1 Introduction

The three rulings of 21 December 2023 are Case C-333/21 European Superleague Company SL v FIFA, UEFA, Case C-680/21 UL, SA Royal Antwerp Football Club v URBSFA, UEFA, and Case C-124/21 P International Skating Union v Commission, hereafter ESL, Royal Antwerp and ISU. They demand a higher level of scrutiny under EU law of practices of governing bodies in sports than did Advocate General Rantos in his startling Opinion in ESL delivered in December 2022. Legally, that change in tone is most obvious in (i) the treatment of Article 165 TFEU, which is more restrained than Rantos’s claim that it ‘constitutionalised’ the European Sports Model and accordingly granted a high level of protection to the sporting status quo and (ii) the concern to emphasise that the Wouters/ Meca-Medina formula does not apply where conduct has as its object the prevention, restriction or distortion of competition or by its very nature infringes Article 102 TFEU. The Court, it will be explained, has chosen to reject the approach proposed by Rantos, and has instead pursued an approach which is largely – though not entirely – consistent with its own previous practice in the application of EU internal market law to the practices of governing bodies in sport. Conversely – (iii) - the Court’s new view that ‘certain specific rules which were adopted solely on non-economic grounds and which relate to questions of interest solely to sport per se must be regarded as being extraneous to any economic activity’, and so untouched by EU law, seems by contrast helpful to governing bodies wishing to assert their autonomy.

I consider each of these three issues separately and in turn.

2 Article 165 TFEU

Article 165 TFEU has been moved to the sidelines, but the Court does not intend to set aside its willingness to consider the particular context of sport in its interpretation of EU internal market law. In both ESL and Royal Antwerp the Court, following a restrained approach much closer to that of A.G. Szpunar in Royal Antwerp than A.G. Rantos in ESL, treats Article 165 as a legal basis authorising the EU to exercise the defined supporting competence in the field covered, and rules that its location in Part Three of the TFEU, devoted to ‘Union policies and internal actions’, rather than in Part One, which contains provisions of principle including ‘provisions having general application’, means that Article 165 ‘is not a cross-cutting provision having general application’.Footnote 1 This means that the objectives listed in and action taken pursuant to Article 165 need not be integrated or taken into account in a binding manner in the application of the Treaty provisions on the internal market which the Court is asked to address. Moreover – and entirely unsurprisingly – the Court states that Article 165 TFEU is not a special rule exempting sport from primary EU law. And once the section of the rulings in ESL and Royal Antwerp which addresses Article 165 is concluded the Court ignores it in the subsequent extended legal analysis, save only for a tangential reference in Royal Antwerp.Footnote 2

The Court’s froideur towards Article 165 is doubtless entirely calculated. The Court wants to advertise that it is not tempted to endorse Advocate General Rantos’s wildly adventurous Opinion in ESL delivered in December 2022, which claimed that Article 165 ‘constitutionalised’ the European Sports Model and that accordingly EU law granted a high level of protection to the sporting status quo. Rantos was criticised at the time as going (far) too far,Footnote 3 and now one year later the Court’s rulings of 21 December 2023 ignore Mr Rantos’s Opinion and prefer a much more limited reading of the impact of Article 165 TFEU.

However, this does not mean that the Court shuts out sport’s special characteristics from its analysis. Quite the reverse! But it chooses to root readiness to accommodate such concerns in the interpretation of internal market law in its own accumulated case law, not according to the direction provided by Article 165.

