The International Skating Union (ISU) is the only international sports federation recognised by the International Olympic Committee for administering and regulating ice figure skating and ice speed skating at a worldwide level. The ISU also organises speed skating events in the context of major international competitions. The eligibility rules adopted by the ISU stipulate that skaters may only participate in events authorised by the ISU or its members. If skaters were to participate to an unauthorised event, they would be exposed to a lifelong ban from any competition organised by the ISU. The ISU refused to approve an event organised by IceDerby in Dubai, making it difficult for IceDerby to attract skaters since they were afraid of the potential sanctions.
In December 2017, the European Commission ruled that the ISU’s eligibility rules violated Article 101 of the TFEU and Article 53 of the EEA Agreement. The European Commission considered that the rules set out by the ISU were neither inherent in the pursuit of these legitimate objectives, nor proportionate to their achievement. The ISU lodged an appeal to the General Court of the European Union (General Court) against the European Commission’s decision.
On 16 December 2020, the General Court issued its judgment (T-93/18) in the International Skating Union Case. In its judgment, the General Court confirmed that the rules set by the ISU were contrary to EU competition law.
The General Court confirmed that the eligibility rules have as their object the restriction of competition within the meaning of Article 101 TFEU. The General Court noted firstly that the situation of the ISU is capable of giving rise to a conflict of interests. The ISU is responsible for administering and regulating the discipline and can authorise competitions organised by third parties, but it also organises the most important speed skating competitions which is a commercial purpose. The General Court insisted that the ISU is required to ensure, when examining applications for authorisation, that third-party organisers of speed skating competitions are not unduly deprived of access to the relevant market, to the extent that competition on that market is distorted.
Regarding the content of the eligibility rules, the General Court found that not all requirements applied by the ISU can be regarded as clearly defined, transparent, non-discriminatory and reviewable authorisation criteria, which, as such, would be capable of ensuring the organisers of events enjoy effective access to the relevant market. On the contrary, the ISU holds broad discretion to refuse to authorise competitions proposed by third parties.
The General Court also noted that the severity of the potential sanction is particularly relevant when identifying potential obstacles to the proper functioning of competition on the relevant market. A lifelong ban is a very severe sanction that could dissuade athletes from taking part in non-authorised events even when there is no legitimate reason for this. The General Court therefore decided that the penalty was not proportionate, even after the relaxation of rules issued by the ISU in 2016.
Lastly, the General Court examined the European Commission’s assessment regarding the objectives pursued by the eligibility rules. The Court acknowledged that the protection of the integrity of the sport constitutes a legitimate objective recognised by Article 165 TFEU. The General Court however concluded that the eligibility rules set up by the ISU go beyond what is necessary to achieve its objectives and are not proportionate to those objectives.
The General Court concluded that the European Commission was right to rule that the eligibility rules reveal a sufficient degree of harm, in particular in view of their content, to be considered as restriction of competition by object.
In its judgment, the General Court also examined the legality of the penalty imposed by the Commission to bring an end to the infringement. In the decision, the European Commission decided that the fact that disputes were to be resolved before the Court of Arbitration for Sport, in Lausanne, Switzerland, was to be considered an aggravating circumstance. The General Court disagreed on this point. According to the court, only unlawful conduct or circumstances which render the infringement more harmful can justify an increase of the penalty for an infringement of EU competition law. This is not the case with the ISU’s arbitration rules.
This is an important judgment as it demonstrates the potential impact of EU competition rules on sports governing bodies.
Please contact Pierre de Bandt or Raluca Gherghinaru for further information about this case and/or for general legal advice relating to competition law.