‎Editor's Note: Ryan is Assistant Professor at Thompson Rivers University, he defended his PhD at Erasmus University Rotterdam in December 2015. His dissertation examined human rights violations caused by international sporting events, and how international sporting organisations may be held accountable for these violations.

Introduction

On Sunday, August 21, the 2016 Summer Olympic Games in Rio de Janeiro will end. The spotlight will dim not only on the athletes who return to their home countries to ply their trade in relative obscurity, but also on the country of Brazil.[1] Once the Games have ended, life will go ‘back to normal’, although for many residents of Rio de Janeiro, what is ‘normal’ is anything but.

Watching the opening ceremonies from the favelas – Andrej Isakovic via Getty Images

“A New World” for Favela Residents

While the world has been preoccupied with Zika, the Brazilian corruption crisis, the cesspool that is Guanabara Bay, and the worrying state of some of the sporting venues, the displacement of persons is perhaps the largest problem not only facing the Games, but is the largest one caused (or at least exacerbated) by the Games themselves. Since Rio de Janeiro was selected to be the host of the Olympic Games in 2009, over 77,000 individuals (22,000 families) have been evicted from their homes. Most, if not all, of these individuals were evicted from their homes in the favelas, or slums, communities that began to appear in earnest in the 1970s as Brazil, and Rio de Janeiro in particular, began to urbanize. Currently, favelas are home to 1.4 million people, or about 22% of Rio’s population. It is very likely that not all of these evictions were related to the Games directly. City officials have stated that only Vila Autodromo was directly-affected by the Games, as this particular favela was turned into a parking lot for the Olympic Park and twenty homes for those who refused to leave (Reuters provides a good before/after comparison).

Vila Autodromo (Olympic Park under construction) - Genilson Araújo / Parceiro/O Globo

However, seemingly taking their cue from Rio 2016’s slogan, “Um mundo novo” (“A New World”), city officials have used the Olympic Games as an excuse to ‘re-imagine’ the city on a broader scale. In a 2012 interview, the mayor of Rio stated that “The Olympics pretext is awesome; I need to use it as an excuse for everything…Now all that I need to do, I will do for the Olympics. Some things could be really related to the Games, others have nothing to do with them.” As such, people from favelas that have nothing to do with the Games have been evicted from their homes, with the Games creating the pseudo-state of ‘emergency’ that has, in other cities that have hosted the Games, been used as an excuse to bypass normal procedures and do away with normal protections, in the mold of Naomi Klein’s “shock capitalism”.

The Rio government has claimed to offer financial packages and resettlement options for those who were displaced. These compensation packages were imperfect, as the government offered less than market value for the homes, and those who were relocated may have been relocated anywhere from several to dozens of kilometers away from their former residence, uprooting their businesses or employment, and their social and family lives. However, the relocation policy appears to be the velvet glove concealing the iron fist. For those who resisted relocation, the city cut off their water, and halted garbage pickup and postal service, while violent clashes between residents and police have also been reported. While not directly-related to evictions, but closely related to conditions in the favelas, there has been a reported spike in police killings of street children to “clean the streets” ahead of the Games. While new housing is being built in Rio, much of it is set to be high-end condos, not affordable housing.

International Standards Regarding Housing

The focus of this particular blog post is not the legality of the displacement, per se. That is an issue best addressed by Brazilian lawyers. However, there are international standards that Brazil should live up to. The Universal Declaration of Human Rights recognises a right to own property, and prohibits the arbitrary deprivation of property. Another international instrument of wide application, the International Covenant on Economic, Social, and Cultural Rights (ICESCR), recognises a right to an adequate standard of living. The ICESCR Committee, in its General Comments in 1991 and 1997, has interpreted this standard to include a right against forced evictions. If an eviction does occur, rights to information and participation by those who are affected arise. Finally, when an eviction does take place, a right to compensation and adequate resettlement attaches.

The case of Rio seems to suggest that forced evictions have likely occurred, based on the sheer scale of those who were evicted. Given the timeline of preparing for the Games, provisions on notice and information appear to have been curtailed or cancelled altogether, given that the city went to work on evicting persons immediately after Rio was awarded the right to host the Games in 2009. While some residents, particularly of Vila Autodromo, received compensation and alternative housing, in many cases there appears to be disagreement as to whether compensation has been offered at all with locals saying they have not received compensation, while city authorities deny evicting families without compensation. Actions such as police raids, and cutting off public services also suggest the evictions approach the threshold of ‘forced’ rather than voluntary/negotiated. Regardless of whether the letter of these international standards has been violated, the scope and pace of the evictions is of great concern.

IOC Stance Regarding Displacement

In particular, it should be distressing to readers to see the International Olympic Committee (IOC) seemingly stand by while these evictions occur in the name of the Games. And it is not as if the IOC has no clue that evictions take place due to the Games. For many Games, at least some displacement occurs to make way for infrastructure, while the 2008 Beijing Games saw an estimated 1.25 million people evicted due to Olympic-related projects.

The IOC has responded to the problems of displacement, pledging in 2009 to intervene with the Organising Committee for the Olympic Games (the OCOG – the actual body that is responsible for Games’ preparations) in situations where people who were displaced due to Olympic venue construction were ‘mistreated’. However, the IOC has not said anything publicly in regards to the evictions, and there is no public information regarding any IOC intervention.

Following the IOC’s Agenda 2020, and its recommendations on ‘social sustainability’, the IOC now requires cities bidding to host the Olympics to identify projects that may require displacement of existing communities, and to confirm that the procedures used to displace persons will conform to national and/or international standards. However, promises made by host cities are not always lived up to, as can be seen by Rio’s failed promises to treat 80% of the water flowing into Guanabara Bay, and treating only 21% on the eve of the Games. Rio is apparently also able to get away with such failed promises consequence-free, despite the risk of harm to athletes competing in and around the waters.

The Games Cannot Fix All Ills, But They Should Avoid Creating New Ones…

Ultimately, the largest problem with the Olympic Games is a lack of accountability. The IOC, an organisation based in Switzerland, holds the rights to the Games and selects the host city, but does not actually organise the Games. As such, the IOC often appears to act as though what happens ‘on the ground’ is neither its concern nor its responsibility. Those who actually organise the Games, particularly the OCOG and Host City (the National Olympic Committee of the host country also participates, but is not relevant here), often have limited accountability to those who are harmed by the Games. The OCOG disbands shortly after the Games are over, leaving the Host City holding the bag. The Host City’s accountability is entirely dependent on the political and legal structures of the country, and in countries like Russia (Sochi 2014, World Cup 2018), China (Beijing 2008, Beijing 2022), but even in more established democracies, Host City officials may have limited accountability.

Now is the time that commentators jump up-and-down to shout that hosting the Olympic Games in a single site would fix all of the problems. By placing the Games in Athens (no permanent Winter Games host is ever suggested), there wouldn’t be a need to host the Games in countries with questionable human rights records, or to watch as every single Olympic Games goes over-budget. However, rarely are suggestions made as to who will pay for the infrastructure, which will likely need to be periodically updated (it might be a bit hard for the Greek government to afford it at this point), cope with the criticism that the Games would be cemented as a Euro-centric enterprise, or the other problems that would arise with a permanent host. The Olympic Games are going to continue to be held in countries with imperfect human rights records (which would be pretty much all of them), and in countries with poor human rights records.

All of this is to say that the IOC needs to begin to actually enforce its ideals, and its own mandate of ensuring an Olympic Games that is socially sustainable. The IOC and the Olympic Games should not be the solution to human rights problems in a host country, for they cannot be. However, the IOC does have a minimum moral responsibility to ensure that the Olympic Games themselves are prepared for with the utmost consideration for human rights. And the IOC already has the powers to enforce this mandate through the Host City Contract, whether by withholding money from the Host City, or at the most extreme end, by removing the Games altogether. The IOC has also arguably set a precedent of withholding its support for a country to host future sporting events as a result of the Russian doping scandal, and it could do the same for Olympic host cities that engage in practices that violate human rights in the name of the Games. Of course, this is ultimately up to the IOC itself, barring pressure from states or sponsors.

The Olympic Games were never going to fix Brazil’s or Rio’s problems. Many of Rio’s problems, including Zika, ongoing sanitation issues, corruption, and political and economic instability, have little to no connection to the Games, and were certainly not caused by the Games. In that vein, it is naïve to believe that the Games could be anything more than a temporary papering-over of the deep divisions in Brazilian society (for more on this point, I suggest reading Dave Zirin’s book, Brazil’s Dance with the Devil). What the Olympic Games can do is serve as an example of how to carry out a socially-sustainable project in an emerging market economy. This applies not only to the displacement of persons, but also to the treatment of those who work on construction projects related to the Games (as opposed to the forced labour used in Beijing and Sochi), the environmental sustainability of the Games, and governmental policies and procedures that enhance accountability. While the IOC has made tentative steps to address these issues, as I have addressed before in this space, it is insufficient. The IOC cannot solve all the world’s ills, but it can at least ensure that the Games, carried out under its name, live up to its own standards.  The Rio Olympic Games could have served as an example of how to carry out a socially-sustainable project in an emerging market economy.

[1] Although the Paralympics will arrive on 7 September, and while London 2012 did an excellent job of promoting those Games it remains to be seen if Rio will follow suit.

Editor’s note: Yann Hafner is a Phd researcher at the University of Neuchâtel specialized in sports and nationality issues. He is also Legal Affairs Manager at the Fédération Internationale de Volleyball. Yann is an editor of the ASSER International Sports Law Blog and has previously published on the blog on nationality conundrums at the FIFA World Cup 2014 in Brazil (see here).  

This contribution aims to decipher the relationship between sporting nationality and the Olympic Games. To this end, the author will first define sporting nationality and discuss athletes’ eligibility in national team in the context of the Olympic Games. Then, selected issues in relation with sporting nationality and the Olympic Games (with an emphasis on issues related to the Rio 2016 Olympic Games) will be investigated.

Defining sporting nationality at the Olympic Games

Sporting nationality is in essence twofold:

• on the one hand, sporting nationality is the eligibility concept in use within the world of sport to define the participation of athletes in international competitions[1], i.e. sporting events between the members of an international federation or the National Olympic Committees in the context of the Olympic Games[2]; and

• on the other hand, sporting nationality refers to the legal relationship between an athlete and the national governing body for whom he/she is eligible according to the applicable regulations[3]. Each international federation and organizers of multisport events, such as the International Olympic Committee (IOC), maintain their own set of rules[4]. Consequently, an athlete may have as many sporting nationalities as there are governing bodies in his/her sport[5].

