As highlighted in our previous posts, competition law is increasingly being enforced in the sports sector, both at the national and European level.
Athletes and other organisations subject to sporting regulations are becoming more aware of their rights under competition law. Complaints against sport’s governing bodies are increasingly common and antitrust investigations more likely than ever. Interestingly, one area where authorities have focused their gaze has been at conduct aimed at preventing competing associations from organising their own competitions and members from participating in such competitions.
Most recently, the Italian Competition Authority (ICA) has fined the Italian Federation of Equestrian Sports (FISE) for breaching commitments approved by the ICA in 2011. In a separate matter, the European Commission has received two complaints against the International Cycling Union for breach of competition law. It remains to be seen whether the Commission will open a formal investigation.
In Italy, FISE has exclusive jurisdiction to organise national professional competitions in certain equestrian disciplines. Amateur competitions, meanwhile, can be organised by other sports associations as well. However, FISE also has the regulatory power to define the concept of “professional sport activity”, and in setting this definition, it was able to unilaterally determine the range of competitions which it could organise exclusively.
In 2007, the ICA opened an investigation alleging that FISE obstructed other associations from organising equestrian competitions, thereby breaching the competition rules under Articles 101 and 102 TFEU. The investigation was closed in 2011, when the ICA accepted the commitments offered by FISE. The equestrian governing body committed to define the concept of “professional sport activity” on the basis of precise technical and sportive rules. According to the commitments, the organisation of non-professional “amateur” competitions should have been left open to other sports associations as well.
The ICA (re)opened the case in May 2018 having received complaints challenging FISE’s conduct.
The ICA’s decision
In October 2019, the ICA found that FISE breached the 2011 commitments and abused its dominant position by introducing two new regulations on show-jumping and combined driving disciplines. FISE defined the concept of “professional sport activity” extremely broadly, so as to include many activities which were previously considered amateur. It thereby de facto excluded other sport associations from organising equestrian competitions.
The competition authority has found that FISE committed further exclusionary abuse by rendering the organisation of any competition at the amateur level subject to its discretionary approval and sending letters of formal notice to the organisers of (non FISE-approved) amateur competitions and events.
The ICA rejected new commitments offered by FISE to remedy the abuse and the breach of the 2011 commitments, finding that the violation of previously imposed commitments cannot be resolved using the same tool. Instead, the ICA has imposed a fine of EUR 450,000 on FISE.
Cycling: a new investigation?
Two complaints have recently been lodged with the European Commission against the International Cycling Union (UCI), the global association of national cycling federations. UCI manages, promotes and regulates several cycling disciplines worldwide.
The first complaint was filed by Velon, a joint venture of professional cycling teams. Velon gathers racers’ live data (e.g., speed, power heart rate), infographics and digital content and publishes it on its “VelonLive” platform. In addition, Velon operates the “Hammer Series”, a multiple stage (sprint, climb, team time trial) road bicycle race for teams rather than individuals.
In its complaint submitted at the end of September 2019, Velon appears to focus on two separate decisions of the UCI that it alleges would amount to an exclusionary abuse of market dominance and to unlawful decisions of an association of undertakings. First, the UCI decided not to recognise the “Hammer Series” as a “series”, as defined in the UCI regulations. This means that the “Hammer Series” would not benefit from the same promotion, calendar coordination and ranking relevance as other “series” events. Second, Velon alleges that the UCI passed new regulations “that sought to give itself and race organisers ownership and control over the teams’ business on live race data”, thereby virtually rendering Velon’s business model on data obsolete.*
The UCI faces another competition law complaint at the EU level, from the Italian Professional Cycling League (LCP), an association representing Italian organisers of cycling events as well as all professional teams affiliated with the national federation. LCP’s complaint is aimed at the planned reduction concerning the appointment of the teams participating in the top-tier UCI World Tour, in particular the reduction in the number of additional teams to be invited by the organisers (so-called “wildcards”).
In addition to the recent Velon complaint and the Italian decision against FISE, in December 2018, the Belgian Competition Authority accepted commitments from the International Equestrian Federation to allow, inter alia, participation in competitions not previously approved by the federation.
Another recent example of such conduct being sanctioned is the European Commission’s decision of December 2017 against the International Skating Union. Here, the Commission found that rules restricting competition and enabling the relevant regulatory body to pursue its own commercial interests to the detriment of both athletes and organisers of competing events are unlawful.
The complaints filed against the UCI are not yet public. It will be interesting to see whether the Commission decides to take action and, if so, what the scope of any such investigation will be. A UCI investigation could cover a broad spectrum of allegations: new rules for the identification of teams, exclusionary conduct as well as appropriation of ownership and control over Velon’s business. In the International Skating Union case, the Commission didn’t formally initiate proceedings until more than one year after the submission of two complaints, so we could be in for a similarly long wait with this case.
*Most recently, it has become public that Velon has added an “addendum” to its complaint, in which it alleges that UCI discriminated against women’s cycling when it scheduled the races for 2020.