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EU’s Vestager rules on anti-competitive practices

EU competition commissioner, Margrethe Vestager, has warned sports federations across Europe that Brussels would step in if they abused their positions as she issued a ruling critical of ice skating’s governing body.
Vestager has ordered the International Skating Union (ISU) to scrap ‘disproportionately punitive’ sanctions for athletes who participate in events the body has not authorised writes POLITICO‘s Nicholas Hirst.

The Danish commissioner told sports bodies they should put their own houses in order if they did not want Brussels to intervene.

This decision doesn’t mean the Commission is trying to be the referee in every dispute about sport.
By taking an extreme case like this, I do hope we can send a message.
Sports bodies around Europe, some of which oversee multi-billion euro industries, had been watching the skating case closely, anxious to see whether the European Commission was ready to step onto their turf.

In recent years, the Commission has received a litany of competition complaints from the world of sports, including football and basketball, but has generally shown a reluctance to act on them.

Vestager said national courts and antitrust authorities were generally better placed to deal with competition issues. But she also called on sporting organisations to do more to ‘find solutions and mechanisms for solving disputes’.

Margrethe Vestager – Photo: John Thys/AFP via Getty Images

James Ogilvie, an EU affairs consultant with expertise in global football, said the decision would encourage companies that wanted to set up rival events to those run by established federations:

We can expect more challenges in this specific area in the coming years as the emboldened private sector stakeholders seek to further open the market of competition organisation.’

Mark Tuitert and Niels Kerstholt

The Commission’s two-year-long probe into the 125-year-old ISU followed a complaint by two Dutch speed skaters, Mark Tuitert, a former Olympic champion, and Niels Kerstholt, a former world champion.

Because of the ISU’s rules, they were prevented from taking part in a lucrative 2014 race planned in Dubai by a South Korean company called Icederby.

Icederby offered a top prize of $130,000 — compared to the €2,000 a top speed-skater could aspire to win at ISU events, according to the skaters’ lawyer.

They said the ban unduly restricted their ability to ply their trade.

Vestager explained further:

A speed skater’s professional career doesn’t last all that long.
So athletes like Mark Tuitert and Niels Kerstholt should have the chance to make the most of the years while they’re at the top of their game.

Tuitert welcomed the decision on Twitter:

EU Athletes, a federation representing more than 25,000 professional athletes, also praised the verdict.

Vestager said that the ISU’s policy of threatening lengthy or even lifelong bans on athletes who took part in unauthorised events:

Served to protect [ISU’s] own commercial interests and prevent others from setting up their own events.
The revised rules should open up new opportunities for athletes and competing organisers, to the benefit of all ice skating fans.

But the ISU defended its position, saying its system of authorising events was intended only to protect the health and safety of skaters. It also noted it had already revised its rules, though Vestager said the changes did not go far enough.

The ISU said in a statement:

The ISU eligibility rules have never been used to further the commercial interests of the ISU — a recognised not for profit organisation — or to block independent organisers.

The ISU said it would review the decision and consider an appeal.

Sport governance associations — effectively a legal cartel — enjoy an exemption from EU competition rules, but within limits.

According to Ben Van Rompuy, a law professor who represented the skaters, many sporting federations threaten similar bans in their rulebooks.

Athletes for netball, skiing and hockey, among other sports, risk indefinite bans if they play in unauthorised events. Many sports, including powerlifting, volleyball and badminton, also impose bans in such circumstances, although they are capped.

The International Olympic Committee had expressed concerns about the skating case.

Its president, Thomas Bach, told POLITICO last month that antitrust authorities should not treat sports bodies like:

Manufacturers of cars or a producer of low-fat milk.

The Commission opted not to sanction the ISU for its conduct, although it could impose fines if the ISU refuses to comply with its decision.

How does this affect Powerboat Racing?

In 2017 we know that a National Governing Body has denied the issuance of racing licences to competitors that have taken part in ‘unsanctioned events’ and another has banned a competitor from racing for one year for taking part in a ‘break-away’ series.

Vestager’s ruling would now deem those actions by the National Governing Bodies illegal with the Tuitert and Kerstholt case being retrospective, the European Commission goes on to advise victims of anti-competitive practices:

Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal.

The Antitrust Damages Directive, which Member States had to transpose into their legal systems by 27 December 2016, makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.

Interesting times.


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