Turning now to athletes’ eligibility for national teams, one should acknowledge that this issue has not always been a primary concern for sports governing bodies[6], including for the International Olympic Committee (IOC). For instance, the first three editions of the Olympic Games foresaw the participation of transnational teams, i.e. teams composed of athletes from different countries competing under one flag[7]. This most notably occurred in track and field, rowing, football, polo, swimming and tug of war[8]. The decision of the IOC to impose the creation of one National Olympic Committee per country in order to facilitate the organization of the Olympic Games put an end to this practice as of 1908. That said, the IOC did not regulate sporting nationality at the Olympic Games before 1920[9]. Nowadays, sporting nationality is governed by Rule 41 Olympic Charter 2015 which reads as follows:

“41 Nationality of competitors

1. Any competitor in the Olympic Games must be a national of the country of the NOC which is entering such competitor.

2. All matters relating to the determination of the country which a competitor may represent in the Olympic Games shall be resolved by the IOC Executive.

Bye-law to Rule 41

1. A competitor who is a national of two or more countries at the same time may represent either one of them, as he may elect. However, after having represented one country in the Olympic Games, in continental or regional games or in world or regional championships recognised by the relevant IF, he may not represent another country unless he meets the conditions set forth in paragraph 2 below that apply to persons who have changed their nationality or acquired a new nationality.

2. A competitor who has represented one country in the Olympic Games, in continental or regional games or in world or regional championships recognised by the relevant IF, and who has changed his nationality or acquired a new nationality, may participate in the Olympic Games to represent his new country provided that at least three years have passed since the competitor last represented his former country. This period may be reduced or even cancelled, with the agreement of the NOCs and IF concerned, by the IOC Executive Board, which takes into account the circumstances of each case.

3. If an associated State, province or overseas department, a country or colony acquires independence, if a country becomes incorporated within another country by reason of a change of border, if a country merges with another country, or if a new NOC is recognised by the IOC, a competitor may continue to represent the country to which he belongs or belonged. However, he may, if he prefers, elect to represent his country or be entered in the Olympic Games by his new NOC if one exists. This particular choice may be made only once.

4. Furthermore, in all cases in which a competitor would be eligible to participate in the Olympic Games, either by representing another country than his or by having the choice as to the country which such competitor intends to represent, the IOC Executive Board may take all decisions of a general or individual nature with regard to issues resulting from nationality, citizenship, domicile or residence of any competitor, including the duration of any waiting period.”

The connecting factor between an athlete and his/her National Olympic Committee is currently rooted in nationality[10]. The French version of the Olympic Charter refers however to being a “ressortissant” of the National Olympic Committee which is entering the athlete in the Olympic Games. Unfortunately, these two concepts do not necessarily overlap; the term ressortissant may have a broader meaning than nationality[11]. To add another layer of uncertainty, a Court of Arbitration for Sport (CAS) ad hoc Panel has adopted contradictory approaches in this respect:

•  In United States Olympic Committee (USOC) and USA Canoe/Kayak / International Olympic Committee (IOC), the Panel held that the Olympic Charter did not provide for any exception to the nationality requirement[12]; and

• In Angel Perez / International Olympic Committee (IOC), the same Panel held this time that “the word ‘nationality’ in Rule 46 and its Bye-law should be construed broadly. In so far as it is relevant to consider whether a person has lost his or her nationality, the Panel is of the view that a person may be found to have lost it both in circumstances where he or she is de jure or de facto stateless”[13]. Consequently, the Panel found that the athlete had changed his nationality for more than three years and was eligible to represent the United State Olympic Committee in the 2000 Sydney Olympic Games.

To our knowledge, CAS has never discussed the distinction between nationality and “ressortissant” further. This is not to provide certainty to athletes who may enter into a dispute over eligibility in national team.

It should finally be noted that the Olympic Charter does not mandate for the fulfillment of any other eligibility requirements, such as residency, except in the case of a change of sporting nationality. In this specific case, athletes must have to sit out for three years since they last represented their previous national team before being eligible for a second National Olympic Committee[14]. That said, the Olympic Charter stated that the Executive Board may take all decisions of a general or individual nature with regard to issues resulting from nationality, citizenship, domicile or residence of any competitor, including the duration of any waiting period. This clause aims at covering situations in which there is no National Olympic Committee to enter an athlete for instance[15].

Selected issues

The host nation syndrome:

All host nations of the Olympic Games share one common thread: the fear of not performing during “their” event. This is notably due to the fact that the country welcoming the world during the Olympic Games generally receives a certain quota of places in each sport[16], including for sports with little or no local tradition[17]. While certain nations have set up traditional talent detection and training programs in order to grow a new generation of elite athletes in time, others have chosen a completely different route; they either:

• Naturalize athletes; Italy[18], Greece and Australia have acted in such a way ahead of their Olympic Games[19]; or
• Openly advertise participation in the next Olympic Games on the (sporting) market, in particular to their diaspora.

The “Brazilian Rugby Players Wanted” campaign is the latest example of this. It was launched by the Brazilian Rugby Union (“Confederação Brasileira de Rugby”) in 2013 and aims at finding rugby players with a Brazilian passport or Brazilian descent who are currently unknown to the national governing body and who may qualify for its High Performance Program in view of the Rio 2016 Olympic Games.

The Team of Refugee Olympic Athletes:

On 2 March 2016, the IOC Executive Board decided to create a Team Refugee Olympic Athletes. The approach of the IOC was to allow athletes who had fled their country to be directly entered in the 2016 Rio Olympic Games without the need to resort to the National Olympic Committee of their nationality. To date, ten athletes meeting the relevant sporting requirements have been selected to be part of the Team Refugee Olympic Athletes.

Although portrayed as a first, the IOC Executive Board has made use of its powers on multiple occasions to allow the participation of athletes without a country or without a National Olympic Committee:

• 1992 Barcelona Olympic Games: athletes from the Federal Republic of Yugoslavia participated in the Olympic Games as Independent Athletes[20]. They were not allowed to bear the colors of their country due to sanctions of the UN Security Council (i.e. the Federal Republic of Yugoslavia was banned from all international competitions)[21];
• 2000 Sydney Olympic Games: Athletes from East Timor were authorised to participate under the Olympic banner due to the secession of their country from Indonesia[22];
•  2012 London Olympic Games: three athletes from the Netherland Antilles and one from South Sudan were placed under the Olympic flag[23]. The absence of a National Olympic Committee in these countries triggered the decision of the IOC. Athletes from the Netherland Antilles now compete with the Netherlands;
• 2014 Sochi Olympic Games: three Indian athletes marched under the Olympic banner during the opening Ceremony due to the suspension of their National Olympic Committee by the IOC. They were subsequently authorised to bear their own colors following the removal of the ban on their country.

The concept of a Unified Delegation:

The concept of a United Delegation is only in use for North and South Korea[24]. It is similar to a confederation of National Olympic Committees. In other words, they march together at the opening and closing Ceremonies but maintain separate sporting spheres[25]. Consequently, medalists are honored by the flag of their respective National Olympic Committee, not by their common flag. Of note, the North and South Korean National Olympic Committees are currently engaged in merger negotiations. If successful, there would be only one National Olympic Committee for two countries – and this would be unique in the Olympic Movement. The effects of such a merger on Rule 41 Olympic Charter are currently unknown.

[1] TAS 92/80 du 25 mars 1993, B. / Fédération Internationale de Basketball (FIBA), in : Reeb, Rec. I, n° 13 p. 287 ff.

[2] GARRIGUES Christian, Activités sportives et droit communautaire, Thèse (Université Robert Schuman), Strasbourg (S.I.) 1982, p. 569.

[3] “National eligibility rules confine the right to represent a national side and, thus, to participate in international competition: the criteria employed include nationality, place of birth and residence in the territory for a prescribed period of time” [MCARDLE David, Player Quotas, National Eligibility Restrictions, and Freedom of Movement under EU Law, European Union Studies Association (EUSA), Biennial Conference 2003 (8th), March 27-29, 2003, p. 14].

[4] Shachar Ayelet, Picking Winners: Olympic Citizenship and the Global Race for Talent, in : The Yale Law Journal, Vol. 120 (2011), p. 2134; Siekmann Robert, Sport and Nationality : Accelerated Naturalisation for National Representative Purposes and Discrimination Issues in Individual Team Competition under EU law, in : The International Sports Law Journal, 2011/3-4, 2011, p. 87; Wollmann Anna Sabrina, Vonk Olivier, Groot Gérard-René de, Towards a sporting nationality?, in : Maastricht Journal of European and Comparative Law, Volume 22, Number 2, 2015, p. 306.

[5] GUILLAUMÉ Johanna, L’autonomie de la nationalité sportive, in : Journal du droit international, année 138, n° 2/2011, Avril-Mai-Juin 2011, p. 323 ff.

[6] Hafner Yann, La nationalité sportive et les Jeux Olympiques, in : Droit & Olympisme : Contribution à l’étude juridique d’un phénomène transnational, Actes du colloque du 4 septembre 2013, Maisonneuve Mathieu (dir.), Aix-en-Provence (Presses Universitaires d’Aix-Marseille), 2015, p. 81.

[7] The existence of transnational teams is however supported by the International Olympic Committee in the context of the Youth Olympic Games. See: Parry Jim, The Youth Olympic Games – Some Ethical Issues, in : Sport, Ethics and Philosophy, Vol. 6, No 2, 2012, p. 144; Wong Donna, The Youth Olympic Games: Past, Present and Future, in : The International Journal of History of Sport, Vol. 28, No 13, 2011, p. 1836.

[8] Hafner Yann, La nationalité sportive et les Jeux Olympiques, in : Droit & Olympisme : Contribution à l’étude juridique d’un phénomène transnational, Actes du colloque du 4 septembre 2013, Maisonneuve Mathieu (dir.), Aix-en-Provence (Presses Universitaires d’Aix-Marseille), 2015, p. 81 and references.

[9] Rule 4 Olympic Charter 1920.

[10] WOLLMANN Anna Sabrina, Nationality Requirements in Olympic Sports, Oisterwijk (Wolf Legal Publishers) 2016, p. 59.

[11] Foreign nationals serving in the army of another state or persons under the protection of a sate (i.e. protected persons) are deemed ressortissant of this particular state. See: Weis Paul, Nationality and statelessness in international law, 2ème éd., Alphen an den Rijn – Germantown (Sijthoff & Noordhoff) 1979, p. 7.

