On 8 December 2017, the European Commission decided that the eligibility rules of the International Skating Union (ISU) breached EU competition law. The Commission’s objections focused on the ability of the ISU to impose severe penalties on athletes participating in unauthorised competitions organised by potential rival organisations. In the eyes of the Commission, this enables the ISU to pursue its own commercial interests, restricting the commercial freedom of athletes and potentially foreclosing competing organisers.
The ISU is the sole governing body for ice skating (both speed and figure skating) and its members are national ice skating associations. The ISU and its member organisations are responsible for organising major sporting events in the sport including the Winter Olympics and the World and European Championships.
The Commission opened proceedings on 5 October 2015 following a complaint from two Dutch ice skaters, threatened by the ISU with a permanent ban if they participated in an event run by a rival organisation in Dubai. The Commission issued a statement of objections to the ISU on 27 September 2016.
The Commission sided with the ice skaters in deciding that the rules were anti-competitive, based on the following:
- The ISU can impose severe penalties (including lifetime bans) at its own discretion, even if the independent competitions pose no risk to legitimate sports objectives;
- The eligibility rules restrict the commercial freedom of athletes, since they are, in effect, prevented from participating in independent skating events and therefore deprived of additional sources of income.Commissioner Vestager stressed the potential impact this could have on athletes, given their relatively short speed skating careers; and
- The rules also limit competition from potential rival organisers, since they are unable to attract top athletes for their own competitions.
The ISU has 90 days to remedy the breach and abolish or modify the eligibility criteria. It must also refrain from enforcing the rules, and in particular the penalties. Failure to comply could result in a fine up to 5% of average daily turnover. The Commission, however, did not impose a fine for the breach of EU competition law.
This is a timely reminder for sports governing bodies that in order to ensure compliance with EU competition law:
- Sporting rules must pursue a legitimate objective.In this case, the Commission did not consider that the commercial interests of the ISU were a “legitimate sports objective”.According to the press release, these may include the protection of the integrity and proper conduct of sport, and the health and safety of athletes.The ISU’s discretion in imposing a ban is likely to have been instrumental in this assessment;
- Any restrictions must be proportionate for the purposes of that objective.In this instance the Commission considered that the penalties were disproportionately punitive.A lifetime ban would have a significant impact on athletes’ careers and livelihood; and
- Eligibility criteria must be objective, transparent and non-discriminatory.
This decision should be seen as a warning shot for sports governing bodies in a context of increasing antitrust scrutiny. It has been a number of years since the Commission accepted commitments to end its concerns in relation to Formula One, but more recently, for example, the Belgian, Irish and Italian competition authorities have each looked at rules concerning equestrian events and the Swedish authority investigated rules concerning the Swedish Bodybuilding Federation. In basketball, two separate governing bodies are embroiled in a dispute which they have each taken to the Commission: both the world basketball’s governing body FIBA and Euroleague Basketball have complained to the Commission on the grounds of EU antitrust.