Last week, the European Commission sent a formal charge sheet, a so-called Statement of Objections, to the International Skating Union (ISU) alleging that its eligibility rules are in breach of EU competition law. According to these rules, athletes face penalties up to a lifetime ban from their sport if they participate in international speed skating events not approved by the federation. This prevents alternative event organisers from staging speed skating events because they are unable to attract top athletes. The Commission’s preliminary conclusions bring to a head a year-long investigation following a complaint by two Dutch professional speed skaters, Mark Tuitert and Niels Kerstholt.
After some politically difficult uphill antitrust battles around the 2000s against FIFA and FIA, the international motorsports federation, the Commission has refrained, for fifteen years, from intervening in regulatory aspects of sports. Its decision to actively pursue the speed skating case, concerning a relatively small sport, therefore comes as a surprise to many.
The importance of this case, however, extends well beyond speed skating and it is a welcome reminder that all of us, and not only disadvantaged competing undertakings, can look for the protection of the EU competition rules.
… And Justice for All
EU competition law is an essential tool to safeguard the well-functioning of the Single Market. The effective enforcement of the competition rules in the areas of antitrust (cartels or abuse of market power), mergers, and State aid ultimately benefits consumers – for instance in terms of lower prices, services and products of better quality, and wider choice. Yet the fruits of the decisional practice of competition agencies often go undetected by the general public.
Most of us have heard about the European Commission imposing colossal fines on companies like Microsoft or, more recently, recovering unpaid taxes from Apple or Starbucks. But do we also realise that competition policy is not only about giving pinpricks to the bank balance of enormous corporations?
The speed skating case offers a tangible example of how competition policy, and by extension the EU project, directly affects people’s well-being. I remember how in March 2014, I read a news item in Dutch media about an ISU communication reminding all its members that participation in an out-of-season speed skating event organized by a private entity would be penalised with the indefinite loss of access to ISU competitions (such as the World or European Championships) or the Olympic Games. Admittedly, as a competition law scholar I frequently identify potential competition law violations in everyday life. But here I was especially outraged. Seemingly without any valid justification, athletes were being denied a much-needed opportunity to earn some additional prize money.
I contacted several people that publicly spoke out against the ISU’s practices, initially with the sole intent to write a blog post about it. That is how I came in touch with Mark and Niels. Their stories inspired me to suggest a bolder move. Together with my colleague Antoine Duval (T.M.C. Asser Instituut) I drafted a complaint that Mark and Niels filed with the European Commission in June 2014. We realised that our complaint fell outside the Commission’s enforcement priorities. But Mark and Niels did not stand alone. Firstly, the European Elite Athletes Association expressed its full support and launched a #ChanceToCompete social media campaign built around an open letter signed by top European speed skaters. Hundreds of other professional athletes tweeted to EU Commissioner for Competition Vestager asking her to take action. The Commissioner responded that she would look into the matter. Secondly, the European Parliament, on the initiative of Dutch MEP Sophie in ‘t Veld, urged the Commission to take the complaint seriously. In October 2015, the Commission announced the opening of a formal investigation.
So yes, it took effort to drive the message home that competition law enforcement at the EU level was needed. The Commission’s decision to deal with the complaint is nonetheless praiseworthy. It showcases that it does not only defend the interests of businesses, but also those of individuals and workers. And it sends a clear signal that operators in a non-priority sector of relatively limited economic importance cannot do what they want without fear of attracting the Commission’s attention. “Are we to believe that international sports federations are exempted from the (competition) rules? Athletes, workers, citizens are perhaps less important than big corporations?”, Mark and Niels asked in their open letter to Commissioner Vestager. The answer is a resounding “no".
The precedent-setting value of the speed skating investigation
The Commission’s allegations that the ISU eligibility rules violate the European competition rules does not prejudice the outcome of the investigation. The ISU can now respond to those objections. If the provisional conclusion that “the penalties the ISU imposes on skaters … are not aimed at preserving high standards in sport but rather serve to maintain the ISU's control over speed skating” is confirmed, however, it could have an impact far beyond the sport of speed skating.
In numerous other sports, athletes and officials can also be punished for the participation in events not authorised by their international federations. Sanctions range from fines, periods of ineligibility of several years (e.g. swimming, equestrian sports, volleyball, cricket, hockey, sailing, and netball) up to lifetime bans (e.g. boxing and beach volleyball). The mere threat of drastic sanctions, combined with the general lack of sufficient procedural safeguards and objective criteria underpinning the need for such restrictions, enables federations to abuse their regulatory power and block the organisation of events that could compete with the events they organise and promote. This clearly raises concerns about a conflict of interest between a federation’s role as the regulator of its sport and its commercial interests in preserving its monopoly from the threat of competition.
The Commission's resolution of this “smaller” case will thus set an important precedent that hopefully will enable thousands of European athletes in a multitude of sports to benefit from a fair competitive environment.
Importantly, this intervention does not – and should not – result in a deregulated competitive ‘free-for-all’. The only constraint that EU competition law imposes is that restrictive sporting rules must be genuinely designed to achieve legitimate objectives in the interest of sport. This necessitates a transparent and non-discriminatory procedure and objective criteria, such as ensuring the safe conduct of events. If fundamental sporting imperatives are the real concern of sports federations, giving up the possibility to put private interests over public interests is not an unreasonable demand.
Disclaimer: the author acts as the legal advisor and representative of the complainants, Mark Tuitert and Niels Kerstholt, in these proceeding.