Competition law could be the magic wand to Uganda’s sports governance issues


What you need to know:

The ECJ, though it agreed with the lower courts, ruled that the mere fact that a rule is purely sporting in nature does not remove it from the scope of competition law.

Earlier this year, over a month ago, the President of the Republic of Uganda signed into law the Competition Act, 2023.

This Law is aimed at promoting and ensuring fair competition and guarding against anti-competitive practices in the Ugandan economy, even though in comparison to competition legal regimes elsewhere might not be perfect, could be one of the most consequential laws in Uganda’s history.

Competition law has over the years become applicable to sports and has gone a long way in curbing some of the excesses and monopolistic tendencies of sports governance.

A distinction between “purely sporting rules” and business activities has been created by Competition law.

Purely sporting rules, otherwise known as “rules of the game” are the rules that are essential to produce sports competition like anti-doping rules, the number of players, the calendar and the structure of the tournament, the size of a field or ball etc.

These rules are essentially considered non-economic in nature and might not be amenable to sports law.

On the flipside, the other decisions that are not essential for sports competition like the sale of broadcasting rights, ticket arrangements, marketing sports merchandise and have been interpreted to constitute business/economic activities and are therefore subject to competition law

Sports governing bodies have overtime as sports has increasingly gotten commercialized and moved on from just regulatory bodies to bodies involved in economic activities.

The European Court of Justice (ECJ) has expressed concern and called out sports governing bodies over their dual role because that gives them a dominant position.

In the European Super League matter, the ECJ opined that Uefa which has a dominant position, with powers of prior approval of third parties that intend to set up inter-club competitions in Europe, must ensure that it has clear, detailed, rules that are transparent, objective, non-discriminatory and proportionate permitting it to have such powers.

Scholars have argued that the distinction between purely sporting rules and business activities is unnecessary in this day and age where sports governing bodies often manipulate the rules of the game in order to increase fan numbers and revenues.

The ECJ in the landmark case of Meca Medina set the tone for the application of competition law to the sports industry. In this case, anti-doping rules were pitted against competition law where the complainants who were swimmers brought a complaint against swimming’s anti-doping rules after they had failed a drug test. 

Both the European Commission and the General Court (court of first instance in EU law) rejected their complaint and held that competition law was not applicable to purely sporting rules as they do not constitute an economic activity.

The ECJ, though it agreed with the lower courts, ruled that the mere fact that a rule is purely sporting in nature does not remove it from the scope of competition law.

The Court set a test for determining whether sports rules are anti-competitive by stating that where an undertaking or a decision of an association limits the freedom of action of the parties or of one of them, it is necessary to consider the overall objectives of the actions. In looking at these overall objectives, where it is found that the restrictive effects of the objectives are inherent, legitimate and proportionate, then that does not amount to an anti-competitive practice. For instance, in this particular regard, the anti-doping rules were created to ensure healthy rivalry between athletes which was important for the integrity and proper conduct of sports.

Through a plethora of decisions from since Meca-Medina; from the Motoe case, through to the European Super League, the Royal Antwerp and International Skating Union cases, the ECJ has emphasized the aforementioned principles. This more or less like this columnist has written previously has made the Lex Sportiva subservient to EU law or for that matter, the municipal and regional law. It is viewed from the lenses of a public policy requirement creating a conditional autonomy for sports.

As far as Uganda is concerned, it can be argued that sports bodies statutes that for instance keep out potential competition for top sports federations’ seats are anti-competitive.

Ojakol is a Sports Lawyer, Partner at Matrix Advocates and Law Lecturer at IUEA [email protected]

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