The Court accepts that sporting activity carries considerable social and educational importance, a proposition ‘reflected in Article 165’ but sourced in its own case law: Bosman, C-415/93 and TopFit and Biffi, C-22/18.Footnote 4 Sporting activity has specific characteristics, according to Lehtonen and Castors Braine, C-176/96).Footnote 5 The sport of football is ‘of considerable social and cultural importance in the European Union’, Bosman, C-415/93, Olympique Lyonnais, C-325/08.Footnote 6

These features may be taken into account in the application of the Treaty provisions on the internal market. Governing body rules must be assessed in the context in which they are to be implemented, including assessment of the nature, organisation or functioning of the sport concerned and, more specifically, how professionalised it is, the manner in which it is practised, the manner of interaction between the various participating stakeholders and the role played by the structures and bodies responsible for it at all levels.Footnote 7

In 2010 the Grand Chamber in Olivier Bernard interpreted free movement law in the light ‘of the specific characteristics of sport in general, and football in particular, and of their social and educational function’, noting that the relevance of those factors to the legal analysis is ‘corroborated’ by their mention in Article 165(1).Footnote 8 Now, over 13 years later, a differently constituted Grand Chamber wishes to assert even more aggressively the superiority of its case law over the terms of Article 165. I think the Court is driven by concern not to appear to endorse A.G. Rantos’s extravagant claims about the transformative effect of Article 165, and perhaps too it intends an implied rebuke to the ambiguity and caution with which Article 165 is drafted.Footnote 9 But the practical effect is minimal. Article 165 is downplayed, but the relevance of sport’s special features to the interpretation of internal market law, nurtured by the Court ever since Walrave and Koch in 1974, is not altered (Case 36/74). This does not tell us anything concrete about exactly how sport’s special features shall affect that interpretation. That needs a case-by-case examination. But the Court’s novel treatment of Article 165 does not transform the structure of EU sports law: it simply directs us to the Court’s own case law, rather than Article 165, as the main source of the notion that sport is (sometimes) ‘special’.

3 Meca-Medina

The diminished role allowed by the Court on 21 December to the Wouters-MecaMedina formula is also surprising and not easy to explain but, similarly to the place of Article 165, the Court’s change of direction should not be exaggerated. There is only a modest reduction in the scope to claim sporting specificity.

Wouters and Others (C-309/99), Meca-Medina and Majcen v Commission (C-519/04 P) and Ordem dos Técnicos Oficiais de Contas (C-1/12) stand for the proposition that the compatibility of practices with EU competition law cannot be assessed in the abstract. Not every agreement between undertakings which restricts the freedom of action of one or more of the parties necessarily falls within the prohibition laid down in Article 101(1) TFEU. Account must be taken of the overall context in which the decision was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives and are proportionate to them. So in Meca-Medina, in which this approach was first employed in the application of EU competition law to the practices of a governing body in sport, it was concluded that the sport of swimming’s anti-doping controls and sanctions did not fall within the scope of Article 101(1).

The point is that if a practice escapes the reach of Article 101(1) according to this formula, there is no need to assess whether it is a restriction of competition by object or by effect. It is not a restriction of competition within the meaning of Article 101(1) at all. This is now changed.

Conduct which ‘by its very nature infringes Article 102 TFEU’ cannot benefit from the Wouters-Meca-Medina formula.Footnote 10 Nor does it apply in situations involving conduct which, far from merely having the inherent effect of restricting competition, ‘reveals a degree of harm in relation to that competition that justifies a finding that it has as its very “object” the prevention, restriction or distortion of competition’.Footnote 11

This is new. It means that the first stage of the analysis is no longer whether the Meca Medina test is met, but rather whether conduct by its very nature infringes Article 102 or has as its object the prevention, restriction or distortion of competition. Only if it does not does Meca-Medina apply as a route for a governing body to show its practices to be necessary to achieve legitimate objectives and so place its practices beyond the scope of Article 101(1) and Article 102. If it does, only Article 101(3) may save the practice, and that requires a more stringent approach than Meca-Medina (as is explicitly pointed out in ESL para. 189, Royal Antwerp para. 118). Presumably also, if it does, only meeting the test of objective justification saves it from condemnation under Article 102 – that test is also more stringent (more focused on economics) than Meca-Medina.

