Case C‑680/21
UL
and
SA Royal Antwerp Football Club
v
Union royale belge des sociétés de football association ASBL (URBSFA)
(Request for a preliminary ruling from the tribunal de première instance francophone de Bruxelles)
Judgment of the Court (Grand Chamber) of 21 December 2023
(Reference for a preliminary ruling – Competition – Internal market – Rules introduced by international and national sports associations – Professional football – Private law entities vested with regulatory, control and sanctioning powers – Rules requiring professional football clubs to use a minimum number of ‘home-grown’ players – Article 101(1) TFEU – Decision by an association of undertakings adversely affecting competition – Concepts of anticompetitive ‘object’ and ‘effect’ – Exemption under Article 101(3) TFEU – Conditions – Article 45 TFEU – Indirect discrimination on the basis of nationality – Restriction on the freedom of movement for workers – Possible justification – Conditions – Burden of proof)
1. Questions referred for a preliminary ruling – Reference to the Court – Conformity of the decision to refer with the rules of national law governing the organisation of the courts and their procedure – Not a matter for the Court to determine
(Art. 267 TFEU; Rules of Procedure of the Court, Art. 97(2))
(see paragraphs 28-30)
2. Questions referred for a preliminary ruling – Admissibility – Need for a preliminary ruling and relevance of the questions referred – Assessment by the national court – Presumption of relevance of the questions referred
(Art. 267 TFEU)
(see paragraphs 35-37)
3. Agreements, decisions and concerted practices – Effect on trade between Member States – Criteria – Agreement covering the whole territory of a Member State
(Art. 101(1) TFEU)
(see paragraphs 43, 44, 83, 84)
4. EU law – Scope – Pursuit of sport as an economic activity – Included – Rules adopted solely on non-economic grounds and relating to questions of interest solely to sport – Not included – Rules introduced by sports associations requiring professional football clubs to use a minimum number of home-grown players – Rules having a direct impact on the conditions for engaging in an economic activity – Included
(Arts 45, 101, 102 and 165 TFEU)
(see paragraphs 53-62, 69)
5. EU law – Scope – Pursuit of sport as an economic activity – Included – Rules introduced by sports associations requiring professional football clubs to use a minimum number of home-grown players – Restriction – Justification – Account taken of the specific characteristics of sport
(Arts 45, 101 and 165 TFEU)
(see paragraphs 64-68, 70-74)
6. Agreements, decisions and concerted practices – Adverse effect on competition – Decisions by associations of undertakings – Meaning – Rules introduced by sports associations requiring professional football clubs to use a minimum number of home-grown players – Included
(Art. 101(1) TFEU)
(see paragraphs 81, 82)
7. Agreements, decisions and concerted practices – Adverse effect on competition – Criteria for assessment – Distinction between restrictions by object and by effect – Restriction by object – Whether sufficient degree of harm – Sufficient degree of harm revealed
(Art. 101(1) TFEU)
(see paragraphs 86, 88-90)
8. Agreements, decisions and concerted practices – Adverse effect on competition – Criteria for assessment – Content and objective of an agreement and economic and legal context of its development – Distinction between restrictions by object and by effect – Intention of the parties to an agreement to restrict competition – Not a necessary criterion – Infringement by object – Whether sufficient degree of harm – Criteria for assessment – Need to examine the effects of the anticompetitive conduct on competition – None
(Art. 101 TFEU)
(see paragraphs 92-98)
9. Agreements, decisions and concerted practices – Adverse effect on competition – Criteria for assessment – Distinction between restrictions by object and by effect – Restriction by effect – Examination of the operation of competition in the absence of the agreement at issue
(Article 101(1) TFEU)
(see paragraphs 99, 100)
10. Agreements, decisions and concerted practices – Adverse effect on competition – Decisions by associations of undertakings – Rules introduced by sports associations requiring professional football clubs to use a minimum number of home-grown players – Restriction by object – Determination by the referring court
(Art. 101(1) TFEU)
(see paragraphs 101-112, operative part 1)
11. Agreements, decisions and concerted practices – Adverse effect on competition – Decisions by associations of undertakings – Rules introduced by sports associations requiring professional football clubs to use a minimum number of home-grown players – Justification on grounds of legitimate objectives in the public interest – Condition – No restriction by object – Exemption – Conditions
(Article 101(1) TFEU)
(see paragraphs 113-117)
12. Agreements, decisions and concerted practices – Prohibition – Exemption – Conditions – Improvement of the production or distribution of goods or contribution to technical or economic progress – Appreciable objective advantages of such a character as to compensate for the disadvantages for competition resulting from that agreement – Indispensable or necessary nature of the conduct at issue – No elimination of all effective competition for a substantial part of the products or services concerned – Burden of proof – Cumulative nature of the conditions for exemption
(Art. 101(3) TFEU)
(see paragraphs 118-135, operative part 2)
13. Freedom of movement for persons – Workers – Restrictions – Rules introduced by sports associations requiring professional football clubs to use a minimum number of home-grown players – Not permissible – Justification – Determination by the referring court
(Art. 45 TFEU)
(see paragraphs 136-150, operative part 3)
Résumé
The Union of European Football Associations (UEFA) is an association governed by Swiss law whose principal missions consist in monitoring and controlling the development of every type of football in Europe. It oversees the various European national football associations responsible for the organisation of football in their State – including the Union royale belge des sociétés de football association ASBL (Royal Belgian Football Association; URBSFA) for Belgium. Those associations, as UEFA members, are required to comply with the statutes, regulations and decisions of UEFA and to ensure observance of them, in their State, by the professional leagues subject to them and by clubs and players.
