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Litigating the legislative regime: listed or protected events

It is no surprise that juridification follows in the wake of the combined effects on the broadcasting market of deregulation, technological change, and commodification. An appetite for litigation is the inevitable outcome of this legislatively mis-shapen and commercially sensitive set of rules. But so far the litigation has not disturbed the validity of the regime. The structure of the regime, based on discretionary choices at national level combined with its (admittedly poorly articulated) claim to pursue a balance of rights has so far shielded it from any judicial interference.

In Infront WM AG v Commission the applicant (formerly the Kirch Media Group) objected to the United Kingdom’s list, which affected rights which it owned and which consequently affected its commercial position.215 However, the decision of the Court of First Instance (today the General Court) casts no light on the regime generally. Infront challenged the letter sent by the Commission to the British authorities advising them that it had no objections to the notified measures. The Court concluded that this letter was susceptible to judicial review because, by triggering the mechanism of mutual recognition foreseen by the Directive, it was endowed with binding legal effect and it also found the applicant to possess the necessary standing for the purposes of Article 230(4) EC (today Article 263(4) TFEU). The Court then annulled the decision for procedural reasons. Before the Court of Justice the Commission failed to dislodge the Court of First Instance’s reasoning and the appeal was dismissed^16 The Commission repaired the identified procedural errors by simply re-making all its relevant Decisions^7

The ruling in Infront demonstrates that access to the courts for disgruntled rights holders is possible and it led to procedural renovation, but the decision reveals nothing about more profound questions concerning the willingness of the Union’s judicature to inquire into the Commission’s role under the Directive and/or the choices made by Member States. A much more thorough workout was pursued in three cases with closely similar subject matter which were decided on the same day in July 2013.

The Third Chamber of the Court resisted attempts by UEFA and FIFA to subvert the system.218 Provided that these rulings set a consistent tone for the future,

  • 215 CaseT-33/01 Infront WMAG v Commission [2005] ECR II-5897.
  • 216 Case C-125/06P Commission v Infront WM [2008] ECR I-1451.
  • 217 This is why the list at [2008] OJ C17/7 (n 183) contains references to action taken in 2007. See Commission’s Sixth Report on the application of Directive 89/552, COM (2007) 452, para 2.2.
  • 218 Case C-201/11P UEFA v Commission, CaseC-204/11P FIFA v Commission, and Case C-205/11P FIFA v Commission, judgments of 18 July 2013.

they do much to insulate the regime from effective legal supervision. The Court’s review is light: the rulings assume a generous grant of discretionary decision-making power to the Commission and the ‘listing’ Member States.

The cases were appeals from rulings of the General CouTh19 in which, in each instance, the General Court had dismissed an application for partial annulment of two Commission Decisions. The first and third cases, brought by UEFA and FIFA respectively, were directed against Decision 2007/730, which expressed the Commission’s view that measures taken by the United Kingdom to ‘list’ the Finals of the European Football Championships (EURO) and the World Cup in their entirety were compatible with EU law;22° the second, brought by FIFA, was directed against Decision 2007/479, which expressed the same view in respect of measures taken by Belgium to ‘list’ the Finals of the World Cup in their entirety. The Decisions had their basis in common: the measures had been taken pursuant to Directive 89/552, the predecessor of the procedure currently set out in Article 14 of Directive 2010/13, and they had been duly communicated to the Commission, as foreseen by the Directive.

UEFA and FIFA had a powerful financial interest in the matter, and this is illuminatingly recorded in the Decisions. Of the revenue generated by the sale of the commercial rights relating to the final stage of the EURO, 64 per cent comes from the sale of television broadcasting rights for the matches,22i while FIFA’s primary source of income is the sale of television broadcasting rights to the Finals of the World Cup, which it organizes.222

The Decisions, quoted in the judgments, noted that the Commission was satisfied that the events listed met at least two of the four criteria considered to be reliable indicators of the importance of events for society: (a) a special general resonance within the Member State, and not simply a significance to those who ordinarily follow the sport or activity concerned; (b) a generally recognized, distinct cultural importance for the population in the Member State, in particular as a catalyst of cultural identity; (c) involvement of the national team in the event concerned in the context of a competition or tournament of international importance; and (d) the fact that the event has traditionally been broadcast on free television and has commanded large television audiences.

