A new clash in the world of sports regarding potential infringements of competition law

1. The reasons of the complaint

Today, the PPA represents the majority of professional padel players in the world's top 100. This association is aimed at finding new tours that has an interest in working with the organization.

On the other hand, the agreements signed between the WPT and the players include an exclusive clause that prevents them from participating in different tours. Apparently, the WPT would have warned the padel players of potential negative consequences, if they decided to participate in the first event of the FIP’s new international circuit; which took place between 28 March and 2 April in Doha, Qatar, as they would be in breach of such exclusive clauses.

On 23 March 2022, the PPA published an official statement announcing the reasons for the complaint submitted before the European Commission. Which is based on the fact SetPoint lodged a request for arbitration before the Civil and Commercial Court of Arbitration ("CIMA"), located in Madrid, claiming a million-dollar sum from the top players in the world ranking.

The PPA has announced that they will take the appropriate measures to legally defend the players, while the WPT is demanding the fulfilment of the exclusive clause agreed by contract.

According to the PPA, the European Commission should follow the same conclusions reached in similar situations regarding other sports, for example, regarding the International Skate Union (“ISU”).

2. What happened in the ISU case?

In 2014, the Korean company Icederby International Co. (“IIC”) planned to organise a skating event in Dubai and requested authorisation from the ISU, which was denied. As a result, the IIC abandoned the project as it was unable to ensure the participation of the skaters who were exposed to a ban on participation in any competition organised by the ISU.

The European Commission, following a complaint submitted by two skaters, considered that the ISU eligibility rules, which provided for the sanction, were not clearly defined and constitute a decision of a business association. Therefore, the refusal of authorisation could be intended to prevent other organisations from hosting events thus, protecting their economic interests by creating artificial barriers.

In this case, the European Commission concluded that there was no legitimate reason for the ISU to refuse the authorisation requested by the IIC. As the ISU could establish rules to protect the integrity of the sport and to avoid risks (e.g., manipulation of competitions), the rules went beyond what was necessary to achieve those objectives, and the sanctions were disproportionate considering the average length of a skater's career.

3. Overview of Sports and Competition law

In general terms, when assessing the compatibility of sporting rules with antitrust rules, account must be taken of (i) the overall context in which the rules were adopted and, more specifically, its objectives; (ii) whether the restrictive effects are inherent in the pursuit of the objectives; and (iii) if these are proportionate.  

It should be noted that professional sport often requires cooperation between competitors. The EU foresees several legitimate objectives that can justify restrictions under competition law, including, amongst others, the competitive balance, fairness and openness, the promotion of young people's training, the health and safety protection of sportspeople and the prevention of discrimination.

In addition, a large part of professional sports in the EU are self-regulated by federations/associations that not only establish the conditions of participation in the market, but also participate in them (e.g., UEFA). This dual role as a regulator and as a market player may poses a high risk of conflict of interest and prohibitions of the participation in their events may also frustrate their legitimate objectives (e.g., C-49/07 Motoe case).

On this basis, a deep analysis on a case-by-case basis is generally required.

4. Does this mean that the game is over?

Considering the above, it seems that there is still a lot of games left to play. Actually, the complaint submitted by the PPA has been filed almost one year after the 17th Commercial Court of Madrid referred for a preliminary ruling on the Super League conflict in May 2021. This year, the Court of Justice of the European Union is expected to rule on the question referred, which is likely to mark a new milestone in EU jurisprudence concerning professional sports and competition law.

On balance, the 2022 "sport season", as far as competition law is concerned, promises to be tight until the very end.

For more information, please contact Candela Sotes.