In 2005, UEFA adopted rules stipulating that professional football clubs participating in its international interclub football competitions must include a maximum number of 25 players on the match sheet, of whom a minimum of 8 must be ‘home-grown players’, defined as players who, regardless of their nationality, have been trained by their club or by a club affiliated to the same national football association for at least three years (‘the rules on “home-grown players”’). Out of eight players, at least four must have been trained by the club which lists them. In 2011, the URBSFA introduced into its regulations rules relating to ‘home-grown players’, defined as players who, regardless of their nationality, have been trained for at least three years by a Belgian club.
UL is a football player who has the nationality of a third country, in addition to Belgian nationality. He is engaged in a professional activity in Belgium where he played for Royal Antwerp, a professional football club based in Belgium, and then for another professional football club in Belgium.
Claiming that the rules relating to ‘home-grown players’ are contrary to the provisions of the FEU Treaty, UL and Royal Antwerp brought an action before the Cour Belge d’Arbitrage pour le Sport (Belgian Court of Arbitration for Sport; CBAS) for compensation for the damage caused by those rules. Those claims were rejected by the CBAS, whereupon UL and Royal Antwerp brought an action before the tribunal de première instance francophone de Bruxelles (Brussels Court of First Instance (French-speaking), Belgium), the referring court, for annulment of the arbitration award.
It was against that background that the national court decided to refer a number of questions to the Court of Justice for a preliminary ruling, in essence, on whether the rules on ‘home-grown players’ adopted by UEFA and the URBSFA may be categorised as ‘agreements between undertakings’, ‘decisions by associations of undertakings’ or ‘concerted practices’ within the meaning of Article 101 TFEU. It also questions whether the rules adopted by the URBSFA are compatible with the freedom of movement for workers guaranteed by Article 45 TFEU.
By its judgment, delivered the same day as two other judgments (1) concerning the application of EU economic law to rules introduced by international sports federations, the Court, sitting in Grand Chamber, provides clarification on the application of Articles 45 and 101 TFEU to the rules adopted by sports federations with regard to the composition of teams, the participation of players in those teams and the training of those players.
Findings of the Court
As a preliminary point, the Court observes, in the first place, that the rules on ‘home-grown players’ fall within the scope of Articles 45 and 101 TFEU. In that regard, it points out that, to the extent that the pursuit of a sport constitutes an economic activity, it comes under the provisions of EU law that are applicable to that activity, with the exception of certain specific rules which (i) were adopted exclusively for reasons of a non-economic nature and (ii) relate to questions of interest solely to sport per se. As it is, the rules at issue in the main proceedings, whether they originate from UEFA or the URBSFA, do not come under such an exception. They concern economic activities. Moreover, although those rules do not formally govern the players’ working conditions, they must be regarded as having a direct impact on that work in that they impose certain conditions, which are backed with sanctions, on the composition of the teams able to participate in interclub football competitions and, accordingly, the participation of the players themselves in those competitions.
Addressing, in the second place, the inferences liable to be attached to Article 165 TFEU – which sets out both the objectives assigned to the Union action in the area of sport and the means which may be used to contribute to the attainment of those objectives – the Court observes that that provision does not constitute a special rule exempting sport from all or some of the other provisions of primary EU law liable to be applied to it or requiring special treatment for sport in the context of that application. It also points out that the undeniable specific characteristics of sporting activities may be taken into account along with other elements and provided they are relevant in the application of Articles 45 and 101 TFEU, although they may be so only in the context of and in compliance with the conditions and criteria of application provided for in each of those provisions.
In the light of those observations, the Court examines, as a first step, whether the UEFA and the URBSFA rules on ‘home-grown players’ are compatible with Article 101 TFEU.
In that regard, it states, first of all, that the rules at issue in the main proceedings must be categorised as a ‘decision by an association of undertakings’ in that (i) they originate from UEFA and the URBSFA, which are associations of undertakings, and (ii) they have a direct impact on the conditions for engaging in the economic activity of the undertakings who are directly or indirectly their members.
