 In a sense this is to push for respect for the lexsportiva on condition that it becomes more closely comparable with ‘ordinary’ law that is the product of some kind of open democratic and transparent process. The lex sportiva should not be treated as illegitimate just because it is the product of private ordering, but the legitimacy of its claim to a deferential margin of appreciation when reviewed under EU law is much stronger if the power wielded in its name is accompanied by a demonstrated concern to reflect and represent all affected interests, not just those of the powerful top-down rule-makers.

In summary, the conditional autonomy of sports federations under EU law, which has been the thematic core of these chapters dealing with internal market law, reflects ‘the specific nature of sport’ asserted but not elaborated by Article 165 TFEU. An overlap between EU law and ‘internal’ sports law is recognized, but, within that area of overlap, sporting bodies have room to show how and why the rules are necessary to accommodate their particular concerns. This line of reasoning does not make it simple in contested cases to discover which rules are necessary for the effective organization of sport. And attention must be paid to how much margin should be allowed to sports bodies in defining what is truly necessary for or inherent in their sport. But as a minimum this line of analysis ensures the right questions are asked. It prevents intellectually wasteful arguments about what is ‘sporting’ and what is ‘commercial’, and instead embraces the overlap of the two spheres. Then, within that zone of overlap, there is room for serious discussion of what is necessary for and/or inherent in the structure of sports governance. Accordingly, a strategy of inclusion, not exclusion, should inform sporting bodies’ dealings with the EU’s institutions: they must engage with the EU on its terms, but they can expect that those terms include sensitivity to the sports-specific context within which practices are reviewed.

  • [1] eg Case C-112/00 Schmidberger v Austria [2003] ECR I-5659; Case C-36/02 Omega Spielhallen[2004] ECR I-9609; Case C-391/09 Runevic-Vardyn [2011] ECR I-3787; Case C-156/13 Digibet,judgment of 12 June 2014; Wouters (n 28). Admittedly there are exceptions where the Court lackscaution and sensitivity to the full breadth of the values at stake, most of all Case C-438/05 Viking Line [2007] ECR I-10779; Case C-341/05 Laval [2007] ECR I-11767.
  • [2] 42 TFEU, Art 263 provides for a direct action before the Court, but there are also other routes tobringing a challenge on validity before the Court, including the Article 267 preliminary referenceprocedure.
  • [3] eg Case C-84/94 United Kingdom v Council [1996] ECR I-5755, para 58; Case C-491/01Ex parte BAT [2002] ECR I-11453, para 123; Case C-58/08 Vodafone [2010] ECR I-4999, para 52.
  • [4] Vodafone (n 43) para 52.
  • [5] eg Case C-376/98 Germany v Council and Parliament [2000] ECR I-8419.
  • [6] 46 eg Case C-28/12 Commission v Council, judgment of 28 April 2015.
  • [7] eg Joined Cases C-293/12 and C-594/12 Digital Rights Ireland Ltd, judgment of 8 April 2014;Case C-236/09 Association belge des Consommateurs Test-Achats and others v Council [2011] ECR I-773.
  • [8] See R Branco Martins, ‘Agenda for a Social Dialogue in the European Professional Football Sector’in S Gardiner, R Parrish, and R Siekmann (eds), EU, Sport, Law and Policy (TMC Asser 2009) ch21; D McArdle, Dispute Resolution in Sport (Routledge 2015) ch 10; R Parrish, ‘Social Dialogue inEuropean Professional Football’ (2011) 17 ELJ 213; R Parrish, ‘The European Social Dialogue: A NewMode of Governance for European Football?’ in A Duval and B Van Rompuy (eds), The Legacy ofBosman: Revisiting the Relationship between EU Law and Sport (TMC Asser/Springer 2016) ch 8;M Colucci and A Geerraert, ‘Social Dialogue in European Professional Football’ (2011) 11(3—4) IntlSports LJ 56.
  • [9] accessed 29 November2016. See Parrish (2016) (n 48) 197—201; Colucci and Geerraert (n 48) 64—67.
 
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