EUROPEAN SUPERLEAGUE: ANALYSIS OF THE JUDGEMENT

1. Introduction

At the beginning of 2021, the sports leaders of some of the most influential clubs in Europe, led by the presidents of Real Madrid and FC Barcelona, Florentino Pérez and Joan Laporta, announced the European Super League project. This international competition threatened to rival the well-known UEFA Champions League and disrupt the rigid institutional football system.

A week before the UEFA Champions League 2024 final, and with Real Madrid—now champion—and its president once again in the spotlight, the debate on the Super League reemerged with the Judgement of the Commercial Court No. 17 of Madrid (Judgement No. 69/2024, dated May 24: the ‘Judgement’) after the hearing held on March 14, 2024. Before analysing the Judgement, it is worth briefly mentioning the background of the matter and the controversy it has unleashed from a legal standpoint.

The proceedings began on April 18, 2021, with the filing of the action along with a request for protective measures to halt the Super League initiative before the commercial courts of Madrid by EUROPEAN SUPERLEAGUE COMPANY, S.L. (ESLC), domiciled in Madrid. Protective measures were ultimately not accepted by the Court. The action was filed on the same day that the ‘founding’ clubs issued a joint press release announcing the official project of the new competition. The project received a mixed response from across Europe, with the objection of public figures such as Boris Johnson and Emmanuel Macron, who recently reaffirmed his opposition to the project. The Spanish Prime Minister himself, Pedro Sánchez¹The article is only available in Spanish., also took a stand against the initiative.

Interestingly, the analysis of the potential anticompetitive nature of the conduct, and the abuse of dominant position by UEFA and FIFA is not carried out by a competition authority (for instance, the European Commission) but by a commercial law judge who directly applies European Union Law without the need for a prior declaration (follow-on) from the competition authorities.

Not surprisingly, UEFA and La Liga had challenged the international jurisdiction and other subsidiary jurisdictional pleas in order to avoid litigating in Madrid. The Court dismissed the jurisdiction challenge on 21 February 2022.

However, the matter’s reach extended beyond the Spanish capital. The Commercial Court No. 17 of Madrid suspended the proceedings and referred a request for a preliminary ruling to the CJEU (Case C-333/21 European Superleague Company), to which it raised the compatibility of the prior authorization requirements by UEFA and FIFA as set out in their statutes and regulations with Articles 101 and 102 TFEU.

The Opinion of Advocate General Anastasios Rantos, delivered on 15 December, 2022, established the compatibility of the contested articles of the Statutes with European Union law to the extent that the restrictive effects arising from such a scheme are inherent in and proportionate for achieving the legitimate objectives pursued & associated with the specific nature of the sport.

The CJEU Judgement was handed down on 21 December, 2023 (ECLI:EU:2023:1011). The judges in this case discuss whether FIFA’s and UEFA’s restrictive measures are inherent and proportionate:

‘Article 102 TFEU must be interpreted as meaning that the adoption and implementation ofrules by associationswhich are responsible for football at world and European levels andwhich pursue in parallel various economic activities related to the organisation of competitions,making subject to their prior approval the setting up, on European Union territory, of a new interclub football competition by a third-party undertaking, and controlling the participation of professional football clubs and players in such a competition, on pain of sanctions, where there is no framework for those various powers providing for substantive criteria and detailed procedural rules suitable for ensuring that they are transparent, objective, non-discriminatory and proportionate, constitutes abuse of a dominant position.

Article 101(1) TFEU must be interpreted as meaning that the adoption and implementation, directly or through their member national football associations, of rules […] constitutes a decision by an association of undertakings having as its object the prevention of competition.’

Thus, the baseline for the 70-page judgement of Mrs. Sofía Gil García of the Court of First Instance No. 17 (challenged by UEFA and La Liga) was to consider the conduct  anticompetitive, which will also be the initial point of consideration for the Appeal Court of Madrid (Section 32) in the appeal case.

2. Discussion and legal context

2.1 Legal framework: contested regulation

The Judgement defines the relevant market as the organisation and marketing of international football club competitions at the European level.

Among the aforementioned declaratory actions, the one alleging the incompatibility of the defendants’ internal rules with articles 101 and 102 stands out. Specifically, it refers to articles 22, 67, 68, 70, 71, 72, and 73 of the FIFA Statutes, article 6²‘1. International Matches may only be authorised by FIFA, a Confederation or a Member in accordance with these regulations.
2. All International Matches must be authorised by the Members to which the participating teams belong and by the Member on whose territory the match is to be played…’. of the FIFA Regulations Governing International Matches, and articles 49³‘1. UEFA shall have the sole jurisdiction to organise or abolish international competitions in Europe in which Member Associations and/or their clubs participate. FIFA competitions shall not be affected by this provision. […]
3. International matches, competitions or tournaments which are not organised by UEFA but are played on UEFA’s territory shall require the prior approval of FIFA and/or UEFA and/or the relevant Member Associations in accordance with the FIFA Regulations Governing International Matches and any additional implementing rules adopted by the UEFA Executive Committee’. and 51⁴‘No combinations or alliances between … clubs affiliated, directly or indirectly, to different UEFA Member Associations may be formed without the permission of UEFA’. of the UEFA Statutes.

