Antitrust: International Skating Union’s restrictive penalties on athletes breach EU competition rules
Brussels, 8 December 2017
European Commission – Press release
The European Commission has decided that International Skating Union (ISU) rules imposing severe penalties on athletes participating in speed skating competitions that are not authorised by the ISU are in breach of EU antitrust law. The ISU must now change these rules. Commissioner Margrethe Vestager, in charge of competition policy, said: “International sports federations play an important role in athletes’ careers – they protect their health and safety and the integrity of competitions. However, the severe penalties the International Skating Union imposes on skaters also serve to protect its own commercial interests and prevent others from setting up their own events. The ISU now has to comply with our decision, modify its rules, and open up new opportunities for athletes and competing organisers, to the benefit of all ice skating fans”. The ISU is the sole body recognised by the International Olympic Committee (IOC) to administer the sports of figure skating and speed skating on ice. Its members are national ice skating associations. The ISU and its members organise and generate revenues from speed skating competitions, including from major international competitions such as the Winter Olympic Games, World and European championships. The Commission’s investigation found that: Under the ISU eligibility rules, in place since 1998, speed skaters participating in competitions that are not approved by the ISU face severe penalties up to a lifetime ban from all major international speed skating events. The ISU can impose these penalties at its own discretion, even if the independent competitions pose no risk to legitimate sports objectives, such as the protection of the integrity and proper conduct of sport, or the health and safety of athletes. By imposing such restrictions, the ISU eligibility rules restrict competition and enable the ISU to pursue its own commercial interests to the detriment of athletes and organisers of competing events. In particular, the Commission considers that the ISU eligibility rules restrict the commercial freedom of athletes who are prevented from participating in independent skating events. As a result of the ISU eligibility rules, athletes are not allowed to offer their services to organisers of competing skating events and may be deprived of additional sources of income during their relatively short speed skating careers. The ISU eligibility rules prevent independent organisers from putting together their own speed skating competitions because they are unable to attract top athletes. This has limited the development of alternative and innovative speed skating competitions, and deprived ice-skating fans from following other events. The ISU introduced certain changes to its eligibility rules in June 2016. Despite these, the Commission found that the system of penalties set out by the eligibility rules remains disproportionately punitive and prevents the emergence of independent international speed skating competitions. Therefore, the Commission concluded that the ISU eligibility rules are anticompetitive and breach Article 101 of the Treaty on the Functioning of the European Union (TFEU). Consequences of the decision The Commission decision requires the ISU to stop its illegal conduct within 90 days and to refrain from any measure that has the same or an equivalent object or effect. In order to comply, the ISU can abolish or modify its eligibility rules so that they are based only on legitimate objectives (explicitly excluding the ISU’s own economic interests) and that they are inherent and proportionate to achieve those objectives. In particular, the ISU should not impose or threaten to impose unjustified penalties on athletes who participate in competitions that pose no risk to legitimate sports objectives. If the ISU maintains its rules for the authorisation of third party events, they have to be based on objective, transparent and non-discriminatory criteria and not be intended simply to exclude competing independent event organisers.
While the Commission did not consider it necessary or appropriate to impose a fine in this case, if the ISU fails to comply with the Commission’s decision, it would be liable for non-compliance payments of up to 5% of its average daily worldwide turnover. Background The Commission opened proceedings in relation to the ISU’s eligibility rules on 5 October 2015 following a complaint by two Dutch professional speed skaters, Mark Tuitert and Niels Kerstholt. The Commission sent a Statement of Objections to the ISU on 27 September 2016. Sporting rules set up by sports federations are subject to EU antitrust rules when the body setting the rules, or the companies and persons affected by the rules, are engaged in an economic activity. On the basis of EU Court case law, sporting rules are compatible with EU law if they pursue a legitimate objective and if the restrictions that they create are inherent and proportionate to reaching this objective. This assessment can be performed by national courts, national competition authorities, particularly vis-à-vis national bodies, and by the Commission, especially in the case of practices at international level. Many disputes about sporting rules raise primarily issues related to governance of the sport, i.e. relations between different stakeholders belonging or being closely connected to the structure headed by sports federations. Such disputes can usually be best handled by national courts rather than by the European Commission. The same goes for disputes resulting from the application of sporting rules to individuals, e.g. athletes being sanctioned for breach of relevant anti-doping or match-fixing regulations, which can be handled by relevant arbitration bodies or national courts. Article 101 of the TFEU and Article 53 of the EEA Agreement prohibit restrictive business practices. The implementation of Article 101 TFEU is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can be applied by the Commission and by the national competition authorities of EU Member States. More information is available on the Commission’s competition website, in the public case register under the case number AT.40208. Action for damages 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. Whistleblower tool The Commission has set up a tool to make it easier for individuals to alert it about anti-competitive behaviour while maintaining their anonymity. The new tool protects whistleblowers’ anonymity through a specifically-designed encrypted messaging system that allows two way communications. The tool is accessible via this link.
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