[12] CAS ad hoc Division OG 2000/001 dated 13 September 2000, United States Olympic Committee (USOC) and USA Canoe/Kayak / International Olympic Committee (IOC), in : Reeb, Rec. II, p. 600 s., n° 22 ff.

[13] CAS ad hoc Division OG 2000/005 dated 19 September 2000, Angel Perez / International Olympic Committee (IOC), in : Reeb, Rec. II, p. 631, n° 27.

[14] Gillon and Poli conducted a survey during the 2004 Athens Olympic Games, and found that 2,6% of the athletes registered had previously represented another country [Gillon Pascal, Poli Raffaele, La naturalisation de sportifs et fuite des muscles. Le cas des Jeux Olympiques de 2004, in : La nationalité dans le sport : Enjeux et problèmes, Actes du Congrès des 10 et 11 novembre 2005, Oswald Denis (éd.), Neuchâtel (Editions CIES) 2006, p. 59]. This figure is slightly lower than the percentage of players who have changed national affiliation before participating in the 2014 FIFA World Cup [http://www.asser.nl/SportsLaw/Blog/post/blurred-nationalities-the-list-of-the-23-and-the-eligibility-rules-at-the-2014-fifa-world-cup].

[15] Rule 44.2 Olympic Charter 2015 provides that “Only NOCs recognised by the IOC may submit entries for competitors in the Olympic Games”. Accordingly, Beloff et al. note that “[t]his would seem to exclude the possibility of the IOC independently permitting athletes to compete in the Games, but is has been argued that the IOC enjoys a residual discretion to that effect” [Beloff Michael J. QC, Kerr Tim, Demetriou Marie, Beloff Rupert, Sports law, 2^ème éd., Oxford – Portland, Oregon (Hart) 2012, n° 1.72 p. 21].

[16] Gillon Pascal, Poli Raffaele, La naturalisation de sportifs et fuite des muscles. Le cas des Jeux Olympiques de 2004, in : La nationalité dans le sport : Enjeux et problèmes, Actes du Congrès des 10 et 11 novembre 2005, Oswald Denis (éd.), Neuchâtel (Editions CIES) 2006, p. 63.

[17] To avoid any embarrassment, certain international federations, such as the Fédération Internationale de Hockey (FIH), have now reviewed their Host Country Places policy. The host nation is no longer guaranteed a quota and must meet minimum sporting standards in order to enter a team: http://www.fih.ch/media/808384/2014-02-rio-2016-qualification-system-hockey-final.pdf (02.08.2016).

[18] Shachar Ayelet, Picking Winners: Olympic Citizenship and the Global Race for Talent, in : The Yale Law Journal, Vol. 120 (2011), p. 2093.

[19] BAYLE Emmanuel, DURAND Christophe, Sport professionnel et représentation nationale : Quel avenir ?, in : Reflets et Perspectives de la vie économique, Volume 39 (2-3), 2000, p. 164, footnote n° 29; Gillon Pascal, Poli Raffaele, La naturalisation de sportifs et fuite des muscles. Le cas des Jeux Olympiques de 2004, in : La nationalité dans le sport : Enjeux et problèmes, Actes du Congrès des 10 et 11 novembre 2005, Oswald Denis (éd.), Neuchâtel (Editions CIES) 2006, p. 58 and 63.

[20] Chappelet Jean-Loup, L’autonomie du sport en Europe, Strasbourg (Editions du Conseil de l’Europe) 2010, p. 24.

[21] Carrard François, Sports and politics on the international scene, in : Rivista di studi polici internazionali, Vol. 78, No 1, janvier-mars 2011, p. 31.

[22] Grasso John, Mallon Bill, Heijmans Jeroen, Historical Dictionary of the Olympic Movement, 5^ème éd., Lanham (Rowman & Littlefield) 2015, p. 582.

[23] Iorwerth Hywel, Hardman Alun, Rhys Jones Carwyn, Nation, state and identity in international sport, in : National Identities, Vol. 16, n° 4, 2014, p. 330 end note n° 1.

[24] To date, there have been three Unified Delegations in 2000; 2004 and 2008 (MERKEL Udo, The Politics of Sport Diplomacy and Reunification in Divided Korea: One Nation, Two Countries and Three Flags, in : International Review for the Sociology of Sport, vol. 43, no. 3, 2008, p. 298).

[25] Hafner Yann, La nationalité sportive et les Jeux Olympiques, in : Droit & Olympisme : Contribution à l’étude juridique d’un phénomène transnational, Actes du colloque du 4 septembre 2013, Maisonneuve Mathieu (dir.), Aix-en-Provence (Presses Universitaires d’Aix-Marseille), 2015, p. 91.

“I'm sure that in 1985, plutonium is available in every corner drugstore, but in 1955, it's a little hard to come by.” (Dr. Emmett L. Brown)[1]

Back to the future?

Availing oneself of EU law in the ambit of sports in 1995 must have felt a bit like digging for plutonium, but following the landmark ruling of the European Court of Justice (ECJ) in the Bosman case[2], 20 years later, with all the buzz surrounding several cases where EU law is being used as an efficient ammunition for shelling various sports governing or organising bodies, one may wonder if in 2015 EU law is to be “found in every drug store” and the recent cases (see inter alia Heinz Müller v 1. FSV Mainz 05, Daniel Striani ao v UEFA, Doyen Sports ao v URBSFA, FIFA, UEFA) [3] cannot but invitingly evoke the spirit of 1995.

One of the aforementioned cases that also stands out pertains to the injunction decision[4] issued on 29 April 2015 by the Regional Court (Landesgericht) in Frankfurt am Main (hereinafter: the Court) in the dispute between the intermediary company Firma Rogon Sportmanagement (hereinafter: the claimant) and the German Football Federation (Deutschen Fußball-Bund, DFB), where the claimant challenged the provisions of the newly adopted DFB Regulations on Intermediaries (hereinafter: DFB Regulations)[5] for being incompatible with Articles 101 and 102 TFEU.[6] The Court, by acknowledging the urgency of the matter stemming from the upcoming transfer window and the potential loss of clients, deemed a couple of shells directed at the DFB Regulations to be well-aimed, and granted an injunction due to breach of Article 101 TFEU.

(Un)harnessing the brokerage in football

The recently adopted FIFA Regulations on Working with Intermediaries (hereinafter: FIFA Regulations)[7] arguably represent the biggest turning point in the regulation of player and club representation in the history of professional football.[8] While some will argue that by implementing these Regulations, FIFA has thrown in the towel on regulating the ambit of representation in football altogether, it could be said that by steering away from controlling the access to the activity and switching the onus on regulating it, FIFA has not deregulated the activity, but rather shifted the scope of the regulation itself.[9] It has been anticipated that the implementation process would expose several contentious issues (e.g. recommended commission cap, duty of disclosure, representation of minors, suitability of intermediaries, etc.),[10] and the DFB’s adoption of the new Regulation has been no exception in that regard.[11]

The DFB, pursuant to Article 1(2) of FIFA Regulations,[12] and following a rather lengthy exchange of information with the German Football League (Deutsche Fußballliga GmbH, DFL) and the German Association of Players’ Agents (Deutschen Fußballspieler-Vertmittlervereinigung, DFVV),[13] adopted the new DFB Regulations on 13 March 2015. By availing itself of the discretion embedded in Article 1(3) of FIFA Regulations,[14] the DFB tailor-made its regulations, which entered into force on 1 April 2015, to a certain extent, which shall be elaborated upon further below. 

Since the new DFB Regulations by virtue of paragraphs 2 and 3 of Article 3[15] indirectly bound the intermediary agencies through binding players and clubs when entering employment or transfer contracts,[16] which had not been the case with the pre-existent norms, the claimant first unsuccessfully sought the annulment of the Regulations directly from DFB. Subsequently, the claimant sought relief in the form of a temporary injunction from the Court, based upon the pending imminent danger stemming from the abuse of the DFB’s dominant position. Such behaviour, according to the claimant, limited the free choice of profession. Furthermore, according to the claimant, the obligatory disclosure of the remuneration amounts and the prohibition of representation remuneration when the player concerned is a minor went way beyond the borders of necessity and were thus unjustified.[17] The DFB, on the other hand, by rejecting the existence of a pending danger since the claimant had allegedly known of the FIFA Regulations for almost a year, deemed the claim inadmissible due to wrongful recourse to the urgent procedure (Eilverfahren), and additionally claimed the Articles 101 and 102 TFEU to be inapplicable, since the addressed provisions did not restrict competition, but au contraire prevented its distortion (i.e. by prohibiting the abuse of  the intermediary activity, providing for the independence of clubs and players, and guaranteeing transparency and contractual stability, hence bringing their scope within the borders of proportionality).[18]

Intermediaries v DFB: 1-0

The DFB’s guerrilla tactics of throwing the sink back at the claimant screaming for inadmissibility proved rather futile. The Court deemed the claim to be admissible and also found a large portion of the claimant’s arguments in the form of EU law-shaped shells to be well-founded. Subsequently, it granted an injunction as sought from the claimant. It addressed the issue through the prism of the Article 101 TFEU, and specific steps in the reasoning shall be dealt with separately below.

Admissibility as a non-issue

The DFB argued that such a claim could not be made in the urgent procedure, since the issue would pertain to the main cause. However, the Court pointed out that such a claim would be possible under Article 33 of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB).[19] Refusal of such a claim would deprive the claimant of its rights and legal remedies, particularly in the light of the pending danger of losing potential customers (clubs and players), bound directly by the DFB Regulations.[20] The Court also rejected the claim that the issue pertained to an internal decision-making process of the DFB, and said that the adoption of the Regulations had an externally oriented scope and effect.[21]

DFB Regulations are an inter-state trade restricting decision of an association of undertakings

The DFB asserted that it could not be seen as an association of undertakings in the sense of Article 101(1) TFEU considering that it also includes members with an amateur status. By referring to Piau,[22] the Court removed any ambiguity pertaining to the status of the DFB saying that: “...the mere fact that a sports association or federation unilaterally classifies sportsmen or clubs as 'amateur' does not in itself mean that they do not engage in economic activities within the meaning of Article 2 EC.”[23] Furthermore, strengthening its reasoning by first quoting Frubo,[24] stating that: ”Article 101 TFEU applies to associations in so far as their own activities of those of the undertakings belonging to them are calculated to produce the results to which it refers”,[25] and then BNIC,[26] it seemingly left no doubt as to the passive standing of DFB.

