CJEU decides in favour of the European Super League and declares FIFA & UEFA rules as contrary to EU Competition Law
Article 101 TFEU states: “The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market...”
Article 102 TFEU states: “Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.”
The main proceedings were brought by the applicant, European Superleague Company SL (ESL) against UEFA and the Union of European Football Associations (UEFA’) before of the Commercial Court in Madrid (Referring Court). However, in May 2021, the presiding Court referred the case to the CJEU for a preliminary ruling on two matters:
Whether or not the way the FIFA/UEFA Rules were drafted breached competition law in terms of Article 101 TFEU; and
Whether or not FIFA and UEFA held a dominant position as provided for in Article 102 TFEU in the world of football.
Article 73 of the FIFA Statutes states: “Associations, leagues or clubs that are affiliated to a member association may only join another member association or take part in competitions on that member association’s territory under exceptional circumstances. In each case, authorisation must be given by both member associations, the respective confederations and by FIFA.”
Background to the case
The ESL is a company governed by private law which was established in Spain on the initiative of a number of the best football clubs including the likes of Real Madrid, Juventus, Liverpool and Manchester City.
On 21 December 2023, the Court of Justice of the European Union (CJEU) delivered a preliminary ruling whereby it concluded that the Fédération internationale de football association (FIFA) Statues (FIFA/UEFA Rules) infringed EU Competition law, specifically Article 101 and Article 102 of the Treaty on the Functioning of the European Union (the TFEU).
The ESL’s main goal was to set up a fresh and exciting professional football competition, to be called the Super League, which would be divided into:
12-15 professional football clubs having the status of “Permanent Members”; and
A number of other professional football clubs having the status of “Qualified Clubs”, which would be chosen through a predetermined process.
The project being proposed was to be regulated by a Shareholder & Investment Agreement (Agreement) which would provide for the drafting of a number of contracts to bind the respective football clubs wishing to participate.
However, in view of the abovementioned Agreement, and in accordance with the FIFA Statutes, it was agreed that FIFA and UEFA had to be informed of the Agreement for their prior authorisation, given their dominant position in the market as the two associations responsible for the management and organisation of football at all levels.
Strongly against this notion of ESL, FIFA and six continental confederations (UEFA included) released the following statement: “[..] any clubs or player involved in such a competition would, as a consequence, not be allowed to participate in any competition organised by FIFA or their respective confederation.”
Shortly afterwards, another statement was released whereby it was announced that “The clubs concerned will be banned from playing in any other competition at domestic, European or world level and their players could be denied the opportunity to represent their national teams.”
The above two statements resulted in many teams who were once part of the Permanent Members, to pull out from going forward with the creation of the ESL, given the severity of the threats raised by FIFA and UEFA.
Analysis of the CJEU’s Preliminary Ruling
Firstly, the CJEU had to decide on whether the FIFA/UEFA Rules and the way these were drafted, breached Article 101 TFEU. Secondly, it had to confirm or otherwise, if FIFA and UEFA held a dominant position in the relevant market.
On the 15 December 2022, Advocate General Rantos delivered a non-binding Opinion stating that FIFA and UEFA’s prior approval in allowing a league such as the ESL to go ahead provided their authorisation is granted, did not necessarily go against Article 101 and Article 102 TFEU.
However, the CJEU in its preliminary ruling of the 21 December 2023, disagreed with Advocate General Rantos and found in favour of the ESL stating that the rules of FIFA and UEFA, on the required need of their approval to enter football competitions, went against EU competition law.
The CJEU went into great detail on whether or not FIFA and UEFA held a dominant position in the football world. It concluded that the way their rules were drafted allowed them the possibility of having a so-tospeak “decision making power”, which ultimately led to the two associations abusing of their position without having ensured that the powers granted to them were:
Transparent;
Objective;
Non-Discriminatory; and Proportionate.
The above was brought out by the Judges in their ruling where they reflected that there existed no framework that ensured that the above four requirements were present, resulting in a clear breach of EU competition law under Article 101 TFEU. The FIFA/UEFA Rules were by object, a clear violation of EU competition law, with the breach being so grave that the CJEU felt there was no need to examine its effects for the purposes of Article 101 TFEU.
In terms of Article 102 TFEU, it was confirmed that FIFA and UEFA had also abused of their dominant position in the market. Bearing in mind that their prior approval enabled them to prevent the entry of potentially competing clubs on the market, this resulted in an obvious abuse of their dominant position. FIFA and UEFA failed to ensure that competitions such as the ESL were not “subject to requirements which are either different from those applicable to competitions organised and marketed by the decision-making entity or are identical or similar to them but are impossible or excessively difficult to fulfil.”
Concluding Remarks
What is so interesting about this case is that while the CJEU’s preliminary ruling did confirm that FIFA and UEFA were in breach of Article 101 and 102 TFEU, it didn’t actually comment on whether a league such as the ESL should be allowed or otherwise.
The preliminary ruling did however serve as a wakeup call for other sporting organisations to amend their rules, should they be, in any way, anti-competitive in nature.
Could this preliminary ruling be the end of the FIFA monopoly?
Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report.