2.2 Prior authorization and ‘dual nature’ of the Defendants

The Judgement does not focus on the fact that FIFA and UEFA hold a monopoly in the market for the authorization and organization of international competitions, which is indisputable evidence. Rather, it highlights the absence of a regulated, controlled, and standardized authorization procedure that leads to the discretionary and arbitrary exercise of their authorization powers.

Although there is a requirement for prior authorization of a competition, there is no procedure in place, nor material and evaluative criteria on which to base the granting of authorization. The Judgement sets out the requirements that such a procedure should have (of which UEFA and FIFA will have to take note):

‘In any procedure, deadlines, notifications, publication, opposition, complement or correction procedures, among many other possible procedures, are specified. In any case, a procedure is an ordered set of formalities that must be fulfilled successively and whose fulfillment would generate the obtaining of an authorization. Or its denial, and in that case the procedure would continue for the purpose of discussing its compliance or assessment (p. 29)⁵The Judgement is only available in Spanish. For this post, translations of various sections of the Judgement were provided by the authors.’.

Attention is also paid to the appeal procedure after the initial refusal. The verification of the authorization is subject to the ‘jurisdiction’ of the CAS (Court of Arbitration for Sport). The Judgement notes that beyond the purely sporting nature of the issues on which the CAS may rule, in economic transactions UEFA acts as an undertaking (pp. 40-42). Therefore, ignoring the commercial nature of its decisions makes the procedure biased. The conclusion is that UEFA’s decisions are not subject to an objective and independent judicial review. The Judgement makes a very clear statement on this matter:

‘From an economic and legal point of view, UEFA’s decisions would be shielded, they are not subject to appeal; and it should not be up to a sports arbitration tribunal to judge decisions of an economic nature, which affect the market’ (p. 34).

‘It is not possible to hide behind the sporting nature of their activity to act arbitrarily as entrepreneurs in the market’ (p. 42).

In essence, the Judgement acknowledges UEFA’s dual role as both regulator and manager of international sporting competitions, and the dual economic and sporting nature of its decisions.

The Judgement declares that UEFA and FIFA hold a dominant position on the relevant market and that they have imposed anticompetitive conditions, considered as restrictions by object, consisting of a set of authorization and sanctioning rules that have as their object the prevention and hindering of competition⁶This is based on the paragraphs and case law of the CJEU, cited in paragraphs 119 and 178 of the Judgement of the CJEU that resolves the question referred for a preliminary ruling..

2.3. Exemption under Art. 101(3) TFEU

Although the Judgement does not grant UEFA the exemption set out in the third paragraph of Article 101 TFEU, it is worth briefly studying it, as the Judgement recognizes the argumentative effort made by UEFA (and, more specifically, by its legal representatives). For the exemption from the prohibition of agreements or practices that prevent and restrict competition to operate, there must be four cumulative requirements: (1) contributing to the distribution of services or contributing to promoting economic progress, (2) allowing consumers a fair share of the benefit, (3) not imposing restrictions which are not indispensable, and (4) not affording undertakings the possibility of eliminating competition.

The Judgement finds that none of these requirements has been substantiated.

1. With regard to the increase in efficiency, the Spanish Football Federation (RFEF – Real Federación Española de Fútbol) has stated that the current system is efficient in that it ‘guarantees the homogeneity and coordination of all competitions within a global calendar’, thus, further guaranteeing sporting results⁷Vid. par. 143 of ECJ Judgement dated 21 December 2023 (Case C 333/21 European SuperLeague Company– ECLI:EU:C:2023:1011) (merits) and equal opportunities for clubs. The Judgement considers the grounds admissible but insufficient. ‘The increase in efficiency cannot be limited to the perspective of the sport activity’ (p. 50), nor can it be presumed that one derives from the other. The Judgement is aware of the significant economic impact that the Super League could have on the current sports model. However, this does not justify maintaining the monopoly.
2. Concerning the reserve of a fair share of the benefits to users, UEFA and FIFA share the profits, and the clubs are recognized as participating in such profits. However, the precise terms of the profit distribution remain unclear, so it is not possible to assess whether this participation is equitable.
3. Concerning the condition of not imposing restrictions that are not indispensable to achieve efficiency gains, UEFA states that all restrictive measures are indispensable and that no alternative measures exist to establish an authorization system. Again, the Judgement states that ‘it is possible to design a new authorization system; or to complement and adapt the existing one. Since the authorization system is not in itself restrictive, but it is the absence of regulation that determines the restriction’ (p.53).
4. Regarding the non-elimination of effective competition, this is the condition where the defendants had more trouble, as they stated that there was no alternative for the elimination of competition in the case of the Super League. UEFA provides examples of other authorized competitions to demonstrate that alternative competitions can be organized and approved. According to the defendants, competitions such as the ‘Royal League’, the ‘Baltic League’ and the ‘Champions Cup’ prove that the internal regulations of FIFA and UEFA do not restrict competition. The Judgement explains that ‘it is unacceptable to equate authorizing specific local competitions with the existence of full and effective competition’ (p. 49). The Judgement notes that the occasional authorization of such competitions is anecdotal, and that no periodic competition competes with the UEFA Champions League.

