On the 30 May 2012, the Irish Competition Authority (the “Authority”) announced that Show Jumping Ireland (“SJI”) had agreed to amend an alleged anticompetitive rule which prevented its members from competing at unaffiliated show-jumping events with a prize fund in excess of €50/£50, and with potential penalties for non-observance.
The Authority had initially formed the opinion that the rule amounted to a decision of an association of undertakings, which was likely to restrict the participation of SJI members at unaffiliated show-jumping events and the organisation of such unaffiliated events in Ireland. The Authority further considered that the rule was disproportionate and was, accordingly, likely to infringe section 4 of the Competition Act 2002 (as amended) and Article 101 of the Treaty on the Functioning of the European Union (“TFEU”).
However, SJI co-operated with the Authority’s investigation and agreed to amend the rule in order to address the Authority’s concerns. The amendment of the rule means that members of SJI may now participate in unaffiliated events with a prize fund greater than €50/£50, without being penalised for so doing, provided that the unaffiliated event concerned (i) has signed up to health and safety standards specified by SJI; and (ii) has adequate insurances in place. Accordingly, it is clear that the Authority looked unfavourably on an outright ban on its members participating in events organised by any competitor to SJI. However, it would appear that the Authority was prepared to accept arguments related to the need to ensure that competitors in such events were appropriately protected from a health and safety perspective.
It has been ninety years since Mr Justice Oliver Wendell Holmes Jr. decided in Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs that the US Sherman Antitrust Act did not apply to Major League Baseball because, broadly, baseball did not constitute interstate commerce and was merely “a form of amusement”. However, more recently, we have witnessed an ever-increasing reliance on competition claims in challenging the rules, procedures and decisions of national sports governing bodies (“NGBs”) and international sporting federations (“ISFs”). NGBs and ISFs are “undertakings” for at least part of the time (i.e. when they engage in economic activity). NGBs are usually associations of clubs and ISFs are usually associations of NGBs. Further, the circumstances by which sport is governed are inherently monopolistic and competition regulators like tackling problem-causing monopoly situations.
Accordingly, it is clear, from decided EU cases such as Meca-Medina and MOTOE (the Greek motorcycle case), American Needle v. AFL in the United States and Hendry v. WPBSA in the UK, that decisions of NGBs and ISFs are not immune from challenge under the competition rules. Further, the relatively recent entry into force of Article 165 TFEU which provides, inter alia, that the EU shall contribute to the promotion of sporting issues, whilst “taking account of its specific nature” does not alter the position. The autonomy of NGBs and ISFs to govern their respective sports is subject to compliance with the competition rules, with the recent decision of the Authority being yet another case in point.