Quite why the Court has decided to reduce the reach of Meca-Medina is not clear. Its own explanation is unconvincing. ESL para 185 claims that it is ‘already implicitly but necessarily apparent from the Court’s case-law’ that conduct which by its very nature infringes Article 102 may not benefit from the Meca-Medina approach – and it declares ‘see, to that effect, judgment of 1 July 2008, MOTOE, C-49/07, EU:C:2008:376, paragraph 53’. This is profoundly unpersuasive. Use of the word ‘implicitly’ seems to me to be a helpful reveal. I take it here to mean the Court is trying to re-write its own history and re-interpret what it previously ruled. The Court is changing its course yet, by loftily (but misleadingly) claiming that its new twist was somehow embedded in past dicta, it wishes to pretend that it has not changed course. This is unworthy of it.

But why really has the Court reduced the scope of Meca-Medina? One may speculate that at least some members of the Court, probably those specialising in competition law, fear Wouters-Meca-Medina was undermining the pure stream of Article 101(1)/(3) - that it offered an unduly wide and open-ended means to disapply Article 101. It is true that the Court’s approach to Article 101(1) in the case law on ancillary restraints, regulatory ancillarity, rule of reason (call it what you will!)Footnote 12 is ad hoc and lacking coherence. Now it is reduced in scope, and, as far as Article 101 is concerned, the more structured Article 101(3) exemption applies to object restrictions rather than the looser Meca-Medina test. In this sense competition law orthodoxy prevails over sporting specificity – and that, I suppose, is what motivates the Court to make the change on 21 December.

There will doubtless now be awkward (though, in the case law, rather familiar) arguments about just when an object restriction, which disables Meca-Medina, is found. ESL, on the facts at issue before the Court, involves a restriction by object.Footnote 13ISU follows the same path. ‘[S]uch rules must be regarded … as having as their object the restriction of competition [because] they confer on the entity that adopted them and that is empowered to implement them the power to authorise, control and set the conditions of access to the relevant market for any potentially competing undertaking, and to determine both the degree of competition that may exist on that market and the conditions in which that potential competition may be exercised’.Footnote 14 At the heart of the rulings – and the core reason why the governing bodies were held to have violated EU law – was the absence from the prior approval procedures of a framework providing for substantive criteria and detailed procedural rules suitable for ensuring that they are transparent, objective, precise, non-discriminatory and proportionate. Royal Antwerp is less decisive. Paragraphs 108–111 of the ruling sketch what is relevant to finding whether what is at stake is a restriction by object, and the extent to which the home-grown rules make interpenetration of national markets more difficult is of special significance, but the Court leaves the ultimate decision to the national court.

However, earlier in the judgment in ESL the Court had concluded that it is potentially lawful to act to suppress a competition not based on access via sporting merit - subject always to showing transparent, objective, non-discriminatory (etc.) criteria. ESL para 143 concerns Article 102. It tells us participation in and conduct of competitions is based on sporting merit, which can only be guaranteed if all the teams involved compete under homogeneous regulatory and technical conditions, ensuring a certain equality of opportunity. Paragraph 144 tells us it is legitimate to make the organisation and conduct of international professional football competitions subject to common rules, and, more broadly, to promote competitions based on equal opportunities and merit. Compliance can legitimately be ensured by a scheme of prior authorisation and by accompanying sanctions in the case of violation of the rules. The same phrase appears at ISU para 132: the holding of sporting competitions based on equality of opportunity and merit.

ESL para 175 addresses Article 101. It begins by stating that ‘it follows from paragraphs 142 to 149’ – that is, the Court explicitly wants to align Article 101 to Article 102 on this point - that the specific nature of international football competitions and the real conditions of the structure and functioning of the market for the organisation and marketing of those competitions on European Union territory lend credence to the idea that it is legitimate to have rules on prior approval, though, a consistent theme in the 21 December rulings, they need to be objective, transparent etc. Paragraph 176 states that rules on prior authorisation may be motivated by the pursuit of certain legitimate objectives, such as that of ensuring respect for the principles, values and rules of the game which underpin professional football. Paragraph 253 contains the same approach to Article 56 TFEU on the free movement of services.

So, provided always that the process meets the requirements of objectivity, transparency etc., the Court appears to accept that a prior authorisation system may be used to refuse a competition which is not based on sporting merit. So, most obviously, a ‘no’ to closed leagues (and penalties on participants) appears to be a legitimate exercise of the gatekeeping function.