Having established the DFB’s status as per Article 101(1) TFEU, the Court moved to the DFB Regulations, and by drawing from Bosman,[27] Lehtonen,[28] and most importantly Piau,[29] qualified them as a decision of an association of undertakings, since they entail the regulation of the economic activity of intermediaries, whereby it is clear “...that the purpose of the occupation of players' agent, under the very wording of the amended regulations, is 'for a fee, on a regular basis [to introduce] a player to a club with a view to employment or [to introduce] two clubs to one another with a view to concluding a transfer contract'...”,[30] and therefore this economic activity cannot be qualified as one of a purely sporting nature.[31]

Albeit steering clear of an explicit reference to CJEU’s vast jurisprudence, the Court deemed the relevant market to be the one of intermediary services where the clubs and the players represented the customers and the intermediaries the providers,[32] hence following to a large extent the pre-established path in Piau.[33] It also pointed out that pursuant the provisions of Article 101(1) TFEU the core of the restriction of competition lied within an agreement (or a decision) which hampered the independence of economic decision making of the companies involved in a particular activity. The present case would prove as no exception since the intermediaries’ ability to provide services would take toll by the eventual non-submission of the signed declaration when entering an agreement with a player or a club upon whom loomed the eventual DFB sanctions. In other words, refusal to declare, which at the same time brought the intermediaries within the scope of DFB norms, limited the intermediaries’ economic freedom to be engaged by players or clubs.[34]

Moreover, the Court had little doubts about the Regulations affecting the inter-State trade. With Bundesliga alone representing the third largest national club football competition in Europe, the size of the market itself leads to the conclusion that the decision in question could have a negative impact on an actual or potential, direct or indirect inter-State provision of intermediary services, all the more so, since it lead to partitioning of markets on a territorial basis. In fact, by invoking Wouters,[35] the Court stressed that: “...it is sufficient to observe that an agreement, decision or concerted practice extending over the whole of the territory of a Member State has, by its very nature, the effect of reinforcing the partitioning of markets on a national basis, thereby holding up the economic interpretation which the Treaty is designed to bring about...” [36]

Possible justifications

Having brought the Regulations within the scope of Article 101(1) TFEU, the Court promptly looked at the available justifications, either within the ambit of Article 101(1) TFEU pursuant to the relevant ECJ jurisprudence, or as one of the explicit Treaty exceptions embedded within Article 101(3) TFEU. In light of the former provision it is worth pointing out that the notion of inherence to legitimate (sporting) purposes is crucial in this ambit, since certain potentially restrictive behaviours (e.g. adoption of transfer rules), may be, although caught by Articles 101 and 102 TFEU respectively, exempted from their scope due to their necessity in pursuance of such objectives. Such an inherent necessity must, however, be assessed on a case-to-case basis. Following such reasoning, and by referring to the landmark Meca-Medina case,[37] the Court invoked an almost blasphemous notion in the ambit of EU competition law by stating that such assessment of legitimate goals under Article 101(1) TFEU was to be addressed through the “rule of reason” doctrine.[38]

As an alternative route stemming explicitly from the Treaty, by referring back to Piau, the Court identified the provisions of Article 101(3) TFEU, which envisage that the Regulations “might enjoy an exemption on the basis of this provision if it were established that they contribute to promoting economic progress, allow consumers a fair share of the resulting benefit, do not impose restrictions which are not indispensable to the attainment of these objectives, and do not eliminate competition.” [39]

Summing up, the Court rather curiously, and perhaps simplistically, pointed out that the common denominator of both approaches entailed three key components; namely the Regulations would have to pursue a legitimate goal, and they would have to be necessary and proportionate. As one such legitimate goal, the Court recognised the issue of necessity to level the playing field in football competitions through a transfer system and thereof stemming regulation of the activity of intermediaries in order to prevent eventual abuses in the form of coerced transfers, and, even more importantly, to protect the minors involved in the process.[40] Both parties recognised the existence of past abusive practices that needed to be eradicated. Regardless of the legitimacy of the majority of the aims pursued, the Court established that certain provisions lacked the needed necessity and were disproportionate, as shall be addressed below.[41]

Individual (un)successful claims

Firstly, the Court deemed the registration obligation for clubs and players, which would bring the intermediaries within the scope of DFB and FIFA rules, to be disproportionate. While the registration and declaration obligations as such could be justified, the same could not be said for the pertaining subsumption of the intermediary service under the overarching umbrella of the DFB rules. The disproportionate full submission to DFB rules, which would strip the intermediaries of their possibility of recourse to ordinary justice, could be just as effectively replaced by a proper enforcement by the DFB of the registration rules themselves. Moreover, the Court found it unclear why the DFB would not be able to safeguard the goals pursued by the DFB Regulations before ordinary courts. [42]

Unlike the registration obligation, the duty to submit a criminal record along with the duty to pay a registration fee were seen as justified and thus proportionate in the eyes of the Court. Due to a potentially large impact of the intermediary activity on competition stemming from the potential influence on players and clubs, no less restrictive measure other than a registration duty could be put in place in order to safeguard the transparency of the football leagues. Moreover, considering the utmost necessity to protect the minors, the duty to submit a criminal record is clearly justified. Since the intermediaries financially benefit from their activity, the pertaining registration fee could also be deemed as a proportionate measure.[43]

The third addressed measure, i.e. the remuneration disclosure requirement, was also seen as justified by the Court. The legitimate aims set out in the previous paragraph were also to be pursued through the disclosure of agreements entered into and remuneration paid to the intermediaries. Such measures represented suitable means for controlling the intermediaries’ behaviour and were thus necessary and proportionate.[44]

The same can be said of the prohibition of acceptance of intermediary transfer fees for future transfers. In this context, the premature termination of contracts between clubs and players represented a major incentive for the intermediaries and at the same time a major source of revenue for clubs. The possibility of claiming a share of the transfer fees would therefore draw the intermediaries into seeking actively an early contract termination, as the new Regulations’ provisions were aimed at preventing such external influence, they are considered justified and proportionate.[45]

Fifthly, the imposition of flat-rate transfer fees was deemed unjustified by the Court, since it prohibited the agreed fee to be expressed in percentage pertaining to the cumulative transfer sum. This reinforced doubts that had previously been expressed about the proportionality of the parent FIFA Regulations provision, namely Article 7. Contrary to DFB’s arguments that such a scheme only required an a priori determination of the fee, the Court was not of the opinion that such a restrictive interpretation was appropriate, and that it could also lead to interpreting the provision in the way to detach the flat-rate fee entirely from the transfer sum. In other words, clubs would only be allowed to pay a prefixed amount that could not be expressed in percentage of the entire transfer sum. The Court also had doubts as to how such a restriction would serve the previously mentioned purposes.[46]

Last but not least, the Court also found the prohibition of remuneration of intermediaries of minors having the status of licensed players to be unjustified and disproportionate. By refusing the DFB’s argument to draw parallels with legal representation, the Court rather focused on the potential vulnerability of minors and their susceptibility to influence from the intermediaries, making this the crucial argument for (non)justification of the prohibition.[47] Stressing the legitimacy of a special protection of minors, who would due to their age and consequent inexperience rely heavily on the advice of the intermediaries, it also drew the line between the players plying their trade in the first and second league (licensed players) and others who participated in lower leagues. In the latter case a particular attention ought to have been given to minors brought to Germany from abroad.[48] It was only obvious, according to the Court, that minors playing in the lower leagues should benefit from a higher level of protection due to their stronger economic dependency to the intermediaries and hence susceptibility to their instructions. Minor licensed players, however, due to their market position alone warrant no such protection. Moreover, the significant disproportion of the amount of money spent on transfer fees for licensed minors makes such a prohibition in this ambit even more restrictive.[49]

Summed up, the Court deemed three out of six of the claimant’s legal missiles to have hit their target. First, the intermediaries may still be registered with the DFB without subjecting to its authority. Second, the prohibition of flat-rate transfer fees was unjustified, and third, the prohibition of remuneration of intermediaries of licensed minor players also exceeded the borders of necessity.[50] Since an injunction decision required an imminent and pending danger to be substantiated, as anticipated above, the Court circumvented the DFB’s argument that the claimant had almost a year, hence enough time, to get acquainted with the Regulations, by saying that Article 1(2) of the FIFA Regulations merely provided a minimum compulsory basis to be implemented, and that the DFB adopted substantially different Regulations pursuant Article 1(3) of the FIFA Regulations, leaving significantly less time for the claimant to comply.[51] The reference to previous FIFA Regulations met the same end, since the former pertained only to natural and not to legal persons.[52] 

Side-stepping Article 102 TFEU?

While the Court went to significant depths when analysing the case through the prism of Article 101 TFEU, it quite surprisingly almost completely refused to be drawn into the assessment of the matter through Article 102 TFEU, despite admitting, hence quite possibly just elegantly restating Piau,[53] to a possible existence of a collective dominant position by the DFB and its related associations on the market of intermediary service provision.[54] It merely concluded that there was no abuse in the sense of Article 102 TFEU.[55] One may find this curious at the very least, since the Court itself stated that DFB imposed its rules on non-members, intermediaries in this case, through economic pressure stemming from its monopolistic position on the market in question, which could to a certain extent at least be deemed as abusive.[56]

The epilogue or merely the end of Round One?

With the battle dust temporarily subsided, the DFB has seemingly complied with the Court’s injunction decision by issuing a note in which it restated the judgment’s tenor and informed the interested parties (intermediaries) of an ongoing possibility of a non-binding registration with DFB. The truce may only be a temporary one though, since the DFB has through its president already announced to pursue the matter in the main proceedings and a battle won does not necessarily mean that the war has been won.[57] Regardless of the outcome in Germany though, the issue carries a larger relevance. Since some of the DFB Regulations provisions, addressed in the hitherto analyzed injunction decision, resemble to a large extent if not entirely those embedded in the FIFA Regulations (e.g. the suspended Article 7(7) of DFB Regulations and Article 7(8) of FIFA Regulations),[58] one may wonder if, considering the already pending complaint of the of the Association of Football Agents (AFA) to the Commission,[59] legal challenges of the intermediaries regulations in other countries may only be a matter of time. Especially, since apparently these days EU law conveniently happens to be “available in every drug store”.

[1] R. Zemeckis, B. Gale, Back to the Future (Universal Pictures, 1985).

[2] Case C-415/93, Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman ao, [1995] ECR I-04921.

[3] See inter alia Case AZ: 3 Ca 1197/14, Heinz Müller v 1. FSV Mainz 05, Arbeitsgericht Mainz, 19 March 2015 ; Case 2013/11524/A, Daniel Striani ao v UEFA, Tribunal de première instance francophone de Bruxelles, Section Civile, 29 May 2015.

