Article by Ampersand's Eoghainn Maclean.
Now could be the time for “Rangers” to take the English Football League (EFL), the English Premier League (EPL) and any other opposing football authorities to court under UK competition law for orders forcing their entry to English domestic leagues.
No competition case is “easy” and Rangers would need to gather the necessary economic and other evidence. In my opinion, however, they would have a good prospect of success and of emulating Jean-Marc Bosman in overturning football's anti-competitive practices.
Essentially, in competition law, Rangers is a business undertaking and should be free to provide its services as a football club to the buyers of such services anywhere in the UK. The buyers are, principally, the organisers of domestic football league tournaments, who distribute shares of revenue in return. EFL & EPL are cartels that abuse their dominant position on UK football markets through rules which exclude clubs that do not play their home games in England or Wales.
Rangers’s case would be founded on two pillars of UK competition law, which are applied in accordance with EU law and are directly enforceable by individual undertakings in the ordinary courts.
The first is the prohibition against agreements, or concerted practices, between undertakings or decisions of associations of undertakings which substantially restrict competition within the UK or part of it (Chapter I of the Competition Act 1998).
The Second is the prohibition against abuse by one or more undertakings of a dominant position on a market which restricts competition on that market or another directly affected market, in the UK or part of it (Chapter II of the 1998 Act).
The EFL & EPL are collectively dominant in the UK on the market for the provision of the services of organisation and promotion football league tournaments, on which they purchase the services of professional clubs, in exchange for shares of revenue, made up, principally, of broadcast income.
On that market the EFL & EPL form a “buyer’s”, rather than a “seller’s”, cartel so their market share is measured by the amount of purchasing they do. It seems clear that they distribute more than 40% of all such revenues distributed by all such organisers in the UK, which is the accepted upper threshold for establishing certain dominance under the second prohibition. 25% is the accepted upper threshold for establishing a “substantial restriction” of competition under the first prohibition.
The EFL & EPL’s rules, along with those of other football bodies such as SPL, SFA, FA, UEFA and FIFA, effectively limit Rangers to playing all their domestic football only within the territory in which they play their home games, namely, Scotland.
That is a hard core competition abuse and Rangers would have a good case in principle.
Success in national courts in competition cases challenging sporting organisations is, by no means, unprecedented. The Bosman case is a prime example. In Hendry v World Professional Billiards & Snooker Association, 2002 ECC 8, Stephen Hendry and others challenged the WPBSA’s rule that prevented him from taking part in any snooker event not sanctioned by the Association. Hendry wanted to set up rival tour events. He founded on the same pillars of UK competition law and after a long trial before the English High Court, he won on all grounds.
Since Bosman, FIFA & UEFA have repeatedly lobbied for EU legislation and, latterly, non-binding declarations that the splitting of domestic football into national territories within the EU is, nonetheless, compatible with competition law. They have been consistently refused. Most recently, the EU Commission’s 2007 White Papers on Sport, later approved by the EU Parliament, did not even suggest the exemption of such territorial organisation of football or other sports from competition law.
What, probably, stopped both Rangers and Celtic taking this issue to court in the past, were the rules in FIFA’s, UEFA’s and the national associations’ constitutions which prohibit clubs from taking action against any football bodies in the ordinary courts.
The EU Commission has insisted on the removal of such rules from the FIA, motor sport’s governing body, and from FIFA’s rules, in so far they affect player transfers, which was scope of the case it was then dealing with.
There is always risk, however, that a domestic court might not be persuaded to grant all the interim orders necessary to prevent FIFA, UEFA and other football authorities from being able to make sanctions against an “offending club” or its parent association take practical effect in the short term.
While Rangers were competing at the top level in Scotland and trying to be competitive in Europe, with all the expenditure on players, staff and everything else that that required, they may have considered the risk was simply too great. Now that they are out of Europe for a number of seasons and have been banished to the Scottish third division they have little to lose and may have much to gain by finally taking this competition case to court.
This article first appeared in The Scotsman newspaper on 30th July 2012 and can be found here.
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