Presumably, then, such a practice is not conduct which ‘by its very nature infringes Article 102 TFEU’ nor is it conduct which has as its very object the prevention, restriction or distortion of competition. Instead the object of requiring that new competitions be open and based on sporting merit is not to restrict competition but rather ‘the pursuit of legitimate objectives, such as ensuring observance of the principles, values and rules of the game underpinning professional football’,Footnote 15 just as in Meca-Medina itself the Court found an inherent effect of restricting potential competition between athletes as a result of anti-doping but placed the matter outwith Article 101(1) because the rules had the objective ‘to safeguard the fairness, integrity and objectivity of the conduct of competitive sport, ensure equal opportunities for athletes, protect their health and uphold the ethical values at the heart of sport, including merit’ (as explained, citing Meca-Medina and Majcen v Commission, C-519/04 P, in ESL para 184, Royal Antwerp para 114, ISU para 112).

This is clearly important, and it puts a shape on the legitimate objectives which UEFA may pursue in crafting pre-authorisation criteria. The Court in ESL is not opening the door to a free-for-all. Certain types of sporting competition are, it seems, legitimately suppressed by UEFA as gatekeeper. In this sense the judgments put a shape on the European Sports Model. It may as a matter of law be defended: UEFA may legitimately act against ‘closed’ competitions and insist instead that only competitions which are merit-based may be approved. The rulings of 21 December are easily read as a brutal rebuke to A. G. Rantos. His Opinion of December 2022 in ESL claimed that Article 165 ‘constitutionalised’ the European Sports Model: the Court prefers to go nowhere near such exuberant language. But on this particular point – the distaste for competitions which are not based on sporting merit – the Court echoes Mr Rantos in its willingness to interpret EU internal market law in a way that gives constitutionalised (i.e. recognised in primary law) protection to open competitions. So UEFA is entitled to act as a gatekeeper charged with the responsibility to defend a model based on sporting merit.

The lesson is that how one frames the challenged rule matters a lot. Those seeking to escape subjection to a governing body’s rules will want to treat them as conduct which by its very nature infringes Article 102 TFEU or as conduct which has as its very object the prevention, restriction or distortion of competition. The governing body will instead wish to argue that its rules pursue objectives that are necessary to achieve legitimate objectives in the organisation of sport of a type recognised by the Court.

This framing will doubtless now take centre stage in litigation pending before the Court.

Consider the transfer system, famously amended after the Court’s adverse ruling in Bosman (Case C-415/93). Its compatibility with EU law is once again before the Court (Case C-650/22 FIFA v BZ). Should the system be treated as designed to restrict opportunities to obtain employment, as the footballer bringing the legal challenge argues, or should it instead be understood as a means to maintain contractual stability and the integrity and proper functioning of sporting competitions, which, according to FIFA, are legitimate objectives capable of justifying potential interference with the Treaty rules on free movement and competition? This, after 21 December, becomes a crucial question. The answer chosen dictates the breadth of the justification which the governing body may rely on in defence of its practices.

This is not the only test to come. The Court has been asked to consider the FFAR, FIFA’s regulation of agents,Footnote 16 which introduce certain standards of conduct and include regulation of prices charged by agents. In 2023 in PROFAA v FIFA the CAS used the Meca-Medina analysis and found the rules compatible with EU law.Footnote 17 Presumably now the agents, challenging the FIFA rules, will argue that they are restrictions by object and therefore incapable of being defended via Meca-Medina. But this is not a question that is decisively answered by the rulings of 21 December 2023. If one understands the FFAR as a cartel arranged between FIFA, national associations and clubs, and so as a horizontal restriction of competition, then it is plausibly a restriction of competition by object. But that is not the only way to understand the FFAR, and it is not the one advanced by FIFA. Instead FIFA portrays the FFAR as regulations designed to improve the functioning of the market for the supply of agents’ services. They regulate the terms on which agents’ services are offered in order to address market failures (such as intransparency and asymmetry of economic power) and in fact they are not a (horizontal) restriction of competition at all but rather (vertical) market regulation by a private party (FIFA) to which Meca-Medina can be applied. FIFA, after all, has no economic stake in this market – its object is to address problems within it (such as agents’ incentives to promote player transfer to the detriment of contractual stability), which have a direct and substantial impact on the integrity of the sport.