[4] Case Az. 2-06 O 142/15*, Firma Rogon Sportmanagement v Deutschen Fußball-Bund (DFB), Landgericht Frankfurt am Main, 29 April 2015.

[5] DFB-Reglement für Spielvermittlung, adopted on 13 March 2015.

[6] Treaty on the Functioning of the European Union (TFEU), Consolidated Version, O.J. 2012, C326, 26 October 2012 and as amended by the Croatian Accession Treaty, O.J. 2012, L112/1.

[7] FIFA Regulations on Working with Intermediaries, adopted in Zürich on 21 March 2014.

[8] D. Lowen, A guide to the FA’s Regulations on Working with Intermediaries (www.lawinsport.com, 17 February 2015), <http://www.lawinsport.com/articles/item/a-guide-to-the-fa-s-regulations-on-working-with-intermediaries>.

[9] D. Lowen, FIFA’s Regulation on Working with Intermediaries (T.M.C. Asser Instituut – Summer Programme, 30 June 2015), pp. 2.

[10] N. De Marco, The new FA Intermediaries Regulations & disputes likely to arise (www.lawinsport.com, 31 March 2015), <http://www.lawinsport.com/articles/item/the-new-fa-intermediaries-regulations-disputes-likely-to-arise>.

[11] Focus, Streit mit DFB: Gericht gibt Spielervermittler in Teilen Recht (www.focus.de, 30 April 2015), <http://www.focus.de/regional/frankfurt-am-main/fussball-streit-mit-dfb-gericht-gibt-spielervermittler-in-teilen-recht_id_4650008.html>.

[12] Article 1(2) FIFA Regulations, cited supra note 7: ”Associations are required to implement and enforce at least these minimum standards/requirements in accordance with the duties assigned in these regulations, subject to the mandatory laws and any other mandatory national legislative norms applicable to the associations. Associations shall draw up regulations that shall incorporate the principles established in these provisions.”

[13] Rogon v DFB, cited supra note 4, paras. 15-16.

[14] Article 1(3) FIFA Regulations, cited supra note 7: “The right of associations to go beyond these minimum standards/requirements is preserved.”

[15] Arts. 3(2), 3(3) DFB-Reglement für Spielvermittlung, cited supra note 5.

[16] Rogon v DFB, cited supra note 4, paras. 16-17: “Mit dieser Erklärung erkennt der Vermittler das Reglement auch für sich als verbindlich an und unterwirft sich damit der Verbandshoheit des Antragsgegners einschliesslich der Sportgerichtsbarkeit.”

[17] Ibid., para. 19.

[18] Ibid., paras. 32-39.

[19] Gesetz gegen Wettbewerbsbeschränkungen (GWB), (BGBl. I S. 1554), 26.07.2011.

[20] Rogon v DFB, cited supra note 4, paras. 43-45.

[21] Ibid., para. 46.

[22] Case T-193/02, Laurent Piau v Commission, [2005] ECR II-00209, para. 70.

[23] Rogon v DFB, cited supra note 4, para. 50.

[24] Case 71/74, Nederlandse Vereniging voor de fruit- en groentenimporthandel, Nederlandse Bond van grossiers in zuidvruchten en ander geimporteerd fruit "Frubo" v Commission, [1975] ECR 00563, para. 17.

[25] Rogon v DFB, cited supra note 4, para. 51.

[26] Case 123/83, Bureau national interprofessionnel du cognac (BNIC) v Guy Clair, [1985] ECR 00391, para. 17.

[27] Bosman, cited supra note 2, para. 127.

[28] Case C-176/96, Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL v Fédération royale belge des sociétés de basket-ball ASBL (FRBSB), [2000] ECR I-02681, paras. 53-60.

[29] Piau, cited supra note 22, para. 73: “As regards, second, the concept of a decision by an association of undertakings...This is therefore an economic activity involving the provision of services, which does not fall within the scope of the specific nature of sport, as defined by the case-law.”

[30] Ibid.

[31] Rogon v DFB, cited supra note 4, paras. 52-53.

[32] Ibid., para. 55.

[33] Piau, cited supra note 22, paras. 112-115.

[34] Rogon v DFB, cited supra note 4, paras. 57-58.

[35] Case C-309/99, J.C.J. Wouters ao v Algemene Raad van de Nederlandse Orde van Advocaten, [2002] I-01577, para. 95.

[36] Rogon v DFB, cited supra note 4, paras. 59-61.

[37] Case C-519/04 P, David Meca-Medina and Igor Majcen v Commission, [2006] ECR I-06991.

[38] Rogon v DFB, cited supra note 4, paras. 63-64.

[39] Piau, cited supra note 22, paras. 100-104.

[40] Rogon v DFB, cited supra note 4, paras. 66-68.

[41] Ibid., paras. 69-70.

[42] Ibid., paras. 72-73.

[43] Ibid., paras. 75-78.

[44] Ibid., para. 80.

[45] Ibid., paras. 83-84.

[46] Ibid., paras. 86-87.

[47] Ibid., paras. 89-91.

[48] Ibid., para. 93.

[49] Ibid., para. 94: “Für die Vermittlung von Lizenzspielern ist eine derartige Beschränkung allerdings unverhältnismäÿig. Lizenzspieler der ersten und zweiten Bundesliga sind nicht in dem Masse schutzbedürftig wie Vertragsspieler der unteren Ligen.”

[50] Handelsblatt, Gericht gibt Spielervermittler teils recht (www.handelsblatt.com, 30 April 2015),<http://www.handelsblatt.com/sport/fussball/streit-mit-dfb-gericht-gibt spielervermittler-teils recht/11716170.html>.

[51] Rogon v DFB, cited supra note 4, para. 104.

[52] Ibid., para. 105.

[53] Piau, cited supra note 22, paras. 117-118

[54] Rogon v DFB, cited supra note 4, paras. 98-99.

[55] Rogon v DFB, cited supra note 4, para. 100.

[56] Ibid., para. 96: “Hier geht es jedoch darum, dass die Antragsgegnerin aufgrund ihrer Monopolstellung Dritte faktisch in die Verbandsherrschaft zwingt, indem sie Verbandsangehörige mit Sanktionen bedroht, sollten diese nicht auf die Antragstellerin im Sinne einer Zustimmung zur Vermittlererklärung einwirken. Insofern fehlt es an der freiwilligen Unterwerfung; es handelt sich vielmehr um eine durch wirtschaftlichen Druck erzwungene Unterwerfung eines nicht verbandsangehörigen Dritten.”

[57] Hamburger Abendblatt, Landgericht bestätigt teilweise neue Spielerberater-Regeln (www.abendblatt.de, 30 April 2015), <http://www.abendblatt.de/sport/article205286615/Landgericht-bestaetigt-teilweise-neue-Spielerberater-Regeln.html>.

[58] Article 7(8) FIFA Regulations, cited supra note 7: “Players and/or clubs that engage the services of an intermediary when negotiating an employment contract and/or a transfer agreement are prohibited from making any payments to such intermediary if the player concerned is a minor ...”

[59] D. Lowen, cited supra, note 8.

Editor’s Note: Emre Bilginoglu[1] is an attorney in Istanbul and the co-founder of the Turkish E-Sports Players Association, a non-profit based in Istanbul that aims to provide assistance to professional gamers and to work on the relevant laws affecting them. 

The world is witnessing the rise of a new sport that is growing at an incredible speed: E-Sports. We are only starting to understand its legal implications and challenges.

In recent years, E-Sports has managed to attract thousands of fans to arenas to see a group of people play a video game. These people are literally professional gamers (cyber athletes)[2] who make money by competing in tournaments. Not all video games have tournaments in which professional players compete against each other.

The most played games in E-Sports competitions are League of Legends (LoL), Defense of the Ancients 2 (DotA 2) and Counter-Strike: Global Offensive (CS:GO). LoL and DotA are both Multiplayer online battle arena (MOBA) games, a genre of strategy video games in which the player controls a single character in one of two teams. The goal of the game is to destroy the opponent’s main structure. CS:GO is a first-person shooter (FPS) game, a genre of video games where the player engages combat through a first-person perspective. The main objective in CS:GO is to eliminate the opposing team or to terrorize or counter-terrorize, planting bombs or rescuing hostages. Other games that have (popular) E-Sports competitions include Starcraft II (real time strategy), Hearthstone (collectible card video game), Call of Duty (FPS) and FIFA (football).

The gaming requires cooperation between team players, a high level of concentration, rapid reactions and some seriously fast clicking. E-Sports is a groovy term to describe organized competitive computer gaming. The E-Sports industry is exponentially growing, amounting to values expressed in billions of dollars. According to Newzoo, a website dedicated to the collection of E-Sports data, there are some 250 million occasional viewers of E-Sports with Asia-Pacific accounting for half of the total amount. The growth of the industry is indubitably supported by online streaming media platforms. This article aims to explain what E-Sports is and to give the readers an insight on the key legal questions raised by it. 

Is E-Sports a Sport?

The introductory legal question regarding E-Sports is whether it is a sport. There are different definitions of “sport”. According to the Council of Europe, “sport” means all forms of physical activity which, through casual or organised participation, aim at expressing or improving physical fitness and mental well-being, forming social relationships or obtaining results in competition at all levels.

SportAccord a non-profit association which is composed of autonomous and independent international sports federations and other international organisations contributing to sport in various fields, also offers a definition of sport. According to this definition, sport:

1) includes an element of competition;

2) does not rely on any element of “luck” specifically integrated into the sport;

3) does not pose an undue risk to the health and safety of its athletes or participants;

4) is in no way harmful to any living creature;

5) and does not rely on equipment that is provided by a single supplier.

Sport categories designated by SportAccord are primarily: physical sports (e.g. basketball); mind sports (e.g. chess); motorized sports (e.g. motorcycle racing); coordination sports (e.g. snooker); and animal-supported sports (e.g. equestrianism).

SportAccord also states that activities with limited physical or athletic activity would be carefully considered. E-Sports indeed involves a limited physical activity. The professional gamer generally sits in front of a designated computer. However, at this point it is important to highlight the existence of multiplayer video games that involve a considerable amount of physical activity. Home video game consoles that detect movement were released in early 2000s, paving the way for true E-Sports cyber athletes in the near future. Until now however, games that require physical activity have not been played at a professional level.

