The judge of Madrid Commercial Court No. 17 has issued a judgment partially upholding the claim filed by the European Super League Company against UEFA and FIFA. The judge ruled that both organizations abused their dominant position by granting themselves the discretionary power to prohibit participation in alternative competitions and by imposing unjustified and disproportionate restrictions on free competition in the market

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FIFA and UEFA have abused their dominant position and are preventing free competition in the market

The judge of the 17th Commercial Court of Madrid has partially upheld the claim brought by the European Super League Company against UEFA and FIFA. In the operative part, in line with the judgment of the Court of Justice of the European Union of 21 December 2023, the judge declared that «articles 22, 70, 71, 72 and 73 of the FIFA Statutes, article 6 of the FIFA International Match Regulations and articles 49 and 51 of the UEFA Statutes are incompatible with articles 101 and 102 TFEU».

The judgment recognizes that UEFA and FIFA have abused their dominant position, violating the content of article 102 TFEU, by granting themselves the discretionary power to prohibit participation in alternative competitions, also preventing free competition in the market, by imposing unjustified and disproportionate restrictions in violation, also, of the provisions of article 101 TFEU.

In order to ascertain whether UEFA and FIFA hold a dominant position in the market that may contravene the provisions of article 102 TFEU, the court must first analyze the relevant market in which the defendants operate, their position within that market, and whether there has been an abusive exploitation of their position through the imposition of a system of prior authorization of competitions.

It is evident that the defendants hold a dominant position, as they are the sole entities at the international and European levels that authorize the organization of soccer competitions. However, in order to substantiate «that there has been an abusive exploitation of this dominant position, it will be necessary to demonstrate that the defendants' conduct has the actual or potential effect of restricting competition, excluding effective competitors from the market, or preventing their development in the market».

With regard to the system of prior authorization, the judge posits that this system, «in and of itself, does not constitute an abusive exploitation». This is because the existence of rules pertaining to prior authorization and participation in competitions is deemed legitimate «when they are designed to ensure the homogeneity and coordination of competitions within a calendar and to promote, in an adequate and effective manner, the holding of sports competitions based on equal opportunities and merit».

The Court of Justice was similarly unequivocal in this regard, stipulating that this type of provision must be accompanied by «limits, obligations, and a control that makes it possible to exclude the risk of abusive exploitation of its dominant position». In the event that a given entity is in a position to determine the conditions under which potentially competing undertakings may enter the market, by way of the grant of prior authorization, that power must, as the Court of Justice of the European Union understands, «be subject to material, transparent, clear and precise criteria».

The European Super League Company (ESL) contended that «the system of prior authorization imposed by FIFA and UEFA contravenes article 102 of the Treaty on the Functioning of the European Union (TFEU) in that the absence of material criteria and procedural rules constitutes an abuse of a dominant position». Conversely, UEFA asserts that «the prior authorization rules do not infringe article 102 TFEU because they are based on a legitimate objective, are inherent to the pursuit of that objective, and are proportionate».

The judge of the 17th Commercial Court of Madrid has determined that there is no regulated, controlled, standardized, and objective procedure for prior authorization. Consequently, this power is exercised in a discretionary and arbitrary manner.

Firstly, the magistrate acknowledges that «there is no procedure for the authorization of a competition; rather, there is a requirement for prior authorization of a competition». Furthermore, there are no material and objective criteria regulating the necessary conditions that will be considered and assessed when granting or denying authorization. This lack of regulation allows for the possibility of arbitrary, discretionary, and unjustified action by UEFA-FIFA, without its decision being questioned as valid or invalid.

With regard to the question of the publicity of the rules, the Court of Justice of the European Union has already ruled on this issue, stating that «in order for the rules for prior authorization of sporting competitions and participation in such competitions [...] to be regarded as subject to transparent, objective and [...] In order for material criteria and transparent and non-discriminatory procedural rules to be regarded as subject to precise, material criteria and transparent, non-discriminatory procedural rules which do not hinder effective market access, it is necessary, in particular, that those criteria and those rules have been made known, in an accessible manner, prior to any application of those rules».

In light of the specific circumstances of the case and in accordance with the reasoning of the Court of Justice of the European Union, the judge has determined that «the imposition of the requirement to obtain prior authorization, without the development of an adequate procedure or the establishment of material criteria, is a violation of article 102 of the Treaty on the Functioning of the European Union. It was established that the power of prior authorization is not subject to material criteria or procedural rules that guarantee its transparent, objective, and non-discriminatory nature. This determination led to the conclusion that the power of prior authorization infringes upon article 102 of the Treaty on the Functioning of the European Union (TFEU)».

However, if the prior authorization were subject to material and objective criteria and procedural rules to ensure transparency, objectivity, and non-discrimination when granting or refusing them, it could be concluded that this power of prior authorization would not contravene the provisions of article 102 TFEU.

The judge posits that «it is possible to design a new authorization system, or to complement and adapt the existing one, since the authorization system is not inherently restrictive. Rather, it is the absence of regulation that determines the restriction». The judge recommends the creation of an autonomous and independent body to review the authorization of competitions and the submission to the jurisdictional courts of the different states.

In light of the aforementioned considerations, the Madrid Commercial Court No. 17 Judgment also orders FIFA and UEFA to «cease the anti-competitive conduct and to prohibit its future repetition». Furthermore, the defendants are condemned to «immediately remove the anti-competitive actions described in the preceding paragraphs that have occurred before or during the pendency of these proceedings».

In a press release, UEFA expressed satisfaction at «the judge's confirmation of the validity of the system of prior authorization for third-party competitions». The release emphasized that «the judgment does not grant third parties the right to develop competitions without authorization and does not refer to any future project or modified version of the existing project».

It is important to note that the resolution issued by the Commercial Court of Madrid is not yet final. Therefore, a corresponding appeal may be filed within twenty days.