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Multiple Ownership of Clubs

The Commission’s ENIC/UEFA decision concerns rules forbidding the multiple ownership of clubs.65 It has already been examined in Chapter 5.2, as part of the survey of the development of competition law in application to practices in sport. It deserves brief re-appraisal in this chapter, because it is directly concerned with EU law’s supervision of sports governance and, in particular, because it confirms that EU law is receptive to sincere arguments that sport may legitimately be characterized by patterns of intervention that are more intrusive than would be found in other sectors of economic activity.

The Nice Declaration of 2000 already signalled a receptivity to rules forbidding multiple ownership.66 Under the heading ‘Economic Context of Sport and Solidarity’ it declared the view of the European Council that ‘single ownership or financial control of more than one sports club entering the same competition in the same sport may jeopardise fair competition’^7 In ENIC the Commission had the opportunity to apply this perception to legal assessment of a Union of European Football Associations (UEFA) rule adopted in 1998 which provided that no two (or more) clubs participating in a UEFA club competition could be directly or indirectly controlled by the same entity or managed by the same person. ENIC, which controlled several clubs across Europe, attacked the rule as a distortion of competition prohibited by EU law. It complained to the Commission. But the Commission did not share ENIC’s view. The Commission agreed in principle that the UEFA rule was capable of amounting to a practice that fell within the scope of what was then Article 81(1) EC, now Article 101(1) TFEU. After all, it suppressed demand: the owner of one club could not compete in the market to buy another one. However, the Commission relied on the need to guarantee the integrity of sporting competitions, which was the motivating factor behind the rule, as a reason to reject ENIC’s complaint. ENIC did not pursue the matter further.

This, as explained in full in Chapter 5, reflects the model of ‘conditional autonomy’ granted to sport under EU law. The Commission refused to grant absolute autonomy to UEFA. It treated the rule as falling within the scope of EU law because of its restrictive effect on competition in the market for clubs. But it permitted autonomy provided UEFA met the conditions set by EU law, which here were interpreted in the context of the sporting need to eliminate any suspicion of collaboration off the pitch that would taint the rivalry of clubs on the pitch. As also explained in Chapter 5, the Commission relied heavily on the Court’s ruling in WoutersN ENIC is a milestone in the shaping of EU competition law’s intersection with sport. In the language of Article 165 TFEU, the Commission in ENIC acknowledged ‘the specific nature of sport’ and fed it into its interpretation and application of Article 101 TFEU.

The consequence is that a choice about governance which was driven by the peculiar character of sport, specifically the need for uncertainty of outcome, was reviewed with sensitivity to that objective and so was not condemned by EU law.

 
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