Having said this, E-Sports does involve a clear element of competition, does not rely only on luck, does not pose an undue risk to the health and safety of its competitors and is not harmful to any living creature. At some point, it does rely on equipment that is provided by a single supplier, as the subject game that is played is in general produced by a single supplier. In other words, E-Sports clearly complies with the remaining criteria (2 to 5) suggested to be defined as a “sport”.

Even though there are a myriad of multiplayer games, one mostly categorizes E-Sports as a primarily mind and coordinated sport. It does not require lots of physical activities except for very fast finger movement. A similar sport is chess. It is challenging to oppose the argument of David Papineau, professor of philosophy of science at King’s College London, who, as regards chess, said that “(t)he activity is playing a game, therefore it is not a sport but a game”. However, chess is a strategy board game and at the same time it is an organized sport with an international governing body, namely FIDE.

Can E-Sports Be an Olympic Sport?
The International Olympic Committee (IOC) is the supreme authority of the Olympic movement. The IOC decides which sports are included in the Olympic Games. Choices of the IOC always bring forth discussions and debates in the sports community. Some sports are discontinued and some are re-introduced. Wrestling was announced to be dropped from the 2020 Olympic Games in 2020, but was reinstated seven months after losing its place. Even though wrestling is one of the founding sports of the Olympics, the IOC could have removed it from the Olympic Games. The IOC recently reinstated baseball and softball, and added skateboarding -, karate, climbing and surfing- to the sports programme for the Olympic Games in Tokyo 2020. Therefore, it is possible to say that popularity is one of the crucial elements for a sport to be included to the Olympic Games. Chess, led by FIDE, is attempting to be an Olympic Sport. Although the attempt for Tokyo 2020 was not successful, things may change in the future.

In my opinion, E-Sports can very well be regarded as an Olympic sport in the near future. Whatever game that is played on a professional level, may be regarded as its discipline. The crucial setback is the perishability of games. Video games become “obsolete” with time. This is especially the case with sports games. Squads and the game play changes every season. That is one of the reasons why FIFA releases a new video game every single year. Therefore, video games such as FIFA are unlikely to make it to the top E-Sports games awarding prize money.

What type of Governance for E-Sports ?

The formation of a single internationally recognized E-Sports federation would be a first step in a long journey to reach the Olympics. Currently however, several international E-Sports organizations exist.

In South Korea, where E-Sports is what football is to Brazil, the South Korean E-Sports Association was founded in 2000. The Association regulates the working conditions of cyber athletes. The highest earnings in E-Sports by countries are listed as: China, the United States, South Korea, Sweden and Canada. As for international associations, three of them need to be mentioned.

First, there is the World E-Sports Association (WESA), founded in 2016 by a group of E-Sports teams and ESL (i.e. largest video game event company in the world). WESA aims to professionalize the industry, regulating matters regarding revenues and schedules. WESA even has an internal arbitration court, namely WESA Arbitration Court. It operates independently from WESA and is open to everyone involved in E-Sports, such as players, teams, organizers and publishers.

The second is the International e-Sports Federation (IeSF), an international organization based in Seoul, South Korea. A total of 46 nations are member of the IeSF. It has listed seven objectives in its Statute, the first one being as follows: to “constantly improve e-Sports and promote it in the light of its values - humanitarian, educational, cultural, unity of purpose and ability to promote peace”. IeSF is a signatory of the World Anti-Doping Code (WADC). ESL also endorsed the WADC and conducts doping tests on cyber athletes. Stimulants- drugs that improve reaction time and concentration are prohibited.

The third association worth mentioning is the International eGames Committee (IEGC), a non-profit E-Sports organization, supported by the government of the United Kingdom. It aims to positively shape the future of competitive gaming.

In my view, countries that seek to be a part of the E-Sports world should establish their own national federations and apply to IeSF. IeSF should collaborate with WESA, which is founded by the most significant organizations in the industry. IeSF is capable of growing into an internationally recognized authority that is in charge of international competitions between national teams, whereas WESA would be in charge of all competitions between clubs.

E-Sports and Free Speech
Since there is a certain amount of (virtual) killing and planting bombs involved, some games are not suitable for children. Deciding who can play which game is up to certain institutions around the world. One of them is Pan European Game Information (PEGI). PEGI is the age rating system for video games in Europe, Israel and Quebec. The Entertainment Software Rating Board (ESRB) is another institution providing an age rating system for video games, this time for North America. PEGI and ESRB standards are generally not legally binding. PEGI standards are legally enforced in few jurisdictions, one being the United Kingdom. Another example is Austria. In Austria, protection of minors are implemented by states. Two of the nine states, Vienna and Carinthia, legally adopted PEGI standards.

California passed a law that prohibited the sale of certain video games to minors. It was struck down by the U.S. Supreme Court. The Supreme Court ruled that video games were protected speech under the First Amendment.[3] The Supreme Court had its own reasons, such as “Psychological studies purporting to show a connection between exposure to violent video games and harmful effects on children do not prove that such exposure causes minors to act aggressively.” or “This country has no tradition of specially restricting children’s access to depictions of violence.”

E-Sports and IP Law
Apart from constitutional law, video games can be subject to other fields of the law. Intellectual property law is one of such fields. For example, DotA is a fan-made custom map originated with Warcraft III, a strategy video game created by Blizzard Entertainment. It was not a separate game until published by Valve Corporation as Dota 2. Blizzard sought to prevent registration by its competitor Valve of the trademark Dota by resorting to the United States Patent and Trademark Office. Subsequently, Blizzard and Valve reached a settlement agreement and Valve went on to publish Dota 2.

Playing Dota 2 is free of charge and Valve speedily hosted its first competition in 2011, with a prize pool of 1.6 million dollars. The International became an annual Dota 2 E-Sports tournament. The prize pool for the tournament in 2016 was approximately 20 million dollars. The team Wings Gaming of China completed the tournament in first place and was awarded 9.1 million dollars. The final was viewed by almost 6 million spectators. Dota 2 tournaments have awarded a total prize money of approximately 90 million dollars so far. League of Legends took the second place with 36 million dollars, followed by Counter Strike: GO (nearly 27 million dollars) and Starcraft II (nearly 22 million dollars). 

E-Sports Clubs, Athletes and the Law
The E-Sports teams that participate in these kind of high level competitions have different rosters for different games. They are starting to become more and more important business entities with their superstar players. The teams are mainly sponsored by tech firms, consumer electronics companies, gaming equipment producers, web hosting companies, automobile manufacturers, energy drinks manufacturers and business people who dream of owning a sports team but who cannot afford to acquire a professional football club. Football clubs themselves are also keen on forming their own E-Sports club, not only limited to football games. PSG (FIFA, LoL, Starcraft, CS, Call of Duty and Hearthstone) Schalke 04 (LoL) and Manchester City (FIFA) have already signed their own E-Sports players. Besiktas was the first football club in the world to form an E-Sports team in 2015. Fenerbahce has also entered the arena in 2016 and will be competing in the upcoming Turkish League of Legends season with a roster of accomplished players. As for football, FIFA and EA Sports organise the FIFA Interactive World Cup 2017. FIFA announced that the winning prize would be 200 thousand dollars.

High level cyber athletes are mostly men. However, the industry is trying to tackle gender discrimination and promote women cyber athletes. Cyber athletes sign contracts with their teams and sometimes receive salaries from video game developers. The developer of League of Legends, Riot Games chooses to pay salaries to competitors. Cyber athletes may want to make some extra money by streaming on online platforms, an important issue while drafting a contract. Therefore, E-Sports concerns both labor law and contract law. It also concerns criminal law, as there have been several incidents of betting-related match-fixing in E-Sports. In one such case, the manager of a LoL club was inciting his players to lose against big teams, claiming that the organizers would kick them out of the league should they win. The players allegedly did so, believing their manager. In the end, the manager was found to be betting against his own team, which finished the season with no wins. A player of the team attempted suicide, leaping off a building. Fortunately, he survived. In another case, a Dota 2 player placed a bet against his own team in a major event and won $322. “322” is now a nickname for players who deliberately fail in a game.

In Turkey, where I practice law, E-Sports players became athletes licensed by the “Federation of Developing Sports”, established by the Sports Ministry. There are about three thousand licensed players. The level of professionalism in elite clubs is surprising, and they are actually pretty successful in international tournaments. Space Soldiers (CS:GO), SuperMassive (LoL) are followed by tens of thousands of fans, even though they were founded only a few years ago.

The primary concern of the athletes and their families in general is the lack of opportunities after their brief but intense careers. Successful cyber athletes require a superordinate level of reactions and excellent reflexes. These attributes become slower with time. Consequently, cyber athletes are usually active between the ages 18-23. It is arduous for them to find time to study, as they need at least eight hours of training per day. National legislators around the world should also focus on devising E-Sports regulations, as more and more professional contracts are being signed. Cyber athletes are transferred from clubs to other clubs as in any other sport and foreign cyber athletes may encounter problems regarding their visas. France recently tackled the legal vacuum and granted a specific legal status for cyber athletes.

Conclusion
Call it a sport or not, E-Sports is growing exponentially. It is an industry worth billions and watched by millions. Although the industry is a commercial success, there are still lots of legal issues to tackle. These legal issues fall within the scope of various fields of law causing lawyers to work on improving their respective national laws.

Transfers of cyber athletes, drafting contracts for cyber athletes and the resolution of contractual disputes are some of the key issues, as well as tackling doping and match-fixing, intellectual property rights, broadcasting rights in particular, and the exploitation of minors or professional gamers. WESA and IeSF are significant international organizations that can endeavor on unifying E-Sports regulations and tackling legal problems faced by the players and the clubs.

The 21st century will offer more new games to play. Considering the current growth in the industry, I would dare predict that the industry will be worth hundreds of billions in the near future. I would recommend the countries and E-Sports governing bodies leading the industry to work together and bring forth certain essential regulations. This would also benefit game developers, as their games and gamers would find a place in the industry on a legal basis. I would also suggest the industry to incite women cyber athletes and facilitate their involvement in professional competitions, so that possible instances of discrimination are proactively precluded.

[1] Nurettin Emre Bilginoglu, LLM, Attorney-at-law - Istanbul, Turkey.  E-mail: emre@caglayanyalcin.com.

[2] Although there is no precise definition of a “professional E-Sports player”, the approach of FIFA could be deemed applicable by analogy. According to Article 2 of FIFA Regulations on the Status and Transfer of Players, a professional is a player who has a written contract with a club and is paid more for his footballing activity than the expenses he effectively incurs. In E-Sports, certain players are paid more for their gaming activities than the expenses they incur.

[3] Brown v. Entertainment Merchants Association, 564 U.S. 786 (2011).