3. Ruling

3.1 Abuse of dominant position

The Judgement finds that UEFA and FIFA have abused their dominant position in violation of Art. 102 TFEU by allowing themselves the discretion to prohibit participation in alternative competitions when their regulations lack guarantees and objective criteria. The regulations should provide more guarantees. This argument was upheld in part, as the claimant’s plea referred to a potential conflict of interest in admitting rival competitions. The Judgement further declares the quoted articles of the FIFA and UEFA Statutes and Regulations incompatible with Art. 102 TFEU. With regard to the assignment of exploitation rights for competitions authorized by FIFA and UEFA, it is not considered that there is an abuse of dominance, as their regulations apply only to the assignment of competitions they organized ‘under their jurisdiction’.

3.2 Infringement of Art. 101 TFEU

The judgement declares that UEFA and FIFA prevent free market competition by imposing unjustified restrictions on the Super League. Thus, the described articles of the Statutes and Regulations of FIFA and UEFA are incompatible with Art. 101 TFEU and are null and void.

3.3 Injunction (cessation action)

FIFA and UEFA have to cease their anticompetitive conduct and to refrain from any future repetition. In addition to the cessation, the ESLC’s plea included the request for a series of specific measures relating to the Super League and the non-hindering of its implementation and development. However, the Judgement points out that a modification of the statutory regulations has already occurred and that the initial Super League project has been abandoned and discarded. Therefore, it is not necessary to make an abstract prohibition or restriction in the future of any other project. It is not the object of the procedure to authorize any competition in general terms, but to judge the framework for ‘channelling a system of free competition in the organization of soccer competitions’ (p. 68). This argument was upheld in part.

3.4 Action for removal of effects

FIFA and UEFA must remove all the anticompetitive actions’ effects immediately. As in the previous section, the petition was accompanied by a series of specific measures referring to the Super League, which have been dismissed for the reasons previously outlined. This argument was upheld in part.

4. Action for damages

One must not lose sight that this is, after all, a competition law case, where an infringement of articles 101 and 102 TFEU can result in a claim for damages. The Damages Directive (2014/104/EU) even establishes a presumption of harm for infringements of competition law in art. 17.2. Then, ESLC, as well as the other clubs, would be entitled to claim against FIFA and UEFA the potential harm caused by the anticompetitive conduct.

Although the matter of the Super League is still under judicial review, the higher Spanish Courts will be bound by the CJEU preliminary ruling, which clearly established that the defendants’ conduct was incompatible with Articles 101 and 102 TFEU. The possibility for these Courts to interpret the conducts differently from the Judgement will surely be limited.

Once a final judgement is handed down, predictably in a few years, ESLC and other clubs could file follow-on actions for damages against UEFA and FIFA, to seek redress and compensation for a highly profitable competition that was prevented from being realized. In such cases, and despite the presumption, ESLC, or even the clubs, will need to prove and quantify the damages.

There have been previous cases in sports where the anticompetitive conduct of a sports association or regulator has resulted in damages being awarded. Recently, the ACB (Asociación de Clubes de Baloncesto), in charge of the 1^st division of Spanish Men’s Basketball, was fined 200.000 € for imposing disproportionate and discriminatory conditions on its associates (after a partial upholding by the Supreme Court Judgement dated 26 June 2023 – ECLI:ES:TS:2023:2882⁸The Judgement is only available in Spanish.). Also, a basketball club from Andorra filed an action for damages that resulted in being awarded €1.8 million (Judgement of the Commercial Court of Barcelona No. 10 dated 7 December 2023 – ECLI:ES:JMB:2023:5698⁹The Judgement is only available in Spanish.).

By Alejandro Martínez Luna