The applicants pieced together a long list of grounds on which to base the appeal. Most ran in common across the three cases. But none was successful. They failed to persuade the Court that the requirements of clarity and transparency were violated by the United Kingdom or by Belgium. The more substantive allegation that the Commission could not conclude that the United Kingdom had validly considered the entire final stage of the EURO to be an event of major importance, and that in UEFA’s view, the United Kingdom could designate as events of major importance

  • 219 Case T-5 5/08 UEFA v Commission [2011] ECR II-271, Case T-385/07 FIFA v Commission [2011] ECR II-205, CaseT-68/08 FIFA v Commission [2011] ECR II-349, respectively.
  • 222 Case C-204/ 11P (n 218) para 5.
  • 22° In fact the Decision was adopted to fill the gap left by the measure annulled in Case T-33/01 Infront WM v Commission (n 215).
  • 22i Case C-201/11P (n 218) para 5.

only so-called ‘gala’ matches, namely the final and semi-finals, and the matches involving the national teams of that Member State, also failed. FIFA made the same unsuccessful complaint about the United Kingdom and Belgian listing of the World Cup Finals in their entirety. It was plainly true that the United Kingdom and Belgium were more avaricious listers than most Member States, but the Court found that the competition may reasonably be regarded as a single event as a whole rather than as a series of individual events divided up into ‘gala’ and ‘non-gala’ matches—even if the preferred designation may differ from one Member State to another. Moreover Belgium and the United Kingdom’s relatively wide-ranging choice, which would plainly bring some games within the bundle that were less popular than others, was based on all the games having special general resonance at national level and also carrying specific interest for those who do not generally follow football. Note was taken that the tournament as a whole, and so including ‘non-gala matches’, had traditionally been broadcast on free television channels and had commanded large television audiences.223

The Court’s approach upholds the flexibility on which the Directive itself is based. The Court’s Preliminary Observations in the rulings emphasize the Member States’ ‘broad discretion’ in choosing what, if anything, to place on their list, against an assumption that the EU has opted not to harmonize practice but instead to respect the considerable social and cultural differences which exist within the EU in gauging the importance of intervening to make such events available for free. In exactly this vein of allowing room for local particularity, the Court relies on the deliberate absence in the Directive of ‘detailed criteria’ governing the exercise of the discretion.224 It is an approach which, a few months later, the EFTA Court adopted in rejecting a challenge by FIFA to approval by the ESA (the EFTA Surveillance Authority which here performs a function analogous to the Commission within the EU) of Norway’s listing of all matches in the World Cup Finals. The EFTA Court, moving down the track already set by the three Court ofJustice rulings of 2013, emphasized the scope for local choices determined by social and cultural particularities and it found the measure lawful.225 It is crucial that the Commission does not exercise its own power of decision when notified of lists by Member States. Rather it exercises only a power of review.226 And that power of review is limited. Intransparent or wholly irrational choices by a Member State may be invalid. But assuming procedural scrupulousness, the Commission’s power of review must be limited to determining whether the Member States have committed any manifest errors of assessment in designating events of major importance.227 This is a test inspired by the general approach to

  • 223 The Court found the General Court had mishandled this examination by failing to demand sufficient reasoning by the Commission, but this did not affect the final result for there were adequate grounds elsewhere in the judgment.
  • 224 Case C-201/11P (n 218) paras 10-21, Case C-204/11P (n 218) paras 11-22, C-205/11P (n 218) paras 12-23.
  • 225 Case E-21/13 FIFA v EFTA Surveillance Authority, judgment of 3 October 2014.
  • 226 Case C-201/11P (n 218) para 109; also Case E-21/13 (n 225) para 61.
  • 227 Case C-201/11P (n 218) paras 10-21, Case C-204/11P (n 218) paras 11-22, Case C-205/11P (n 218) paras 12-23.

review of EU legislative measures according to which a broad discretion is permitted in an area which entails political, economic, and social choices, and complex assessments.228 It is a test that is, and it is intended to be, deferential to the autonomy of the decision-maker. It was argued in Chapter 7.4 that a test of this type, which recognizes a sporting margin of appreciation, is a good way to understand the conditional autonomy granted to sports governing bodies in the application of EU internal market law: here it is used to shelter the Commission from challenge by those very sports governing bodies.

Claims based on the right to property, and specifically on Article 17(1) of the Charter of Fundamental Rights, failed in the same way in all three decisions of the Court. The use of property may be regulated by law in so far as this is necessary for the general interest. Here the Court drew on its own preliminary observations in the ruling.229 There it had found that the designation envisaged by the Directive had ‘unavoidable consequences’ for the freedom to provide services, the freedom of establishment, the freedom of competition, and the right to property, but that— relying on Recital 18 in the Preamble to Directive 97/36 (which is now Recital 49 of Directive 2010/13)—i t is essential that Member States should be able to take measures to protect the right to information and to ensure wide access by the public to television coverage of national or non-national events of major importance for society. The Court drew too on a recital that placed this motivation also in the context of the public interest in cultural diversity and media pluralism. And it then applied this reasoning to reject this ground of challenged30

