Flashcards in Competition Law in European Sport Deck (69)
Which rules falls outside the scope of the EU Treaty?
Purely sporting activities fall outside the scope of the treaty, while the EC Treaty would apply to economic activities.
- However rejected by Meca-Medina
Explain the test of Meca-Medina
The first step of the test would be to determine whether the sports association that adopted the rule would be considered an undertaking or an association of undertakings.
The second step concerns the issue whether the challenged rule in question restricts competition within the meaning of art. 101 or constitutes an abuse of a dominant position under art. 102.
The third step will be to determine whether trade between member states is effected.
The fourth step concerns whether the rule may fulfil the conditions of art. 101 (3) TFEU.
What is an undertaking?
A sports association that carries out an economic activity.
A sports association would be an association of undertakings, if its member carried out an economic activity.
Explain the principles in the Wouter decision
Account must be taken of:
1. The overall context in which the rules were taken or produced their effect and of their objectives and
2. Whether the restrictive effects were inherent in the pursuit of the objectives and
3. the proportionality of the rule in light of the objective pursuit.
What should be learned from the Meca-Medina case?
That from now on it is not possible to pre-determine an exhausted list of sporting rule, which may or may not breach the competition principles embedded in art. 101 and 102 TFEU.
Any sporting rule must be assessed on a case-by-case basis.
What act in important in US Anti-trust legislation?
The Sherman Act - especially the two first sections.
The purpose was to promote consumer welfare and to protect against the powers of big business.
What does § 1 of the Sherman Act state?
That every contract, combination in the form of trusts or otherwise, in restraint of trade, is declared to be illegal.
What two types of analysis that the US Courts developed - explain them?
The per se rule and the rule of reason.
Explain the Bassett v. NCAA case
A case concerning whether a coach had violated NCAA rules concerning recruitment practises. The court found that the rules and the sanctions were not commercial - therefore that rules and the enforcement hereof fell outside the scope of anti-trust law.
Explain the Warrior Sports Inc. v. NCAA case
Involved the pertinent NCAA rules on the specifications of Lacrosse sticks.
The Court again ruled that the NCAA rule was not commercial in nature and therefore not subject to challenge under the Sherman Act.
Explain the single entity defence
The Sherman Act requires a plurality of actors - therefore many professional leagues have other time claimed that they were immune from anti trust laws because they were a single entity.
NOT accepted by the US Courts - the Courts sees the leagues as combinations of competitors.
What does the mean that the MLS have a syndicated ownership model?
That the MLS owns all the teams - each team has two types of shareholders: Investor operators and passive investors.
Explain the Fraser v. MLS case
The players claimed that MLS violated section 1 of the Sherman Act. All player contracts were made with the league (designated player rule). The players stated that they were able to obtain higher salaries if they negotiated directly with the franchisers.
The Court did not find a violation.
Explain the American Needle Case
NFL tried to invoke the single entity defence. NFL had granted a 10 year exclusive headware license with another sports manufacturer than American Needle.
The Supreme Court reversed the decisions. The Court found that the teams were acting as separate economic actors pursuing separate economic interests.
The Supreme Court again dismissed the Single Entity Defence.
Explain § 2 in the Sherman Act
Every person, who shall monopolise or attempt to monopolise shall be deemed guilty of a felony.
What is important in relation to monopolisation cases?
The definition of the relevant market
How is the relevant market defined?
The area of effective competition within which the defendant operates.
Product market and geographical market
When in § 2 of the Sherman Act violated?
1) A monopoly power
2) Proof of unlawful conduct by the alleged monopolist.
What is the purpose of EU competition law?
1. Promotion of a competitive market economy
2. Prevention of barriers to integration of the single European market
Explain Art. 101 TFEU
All agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market..... is prohibited.
What does art. 101 prohibit?
Cartel-like agreements between two or more undertakings, which may affect Member State trade and which have an anti-competitive purpose or effect.
What is an undertaking within EU law?
A natural or legal person engaged in economic or commercial activities involving the provision or goods or services.
Is an employee an undertaking?
As a starting point no - therefore an agreement between an undertaking and one of its employees will not be subject to art. 101.
How is art. 101 limited?
The restriction must be "appreciable" - significant - de minimis principle.
Explain the Maschinenbau test
It must be possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law of a fact that the agreement in question may have an influence, direct or indirect, actual or potential on the pattern of trade between member states.
Explain art. 101 (3)
The provisions in art. 101 (1) may be declared inapplicable in case of:
- any agreement between undertakings,
- any decision by associations of undertakings
- any concerted practise
which contributes to improving the product or distribution or goods while allowing consumers a fair share of the resulting benefit and which does not:
- impose on the undertakings concerned restrictions, which are not indispensable to the attainment of these objectives
- afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
Explain art. 102 TFEU
Any abuse of one or more undertakings of a dominant position within the internation market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between member states.
E.g. directly imposing unfair purchase or selling prices, limiting production, applying dissimilar conditions etc.
When is a breach of art. 102 TFEU established?
1. A dominant position
2. Abuse of that position
3. An effect on inter-member trade caused by the abuse.
How is a dominant position defined?
A position does not preclude some competition, but enables the undertaking which profits by it at least to have an appreciable effect on the conditions under which that competition will develop.