That this inquiry is required flows from the Court’s rulings of 21 December. We need to classify the type of practices we are dealing with – do they by their very nature infringe Article 102 or have as their object the prevention, restriction or distortion of competition – before we can determine the breadth of justification which may be advanced in their support.

In making this classification it should be significant that the Court’s case law makes it clear that one should be slow to find a restriction to be by object. The concept must be interpreted strictly, because finding an object restriction entails no assessment of a practice’s effects in the application of Article 101(1). This is recognised in ESL paras 161-2, Royal Antwerp paras 88–89, ISU paras 101-2. So, it is relatively rare to find a restriction by object, and therefore it is relatively rare that Meca-Medina is not available for a governing body to rely on in defending its practices. I suspect, then, that the rulings of 21 December 2023 will come to be seen as atypical in their factual background. The complete absence of due process in the prior approval schemes of UEFA and the ISU, and the consequent reek of suspicion that practice favoured the governing body’s commercial interests as event organisers, led easily to a finding that what was at stake was a restriction of competition by object. Most regulatory practices of governing bodies would, one would hope, not be contaminated by such obvious conflicts of interest, and so most regulatory practices of governing bodies would not be treated as restrictions of competition by object (nor as by their very nature infringements of Article 102). This, I think, would cover anti-doping, transfers, Financial Fair Play, regulation of agents, and so on. But there is plainly room for debate. I would reach the conclusion that most practices of governing bodies are not restrictions of competition by object, nor by their very nature infringements of Article 102, with a great deal more confidence had the Court confined its distaste for Meca-Medina to cases involving ‘gatekeeping’. But it was not so cautious. Royal Antwerp does not exclude that even the ‘home-grown’ rules could constitute a restriction by object, albeit that the national court must decide that.Footnote 18 The scope of the category of restrictions by object (as well as that of practices which by their very nature infringe Article 102) is going to need further judicial elucidation and, given the incentives involved for those wishing to attack governing body rules, it will doubtless get it.

If one does place governing body practices outside the category of restrictions by object, that does not mean that such regulatory choices would inevitably escape condemnation when reviewed under EU law, but it means that they would be treated as motivated by a governing body’s perception of the need to protect the integrity of their sport (or their profession more widely) and not as motivated by anti-competitive objects. In consequence the wider sports-sensitive field of justification familiar from Meca-Medina would provide the basis for inquiry into whether they comply with EU competition law, not the narrower Article 101(3) test (nor the similarly attenuated objective justification test under Article 102).

As the judgments of 21 December make clear, there is still plenty of room for sport-specific arguments to be advanced in the interpretation of EU internal market law. The defence of equal opportunities and sporting merit as organisational foundations is fully recognised by the Court.Footnote 19 Moreover, sporting activity carries considerable social and educational importance;Footnote 20 sporting activity has specific characteristics;Footnote 21 the sport of football is ‘of considerable social and cultural importance in the European Union’.Footnote 22 The Court’s adjustment of Meca-Medina does not transform the structure of EU sports law: it makes a small reduction in the scope of the principle established by the Court in that ruling, but where it applies it still allows a wide range of arguments to be advanced about the necessity to maintain particular arrangements in sport in order to achieve legitimate objectives.

So this is a change to EU sports law. Meca-Medina has been shrunk, and applies only to conduct which by its very nature does not infringe Article 102 and to practices which do not have as their object the prevention, restriction or distortion of competition. But, if I am right that most governing practices are not of this type (a view that is admittedly sure to be subject to judicial interrogation sooner rather than later), I doubt the effect will be significant.