This is certainly important. There was an admitted interference with property rights. The EU rules reduced FIFA and UEFA’s earning power by taking away the possibility to sell rights on an exclusive basis to a broadcaster whose services are not provided free to viewers. But the right to property, though long recognized and protected by EU law, has never been treated as an absolute right. Instead, as the Court has put it, it ‘must be viewed in relation to its social function’ and the Court has no objection to legislative restriction on its exercise ‘provided that those restrictions in fact correspond to objectives of general interest ... and do not constitute a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed’.23! A margin is allowed to the EU legislature in deciding to intervene in property rights. The Court attributes no absolute status to property rights or to the freedom to conduct a business, but rather accepts that in principle their exercise may be limited by market regulation in the general interest. [1] [2] [3] [4]

This is not a sports-specific concern. Nor is it the exclusive preserve of the Charter of Fundamental Rights—in fact the Court’s case law long pre-dates the Charter’s acquisition of binding effect in 2009 and the Charter is in effect simply a confirmation of the Court’s basis for review of EU measures that regulate the exercise of property rights. The overall theme is clear. It holds that the Court will not lightly set aside legislative reconciliation of competing interests. It requires that the legislative process shall strike ‘a fair balance between them’, but rarely does it find that this test has not been met.232 The three cases brought without success by FIFA and UEFA fully conform to this trend.

So too does another case that arose in connection with Directive 2010/13. This is Sky Osterreich GmbH, which deals with Article 15 of the Directive on short news reports.233 Directive 2010/13’s bite into the contractual freedom of the exclusive holder of broadcasting rights was held valid because of the public interest in permitting other broadcasters the right to use short extracts from events of high interest to the public in their own coverage. As is the norm in such cases, the freedom to conduct a business recognized by Article 16 of the Charter was not treated as absolute, but instead fell to be assessed in the light of its social function. The Court asserted that ‘the freedom to conduct a business is not absolute, but must be viewed in relation to its social function’; and added that ‘the freedom to conduct a business may be subject to a broad range of interventions on the part of public authorities which may limit the exercise of economic activity in the public interest’^4 It then found that what was at stake was a ‘balance’ between, on the one hand, the importance of safeguarding the fundamental freedom to receive information and the freedom and pluralism of the media guaranteed by Article 11 of the Charter and, on the other, the protection of the freedom to conduct a business guaranteed by Article 16 of the Charter. The limitations on SKY’s freedom to conduct a business were not disproportionate and so they were lawful. The Directive properly pursued ‘the necessary balancing of the rights and interests at issue’.235 This was so even though, as the Court carefully noted, the Directive meant that SKY, as the holder of exclusive broadcasting rights, could not demand remuneration greater than the additional costs directly incurred in providing access to the satellite signal, which were nonexistent in this case.

The ruling in Sky is cited in the trio of cases involving UEFA and FIFA in support of the proposition that the marketing on an exclusive basis of events of high interest to the public is liable to restrict considerably the access of the general public to information relating to those events, and that, in a democratic and pluralistic society, the right to receive information is of particular importance.236

Ultimately the trio of judgments of July 2013, almost identical triplets, strongly uphold the Commission’s management of the political choices made by the EU in the Directive and by the Member States pursuant to the Directive. Sky underlines in similar vein the Court’s reluctance to protect commercial autonomy from regulatory intervention, provided there is no manifest error in the legislative act. This legislative regime is in its detail poorly shaped and its policy aims poorly articulated. But the Court will not find legal reasons to disturb it. The message of the rulings is that disgruntled right holders need to operate within the national political process to lobby to have their event removed from the list of protected events.

  • [1] 8 eg Case C-491/01 Ex parte British American Tobacco (Investments) and Imperial Tobacco [2002]ECR I-11453, para 123; Case C-547/14 Philip Morris Brands, judgment of 4 May 2016, para 166. 229 Case C-201/11P (n 218) paras 10-21, Case C-204/11P (n 218) paras 11-22, Case C-205/11P(n218) paras 12-23. 230 Case C-201/11P (n 218) paras 102-104, Case C-204/11P (n 218) paras 110-12, of Case C-205/11P(n 218) paras 126-27. See also Case E-21/13 (n 225).
  • [2] 1 eg Case C-491/01 R v Secretary of State, exp BAT and Imperial Tobacco [2002] ECR I-11543,
  • [3] para 149; Case C-280/93 Germany v Council [1994] ECR I-4973, para 78; Cases C-184/02 and
  • [4] C-223/02 Spain and Finland v Parliament and Council [2004] ECR I-7789, para 52.
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