Next, as to whether those rules have an anticompetitive object, the Court states, in the first place, that, by their content, they appear to require professional football clubs participating in interclub football competitions under those associations to include on the match sheet, subject to sanctions, a minimum number of ‘home-grown players’. In doing so, those rules appear to limit, by their very nature, the possibility for those clubs to include on that sheet players who do not meet those requirements. In the second place, with regard to the economic and legal context of which those rules form part, it is apparent from the specific characteristics of professional football, in particular its social, cultural and media importance, together with the fact that that sport is based on openness and sporting merit, that it is legitimate for associations such as UEFA and the URBSFA to adopt rules relating, inter alia, to the organisation of competitions in that discipline, their proper functioning and the participation of sportspersons in those competitions and, more particularly, to regulate the conditions in which professional football clubs may put together teams participating in interclub competitions within their territorial jurisdiction. In the third place, as regards the outcome which the rules at issue in the main proceedings seek to attain, they appear to limit or control one of the essential parameters of competition, namely the recruitment of talented players, whatever the club or place where they were trained, which could enable their team to win in the encounter with the opposing team. That limitation is likely to have an impact on the competition in which the clubs may engage, not only in the ‘upstream or supply market’, which, from an economic point of view, is constituted by the recruitment of players, but also in the ‘downstream market’, which, from the same point of view, is constituted by interclub football competitions.
Notwithstanding that, it is for the referring court to determine, in the light of those clarifications and having regard to all the arguments and evidence submitted by the parties, whether the rules at issue in the main proceedings reveal, by their very nature, a sufficient degree of harm to competition to be able to be regarded as having as their ‘object’ the restriction of competition. If that is not the case, that court will then have to determine whether those rules can be regarded as having, as their actual or potential effect, the restriction of competition on the market concerned.
Finally, with regard to the question whether those rules can be justified or exempted, the Court recalls that certain specific conduct, such as ethical or professional conduct rules adopted by an association, may not fall within the prohibition laid down in Article 101(1) TFEU even if they have the inherent effects of restricting competition, provided that they are justified by the pursuit of legitimate objectives in the public interest which are not per se anticompetitive in nature and that the necessity and proportionality of the means used for that purpose have been duly established.
It points out, however, that that case-law cannot be applied in relation to conduct that presents a degree of harm which justifies a finding that it has as its very ‘object’ the prevention, restriction or distortion of competition, without prejudice to any possible exemption under Article 101(3) TFEU, provided that the conditions required for that purpose are met, which is for the party relying on that exemption to demonstrate.
The Court recalls that, in order to be eligible for that exemption, the conduct under consideration must allow, with a sufficient degree of probability, the achievement of efficiency gains while reserving for users an equitable part of the profit resulting from those gains, without imposing restrictions that are not indispensable for achieving those gains and without eliminating all effective competition for a substantial part of the products or services concerned. It will be for the referring court, if it considers that the rules on home-grown players have as their object or effect the restriction of competition, to assess whether those conditions are met in the present case.
As a second step, in relation to the question whether the URBSFA rules on ‘home-grown players’ are compatible with Article 45 TFEU, the Court states that those rules prima facie infringe the freedom of movement for workers. They are based on a connection of a ‘national’ character in that, first, they define ‘home-grown players’ as those who were trained within a ‘Belgian’ club. Second, they require professional football clubs wishing to participate in interclub football competitions under the URBSFA to enter in the list of their players and to include on the match sheet a minimum number of players who satisfy the conditions to be eligible in that way. It follows that such rules are likely to place at a disadvantage professional football players who wish to pursue an economic activity in the territory of a Member State, namely Belgium, other than their Member State of origin, and who do not satisfy the conditions required by those rules. To that extent, those rules are likely to give rise to indirect discrimination at the expense of players coming from another Member State, in that they risk operating mainly to the detriment of those players.
As regards any possible justification, the Court recalls that measures of non-State origin may be permitted even though they impede a freedom of movement enshrined in the FEU Treaty, if two cumulative conditions are fulfilled, which is for the party who introduced those measures to demonstrate. Thus, first, the adoption of those measures must pursue a legitimate objective in the public interest that is compatible with the Treaty and, therefore other than of a purely economic nature and, second, those measures must observe the principle of proportionality, which entails that they are suitable for ensuring the achievement of that objective and do not go beyond what is necessary for that purpose.
In the present case, the objective of encouraging the recruitment and training of young professional football players constitutes such a legitimate objective in the public interest. As regards the suitability of those rules for ensuring the attainment of that objective, that must be assessed, in particular, having regard to the fact that, by placing on the same level all young players who have been trained by any club affiliated to the national football association in question, those rules might not constitute real and significant incentives for some of those clubs, in particular those with significant financial resources, to recruit young players with a view to training them themselves. On the contrary, such a recruitment and training policy is placed on the same level as the recruitment of young players already trained by any other club also affiliated to that association, regardless of the location of that other club within the territorial jurisdiction of that association. However, it is precisely local investment in the training of young players, in particular when it is carried out by small clubs, where appropriate in partnership with other clubs in the same region and possibly with a cross-border dimension, which contributes to fulfilling the social and educational function of sport.
That being said, the Court points out that it will ultimately be for the referring court alone to assess whether the URBSFA rules meet the conditions set out above, in the light of the arguments and evidence produced by the parties.