4 The purely sporting rule

The third point on which, after 21 December, EU sports lawyers have to re-think what we thought we knew concerns the purely sporting rule. To which I can only respond: oh no, you’re joking, not this old rubbish again!

The Court claims that ‘certain specific rules which were adopted solely on non-economic grounds and which relate to questions of interest solely to sport per se must be regarded as being extraneous to any economic activity’, and so untouched by EU law. It mentions as examples rules on the exclusion of foreign players from the composition of teams participating in competitions between teams representing their country (Walrave and Koch, 36/74, and Bosman, C-415/93) or the determination of ranking criteria used to select the athletes participating individually in competitions ( Deliège, C-51/96 and C-191/97).Footnote 23

The Court’s claim is demonstrably false. Such rules are clearly not extraneous to economic activity. Eligibility to play for a country, the bigger the better, has a direct impact on an athlete’s earning capacity, both in wages and in profile likely to attract sponsors and advertisers. The same is true of qualification for international competition. The reason such rules do not fall foul of EU law is not that they are extraneous to economic activity but rather that they are necessary to impose structure on the sport. International representative sport is necessarily based on nationality and/or pre-qualifying requirements. They are – in intent and in effect – both sporting and economic rules. The Court on 21 December 2023 resuscitates a version of its old and equally incorrect identification of ‘purely sporting’ rules which escape the scope of application of EU law, which it had been assumed had been (wisely) abandoned in Meca-Medina, which set aside the CFI’s exclusion of antidoping rules as ‘purely sporting’ and insisted instead that the practices of a governing body, as an undertaking, must be checked against the specific requirements of the Treaty provisions on the internal market.Footnote 24 This promised a case-by-case examination of practices, uncontaminated by false preconceptions about the concept of ‘purely sporting’ rules. But now, as of 21 December, the ‘purely sporting’ rule is back, in a new packaging which the Court has minted freshly for these rulings: ‘certain specific rules which were adopted solely on non-economic grounds and which relate to questions of interest solely to sport per se must be regarded as being extraneous to any economic activity’. The sheeted dead should be left to rest but the Court has chosen to breathe life into a corpse. For this it should not be thanked.

This error does not affect the legal analysis which follows in the three cases. The practices under review are obviously not extraneous to economic activity, as the Court accepts is true of the vast majority of sporting practices,Footnote 25 and so are subject to review pursuant to EU law, albeit that each jurisdictional hurdle in each Treaty provision must be assessed with care. But one fears that governing bodies in sport will in future be tempted to claim their practices are ‘extraneous to economic activity’ in order to escape EU law. It is an intellectual dead end. There are very few such practices, and those mentioned by the Court are not among them. One can only hope that little or nothing is heard again of this new concept of rules ‘extraneous to economic activity’, save only to reject claims that governing body practices fall within it. The core of EU sports law needs to remain focused on the effect of practices, not on some spurious separation between economic and sporting activity.

5 Conclusion

Do the judgments offer the last word on what the special features of sport are? No. Nor do they spell out exactly what is and is not permitted of governing bodies as regulators. And they leave plenty of room for debate about UEFA’s position in particular. There is plenty more to come – before national courts, in the strategies of UEFA and of the elite clubs in the shadow of the judgments, perhaps too from the Commission enforcing the Treaty competition rules. One should not rule out the Court being asked again (and again!) to clarify what is at stake and one should not rule out the possibility of pressure for an EU legislative response, not least because that, rather than ad hoc rulings of the Court, is the most reliable source of systematic and predictable rules.

For UEFA, and in particular for its power to act as a ‘gatekeeper’ through a system of prior approval for new competitions offered by third parties, things have changed a lot,Footnote 26 but that is a separate issue from the matters examined in this paper. For the structure of EU sports law, the rulings of 21 December 2023 change our understanding of Article 165, Meca-Medina and the purely sporting rule, but the substantive change is minimal. EU sports law remains focused on internal market law, and the question whether a practice may be treated as necessary to meet the legitimate objectives of a governing body in sport will and should remain at the heart of the analysis.