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

1        Introduction

The International Olympic Committee (IOC), after many years of ineffective pushback (see here, here and here) over bye law 3 of rule 40[1] of the Olympic Charter (OC), which restricts the ability of athletes and their entourage to advertise themselves during the ‘blackout’ period’[2] (also known as the ‘frozen period’) of the Olympic Games, may have been gifted a silver bullet to address a major criticism of its rules. This (potentially) magic formula was handed down in a relatively recent decision of the Bundeskartellamt, the German competition law authority, which elucidated how restrictions to athletes’ advertisements during the frozen period may be scrutinized under EU competition law. The following blog begins by explaining the historical and economic context of rule 40 followed by the facts that led to the decision of the Bundeskartellamt. With this background, the decision of the Bundeskartellamt is analyzed to show to what extent it may serve as a model for EU competition law authorities.

2        Rule 40 in Context

Before dissecting the decision, the considerable impact of the IOC’s rule 40 and its implementation by national Olympic committees (NOCs) must be emphasized. Many athletes look to the Olympic Games as a unique opportunity to gain exposure and benefit financially from their accomplishments, especially considering that many athletes who qualify for the Olympic Games struggle to make a living from their sport. Athletes are greatly reliant on external funding, particularly from sponsors, to fund their career.[3] To further complicate matters, many sports only enjoy a meaningful spotlight during the Olympic Games. Hence, athletes in those sports view the Games as an unparalleled occasion to become known to a wider public and gain new sponsors. So, why does the IOC restrict these opportunities?

Rule 40’s existence is principally due to The Olympic Partner Programme (TOP), a closed group of thirteen sponsors, which was created in 1985 with the aim of diversifying and securing greater means of funding for the Olympic Games.  It was the brainchild of Michael Payne who has defended the importance of preserving the ‘value of the Olympic sponsorship program’ to prevent a return to the days where the funding of the Games was highly dependent on ticket sales.[4] For the IOC, preserving the value of TOP has meant taking aggressive actions against ambush marketing, which according to Payne is ‘any communication or activity that implies, or from which one could reasonably infer, that an organisation is associated with an event, when in fact it is not’. Payne describes the ways in which the IOC has attempted to tackle ambush marketing, which includes educating the public about ambush marketing, preventing ambush marketing through prohibiting non-sponsor association and controlling Olympic imagery among other methods, and finally legal action, which according to Payne, ‘the mere threat of this is often enough to bring the offending party into line’. In this view, rule 40 can mainly be categorized as a preventative measure.

Rule 40 has also experienced an evolution ever since it was first introduced in 1991 into the OC, which has also meant that ‘defining the scope of rule 40 and understanding its nuances is a process that evolves with each iteration of the games’.[5] Although rule 40 has recently moved from a general ban on advertising with limited exceptions into allowing it under severe restrictions, it remains to be seen whether the IOC will fundamentally rethink the conditions applied to athlete advertising. Meanwhile, athletes, who were partly the initiators of the complaint to the Bundeskartellamt, have perhaps realized that public awareness campaigns have not brought about the drastic change they had hoped for. In the present case, the Bundeskartellamt’s attention was drawn to rule 40 OC after a complaint from Athleten Deutschland (German Athlete Commission) and Bundesverband der Deutschen Sportartikelindustrie (Federal Association of the German Sports Goods Industry).

3        Background to the Decision

Before examining the substance of the Bundeskartellamt’s decision, it is important to understand that rule 40, as it was analyzed in the decision, was the one that was in place in the lead up to the Rio 2016 Games.[6] It states:

 “Except as permitted by the IOC Executive Board, no competitor, team official or other team personnel who participates in the Olympic Games may allow his person, name, picture, or sports performances to be used for advertising purposes during the Olympic Games.”

In other words, a general ban on advertisement with limited exceptions. The applicable conditions meant that only athletes with TOP sponsors could launch an advertising campaign during the Rio 2016 Olympic Games and ongoing campaigns from non-TOP sponsors were subject to authorization. Further complicating the matter, NOCs could introduce additional restrictions or opt-out completely from allowing their athletes to advertise during the frozen period.[7] The German Olympic Sports Federation (DOSB), in its 2016 guidelines[AD1]  (page 78), distinguished between DOSB sponsors, Olympic sponsors and non-Olympic sponsors.[8] In the case of non-Olympic sponsors, ‘only advertising activities which had started at least three months prior to the Olympic Games had a chance of being approved’, which means potential sponsors needed to have early concepts ready before that date (early April). It should also be noted that at that time, the DOSB had not yet nominated any athletes for the Olympic Games. In addition to the deadlines, references to the Olympic Movement were strictly forbidden, which included an incredibly broad list of words and phrases.[9] If they wanted to participate in the Games, athletes were forced to subscribe to these rules via the athlete agreement (page 83) [AD2] and any breach could imply sanctions, which included removal from the Olympic Team.[10]

The conditions that these rules impose is succinctly summarized by Grady who explains that though the IOC claimed it had relaxed its rules, it ‘did not create the kinds of opportunities that the IOC may have envisioned’, which in effect ‘precluded almost all but the most powerful global brands from taking full advantage of the ability to feature Olympic athletes during the Games’, a view that was acknowledged by the Bundeskartellamt.[11]

4        The Bundeskartellamt’s Decision

Although the present case was resolved through the commitments made by the IOC, the Bundeskartellamt still provided a preliminary assessment concerning the relevant market, the abuse of a dominant position, possible justifications, and proportionality, which are analyzed below.

4.1       Relevant Market

Having decided to resolve the case on the basis of Article 102 TFEU,[12] the Bundeskartellamt identified the relevant market on the basis of a ‘modified concept of demand-side substitutability’ and defined the market as the ‘market for the organisation and marketing of the Olympic Games’.[13] It considered that the Olympic Games was an event that differed from other major sport events from the consumers’ point of view because of the wide variety of sports that are covered and because certain sports which perhaps are not normally broadcasted in a particular country receive extensive media coverage during the Games.[14] The Bundeskartellamt supported its analysis of the relevant market by referring to MOTOE in which the CJEU also defined the ‘relevant product market for the organisation (and marketing) of sports events according to the type of sport’.[15] Lastly, it found that the athletes participating in the Games to be ‘customers of the organisation and marketing of sport events’.[16] ‘Other well-known competitions’ could be considered as an alternative for certain athletes, however, many athletes practice sports that receive very little media attention outside the Games, meaning that overall the substitutability between the Olympic Games and other major sports events is limited.[17]

4.2       An Abuse of a Dominant Position

Next, the Bundeskartellamt considered the members of the Olympic Movement to be in a collectively dominant position in the aforementioned market and deemed them to be undertakings regardless of the fact that they do not make a profit.[18] It also asserted that the members of the Olympic Movement were abusing their dominant position, hindering effective competition, for several reasons. First, the registration deadlines to request authorization were set too early since athletes did not know whether they were even going to the Olympics in the first place. Moreover, the Bundeskartellamt ruled that the very use of registration and authorization criteria could have a prohibitive effect for certain kinds of advertisements. Even though ‘ongoing’ advertisement could be approved, it was still subject to restrictions since it could not use any ‘designations and symbols as well as images and videos’ connected to the Olympic Games.[19] As stated earlier, these are very extensive and make it ‘difficult to market an athlete’s participation in the Olympic Games’.[20] In the end, the sanctions that athletes could face exacerbated the restriction on competition, especially since the sanctions had no proportionality requirements and an appeal could only be made to the CAS.[21]

4.3       Justifications

At this point the Bundeskartellamt moved to make a preliminary assessment as to whether the abuse of the dominant position inherently pursued legitimate objectives and whether the restriction is proportionate to its claimed objective (the Wouters test[22]).  It is interesting to note that the Bundeskartellamt decided to apply the Wouters test to an Article 102 TFEU case and expressly stated that ‘it is to be assumed that the criteria are also meant to apply with regard to the applicability of Art. 82 EC’ (now Article 102 TFEU) in referring to the CJEU’s Meca-Medina case.[23]  Only one of the pursued objectives of the IOC was considered legitimate, while all the others, including ‘preserving the financial stability and sustainability of the Olympic Movement and the Olympic Games’, ‘preserving the value of the Olympic brand to finance the Olympic solidarity model’, and ‘preventing the excessive commercialisation of the Olympic Games’, were not found to be legitimate.[24] The three rejected objectives reflects the decisional practice of the Commission and the CJEU that ‘economic aims cannot justify restrictions’, which the Bundeskartellamt directly acknowledges.[25] This is why it is interesting that the Bundeskartellamt then found that the ‘prevention of ambush marketing during the frozen period in order to safeguard the funding of the Olympic Games, facilitated in part by Olympic sponsorship programmes, and thus to ensure that the Games can be held on a regular basis’ as the only legitimate objective.[26]

A literal reading of this aim seemingly exposes an economic dimension since the IOC wishes to protect TOP and as a consequence, its own budget. However, the Bundeskartellamt was convinced by the IOC’s contention that this was no economic objective,[27] since the ultimate aim of the objective is to ensure the Olympic Games’ consistent occurrence. It could be argued that there are in fact two objectives mangled into one: (1) the prevention of ambush marketing to protect TOP (an economically motivated objective) and (2) ensuring the regular occurrence of the Games (a non-economically motivated objective). The Bundeskartellamt decided to not disentangle the two and accepted that they were in fact one inseparable objective, whereby the latter sub-objective ultimately sidelines the economic dimension of the first. On the other hand, the CJEU’s case law on economic justifications has not been entirely consistent and there has been occasions where it has accepted economic justifications.[28] Furthermore, an efficiency defense could also allow for economic justifications in which the IOC could argue that preventing ambush marketing in order to protect TOP benefits consumers, outweighing any negative effects to competition.[29] In the end, it might be desirable that any future analysis of this dual objective at least acknowledge that there is an underlying economic interest. [TT3] 

4.4       Proportionality

Before analyzing the proportionality of the measure in terms of the prevention of ambush marketing, the Bundeskartellamt defined ambush marketing as ‘the planned endeavour of a company, which is not an official sponsor of a major (sports) event, to attract public attention to its own business by means of marketing activities related to the event, and thus to profit from the communication performance of the event (e.g. high profile, image) without making a financial contribution’.[30] In the corresponding footnote, the Bundeskartellamt makes reference to the definitions of ambush marketing on Wikipedia, which upon closer inspection is taken from Manuela Sachse’s book Negative Kommunikationseffekte von Sponsoring und Ambush-Marketing bei Sportgroßveranstaltungen. It is rather unfortunate that the Bundeskartellamt did not elaborate on why it chose this particular definition of ambush marketing.

