EU COMPETITION LAW AND SPORT IN FRANCE
In this Post, we focus on some key judicial developments and their application in France.
Sport is not exempt from free market rules in the European Union (EU).
Whilst Article 165 of the Treaty on the Functioning of the European Union (TFEU) recognises the specific nature of sport, this recognition does not exempt sports federations from complying with EU competition law when their activities take on an economic dimension.
As clarified by the EU Court of Justice in Walrave and Koch (C-36/74), rules concerning the composition of national teams fall outside the scope of EU non-discrimination rules, as they pertain to purely sporting interest.
In France, as elsewhere in the EU, this legal framework applies notably to the organisation of competitions, the commercialisation of media rights, and the regulation of player transfers.
Sports’ governing bodies must, therefore, ensure that their rules and practices comply with Articles 101 and 102 TFEU, which prohibit anti-competitive agreements and abuses of dominant positions.
Although these organisations often carry out public interest missions, they may still be considered “undertakings” under EU law.
In France, the same principles are echoed in domestic provisions, such as Articles L. 420-1 and L. 420-2 of the Commercial Code. The key challenge lies in finding a balance between preserving the autonomy of sport and ensuring compliance with competition law. Breaches of competition law may also lead to significant financial sanctions, with the French Competition Authority (FCA) empowered to impose fines of up to 10% of a party’s global turnover under Article L. 464-2 of the French Commercial Code.
Two noteworthy decisions by the Court of Justice of the European Union (CJEU) have clarified this balance in the sporting context: the ISU v Commission (Case C‑124/21 P) and the Diarra (Case C‑650/22).
In the ISU case, the CJEU confirmed that the International Skating Union rules requiring prior authorisation for competitions and granting exclusive jurisdiction to the Court of Arbitration for Sport (CAS) in Lausanne amounted to a restriction of competition „by object“ under Article 101(1) TFEU. The key issue was not arbitration itself, but the fact that CAS decisions are subject only to review by the Swiss Federal Tribunal, which does not recognise EU competition law as part of public policy. As a result, athletes were denied effective legal protection within the EU. The CJEU found that this system reinforced the anti-competitive effects of the ISU eligibility rules and deprived athletes of meaningful judicial review by courts capable of referring questions to the CJEU. The ruling underlines that athletes must be able to access legal remedies within the European Union.
In the Diarra case, the CJEU assessed the compatibility of the FIFA transfer rules with both the freedom of movement (Article 45 TFEU) and EU competition law. The Court’s reasoning in Diarra also builds upon principles articulated in the European Super League case, which refined the legal framework for assessing whether sports regulations unduly restrict competition under Article 101(1) TFEU. The Court found that FIFA rules, notably those imposing joint and several liability on players and clubs, automatic sporting sanctions, and restrictions on player registration in cases of contractual disputes, constituted a restriction of competition “by object” under Article 101(1) TFEU and could not be justified under Article 101(3). The case serves as a reminder that sporting rules must remain consistent with EU legal standards.
Together, these decisions illustrate the growing judicial scrutiny over sports regulations that affect the EU market. Whilst the ‘specificity of sport’ is acknowledged, it cannot be used to circumvent fundamental principles of EU law, including competition law. The ’specificity of sport’ recognises, in the amended Treaty of the European Union of 2009, the inherent characteristics of sport, which distinguish it from other economic and social activities in the EU.
In France, where sports organisations are subject to both EU and national competition law, this evolving case law serves as a clear reminder of the importance of legal compliance.
Navigating successfully these evolving legal standards requires professional guidance and expertise.
For further information about our sports litigation professional services in France, email Dr Estelle Ivanova, the Head of our French Desk, at ‘ivanova@valloni.ch’.