Nonetheless, on the formal aspects, the Bundeskartellamt held that the DOSB’s pre-authorization scheme for individual advertisements was disproportionate, especially due to the deadlines. Moving to substantive aspects, it maintained that individual advertisement could only be prohibited if it violated specific legal provisions such as intellectual property rights or specific contractual obligations.[31] Violations of property rights ‘only exist in cases where the public perception is that there are economic and organisation relations between the owner of the property rights and the company which uses Olympic designations’, referring to the jurisprudence of the German Federal Court of Justice.[32] The Bundeskartellamt makes reference to the reasonably well-informed consumer standard, which is also recognized in EU law,[33] to explain that consumers are able to differentiate between ‘a sponsor’s advertising and a reference to the Olympic Games in a promotional context’ and that simply a positive association or temporal connection with the Olympic Games and Olympic Movement is not a violation of intellectual property rights.[34] In this regard, the Bundeskartellamt only found prohibiting the use of ‘Team Deutschland’ during the Olympic Games and the use of ‘a combination of the respective location and the year’, e.g. Rio 2016, during the frozen period to be proportionate, while finding the other restrictions to be disproportionate.[35] In terms of the restrictions on photos and social media posts, the Bundeskartellamt held that the general prohibition of taking photos at Olympic venues for individual advertising measures and posts on social media accounts that do not have any protected ‘designations or symbols’ to be disproportionate.[36]

Ultimately, the sanctions, in particular sporting sanctions, were judged to be disproportionate because of their potential impact on athletes’ careers, since they could affect the athletes existing and future sponsorship opportunities and a competition ban could also, depending on the athlete’s age and the ban’s length, end an athlete’s career. The very existence of sporting sanctions could have a ‘deterrent effect’.[37] Additionally, the CAS’ exclusive jurisdiction over disputes could jeopardize the effectiveness of competition law since ‘there is no guarantee that the parties’ action against an athlete will also be subject to judicial review under European antitrust law’, especially when considering that neither the Swiss or German courts would conduct such a review in an action against the enforcement of the award.[38]  Sports sanctions are also typically carried out by the sport bodies themselves, without intervention of public bodies. Interestingly, the Bundeskartellamt acknowledged the German athletes’ position that the CAS proceedings were longer and more costly than proceedings in front of German courts, which directly contradicts the IOC’s claimed benefits of sports arbitration.[39]

5        The Commitments and Potential for Further Intervention Under EU law

After two rounds of negotiations, the DOSB was able to put an end to its infringements by making several commitments that brought its policy on athlete advertisement into line with the Bundeskartellamt’s findings. The commitments submitted after the first round did not go far enough to quell the competition concerns and most sponsors and athletes found ‘little or no improvement in the modified guidelines’. The original commitments were deemed to be too restrictive on the protected Olympic related terms, not provide sufficient opportunities for advertising on social media, not sufficiently delineate the responsibilities of the different parties, and the exclusive jurisdiction of the CAS coupled with sporting sanctions continued to have ‘a strong deterrent effect’.[40] After the second round of negotiations, the most important  commitments included: (1) no more authorization required for advertisements during the frozen period and instead athletes can request that the DOSB review planned advertisements beforehand to confirm if it meets the admissibility criteria; (2) advertisement campaigns may now be launched during the frozen period; (3) pictures of athletes during Olympic competitions may be used for advertisement so long as it does not include protected Olympic logos, symbols or designations; (4) videos[41] are restricted only to the German House, the Olympic village or the back of house areas and (5) sports related sanctions are no longer available (only economic sanctions are possible) and athletes may have recourse to German courts. All in all, the new Guidelines will allow athletes to advertise during the Games provided that they observe certain restrictions that mainly relate to intellectual property rights.[42] This compromise fosters a far better balance between the IOC’s interests to protect the value of the Games and TOP and the athletes’ wish to expand their financial opportunities during perhaps the most important time of their careers.

The analysis undertaken by the Bundeskartelamt is likely to influence any future intervention of the European Commission on this issue. After all, it is quite possible that the Commission may have to take action since the Bundeskartellamt’s decision ‘is enforceable only as regards individual advertising and marketing activities of German Olympic athletes on the German market’. In doing so, the Commission may have to elaborate whether a pre-authorization scheme for advertisements with reasonable deadlines could be compatible with EU law and perhaps further scrutinize the definition of ambush marketing and potential objective justifications that are completely void of an economic motive. The Commission would likely evaluate any advertisement pre-authorization regime in light of the ISU criteria.[43] From a pure competition law perspective, it could also be an opportunity for the Commission and ultimately the CJEU to expressly confirm whether the Wouters test extends to Article 102 TFEU.

Regardless, Commissioner Verstager explained that this is ‘an example of the way the network operates, with the Commission and the German competition authority working closely together’. She also underlined that the Bundeskartellamt’s decision could ‘create incentives for a change of the relevant rules at national and international level, with the Commission following closely any developments in this direction’. Thus, the possibility that the Commission will at some point intervene seems dependent on how seriously the IOC takes this decision. In the meantime, British athletes have also threatened legal action on the basis of EU competition law against the British Olympic Association over its implementation of rule 40, which demonstrates the ongoing nature of this saga.

6        Conclusion

The Bundeskartellamt’s narrow interpretation of ambush marketing and emphasis on the protection of intellectual property rights will most likely influence the IOC’s strategy to protect the value of TOP. For example, it could prompt the IOC to place greater efforts into expanding its protected properties. Nevertheless, the IOC’s war against ambush marketing has widened from its original concept and even Michael Payne has been one to express his concern about the extent to which the IOC has gone in order to protect TOP and has expressed the need to apply the rules with ‘balance and common sense’. Albeit these comments were made concerning the rules for ‘clean’ venues at the London 2012 Summer Olympics, there is a certain resonance to the present situation and begs the question whether drastically restricting athletes in their often one-time chance to earn decent money through sponsoring is absolutely necessary to protect the economic viability of the Olympics as a whole.

[1] When the blog refers to rule 40, it refers specifically to bye law 3 of rule 40 OC.

[2] The ‘blackout’ period starts 9 days before the Olympic Game’s opening ceremony to 3 days after the closing ceremony.

[3] Nicholas Gary Schlereth and Evan Frederick, ‘Going for Gold: Social Media and the USOC’ [2017] 27 Journal of Legal Aspects of Sport 19.

[4] Michael Payne, ‘Ambush Marketing: The Undeserved Advantage’ [1998] 15 Psychology and Marketing 323.

[5] John Grady, ‘Analyzing Rule 40’s Restrictions on Using Atheletes in Olympic Sponsorship at Rio 2016’ [2017] 15 Entertainment and Sports Law Journal 1.

[6] Bundeskartellamt, Decision pursuant to Section 32b GWB Public version, B-226/17 (February 25, 2019) para 3.

[7] ibid para 5.

[8] ibid para 7.

[9] See ibid para 8 for examples.

[10] ibid para 11 and 65.

[11] Grady (n 7) and ibid para 69.

[12] Decision pursuant to Section 32b GWB Public version, B-226/17 (n 3) para 41.

[13] ibid para 44 and 56.

[14] ibid para 46-47.

[15] ibid para 46.

[16] ibid para 53.

[17] ibid para 54.

[18] ibid para 58-63.

[19] ibid para 71.

[20] ibid.

[21] ibid para 75-76.

[22] Case C-309/99 Wouters and Others [2002] ECLI:EU:C:2002:98, para 97.

[23] See Decision pursuant to Section 32b GWB Public version, B-226/17 (n 3) footnote 52.

[24] ibid para 102-105.

[25] See International Skating Union’s Eligibility rules (CASE AT. 40208) [2017] C(2017) 8240, footnote 350 and ibid para 95.

[26] Decision pursuant to Section 32b GWB Public version, B-226/17 (n 3) para 96.

[27] ibid para 27.

[28] For an exploration of accepted economic objectives see Sue Arrowsmith, ‘Rethinking the Approach to Economic Justifications under the EU's Free Movement Rules’ [2015] 69 Current Legal Problems 307.

[29] See for example, Case C-209/10 Post Danmark A/S v Konkurrencerådet [2012] ECLI:EU:C:2012:172, para 41-42.

[30] ibid para 97.

[31] ibid para 108-109.

[32] ibid para 110, referring to Federal Court of Justice, judgment of 15 May 2014 – I ZR 131/13, Olympia-Rabatt.

[33] Case C-210/96 Gut Springenheide and Tusky v Oberkreisdirektor des Kreises Steinfurt [1998] ECLI:EU:C:1998:369, para 31.

[34] Decision pursuant to Section 32b GWB Public version, B-226/17 (n 3) para 110-111.

[35] ibid para 115-118.

[36] ibid 119-120.

[37] ibid para 122.

[38] ibid para 124.

[39] ibid para 124.

[40] ibid para 128.

[41] Protected Olympic logos, symbols or designations are also not allowed in videos.

[42] Decision pursuant to Section 32b GWB Public version, B-226/17 (n 3) para 136-148.

[43] A pre-authorization scheme must (a) ‘provide for sanctions and authorization criteria that are inherent in the pursuit of legitimate objectives’, (b) ‘provide for objective, transparent and non-discriminatory sanctions and authorization criteria’ that are proportionate to its objectives, and (c) ‘provide for an objective, transparent and non-discriminatory procedure for the adoption and effective review of decisions’.

Join us for the first online version of our unique training programme on ‘Sport and human rights’ jointly organised by the Centre for Sport and Human Rights and the Asser Institute taking place on May 22-24 & May 27-29.

After the success of the first editions in 2022 and 2023 the programme returns, focusing on the link between the sport and human rights and zooming in on a number of topics, such as the UN Guiding Principles for Business and Human Rights and their application in sports. We will also adopt a human rights lens to sport governance and address freedom of speech, the rights of athletes, and access to remedy.

Tackling contemporary human rights challenges in sport

The programme brings together the latest in academic research with practical experiences from working in the field in an interactive package, fostering productive exchanges between the speakers and participants. Theoretical knowledge will be complemented by exposure to hands-on know-how.

Participants will have the opportunity to learn from experts from the Asser Institute, the Centre for Sport and Human Rights, and high-profile external speakers from both academia and practice.

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• An extensive introduction to the emergence of the sport and human rights movement
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• The opportunity to engage in discussions and network with leading academics and professionals

Topics addressed in this summer programme include:

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