The Journal on Sports and Entertainment Law recently sat down with Professor Marek Krzysztof Kolasiński, Professor at Nicolaus Copernicus University in Toruń, to discuss the application of competition (antitrust) law to European sports leagues. Professor Kolasiński explores this topic in his article, “Influence of the Private enforcement of Competition Law on Sport in the European Union against the United States Law Background” which has been published online by JSEL and can be found here.
The interview was conducted by Loren Shokes, an Entertainment and Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current second year student at Harvard Law School (Class of 2017). The interview is part of JSEL’s interview series with lawyers in the sports and entertainment field that will be featured on JSEL’s website. It has been edited for clarity.
**Please note that, throughout this interview, Professor Kolasiński was speaking in his capacity as an individual and a scholar, and not as a representative of Nicolaus Copernicus University or any of their respective affiliates.**
Loren Shokes, Journal on Sports & Entertainment Law (JSEL): In your opinion, is there a series of events, or any event in particular, that helped spur the adoption of Directive 2014/104/EU, which changed certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union?
Professor Marek Kolasiński (MK):The adoption of the Directive is the result of a very long evolution of EU law. In my opinion, the key factor here was the pressure created by the Court of Justice, which has been emphasizing that everyone should have the possibility to seek compensation for losses caused by EU competition law violations. The fact that the European Commission and national competition authorities have limited resources and are unable to deal with all EU competition law violations is important, too.
JSEL: Many US professional leagues, particularly the “Big Three” (NFL, MLB, NBA), have discussed having teams based abroad, and specifically in Europe. How do you think European law will be affected, if at all, by having an American sporting team that is governed under the auspices of US law in its own backyard?
MK: The EU law is basically applied to all economic activities which may have a direct, indirect, actual or potential influence on the trade between member states. This is a very broad concept. As a result, U.S. professional leagues which conduct economic activity in EU are required to follow EU competition law. However, the legal problems in this area should not be overestimated. Plenty of US companies doing business in the EU are in a similar position. If the business model for having European teams represented by the U.S. leagues is attractive, the legal problems will be effectively solved.
JSEL: Is there a particular reason you think EU Sports Leagues are more inclined to follow US sports, as compared to sporting rules employed in South America or Asia sporting leagues?
MK: There are very strong cultural, legal and economical connections between Europe and the United States. As regards sport law, the fact that U.S. antitrust law has been having great influence upon the development of European Union competition law is of particular importance. The European leagues will have to adjust their activity to a new legal reality created by the private enforcement of EU competition law. Private enforcement of competition law, especially in the area of sport, is a relatively new phenomenon in Europe, and the U.S. professional leagues have great experience in struggling with this issue. It would be unreasonable for European leagues not to take advantage of the U.S. experiences.
JSEL: Do you feel that implementing US-style private competition rules are universally applicable to all European sports or do you think they would be more readily applicable to sports that are currently present in the US, such as soccer, than others, such as cricket?
MK:I suppose that private enforcement of EU competition law will have a particularly significant influence upon less popular sports which haven’t attracted European Commission attention so far. The reality of those sports is sometimes very far away from EU competition law standards. As regards the most popular sports and the most significant sports organizations, I would like to draw your attention to the fact that effective private enforcement of EU competition law can diminish the meaning of cooperation between the European Commission and international sport associations.
JSEL: As Professor Peter Carfagna explained, the Sports Broadcasting Act “applies only to television broadcasts, not cable, satellite or internet, or other new media broadcasts.” To further market EU sports to US audiences, do you anticipate EU Leagues strategizing different ways to make their sports more appealing to US audiences?
MK: This is mainly a business issue. In my opinion, only European soccer has the potential to attract a significant Northern American audience. However, there are important limitations to it. “The big three” leagues are deeply rooted in U.S. society and it is impossible for European soccer to effectively compete against them. It seems that it is much easier for European soccer teams to strengthen their position in Asia than in the U.S. Some trivial, but important issues, such as time difference, have an impact here too. Sports events lack the core of their attractiveness if they are not watched live. Legal problems don`t have a significant meaning here.
JSEL: What are some of the potential disadvantages you foresee in increasing private enforcement of competition law?
MK: There are some risks related to private enforcement of EU competition law to sport. The core of them is a result of a lack of experience. It is true that EU competition law has been applied to sport for many years. However, it used to be almost exclusively public enforcement by the European Commission and it was focused upon removing obstacles for European integration. Applying European Union competition law to sport, without the European Commission being involved in the procedure, is a really new phenomenon. The vast majority of EU member states courts, leagues and athletes have never had to deal with the issue. This is the way U.S. experiences should be carefully studied in Europe. I will give you an example. Collective bargained agreements play a vital role in avoiding over-enforcement of antitrust law to sport in the U.S. CBA are almost not used in European sport. To make things worse, athletes unions in Europe are weak and most of them are deprived of the right to collectively bargain. European leagues and athletes can benefit a lot from U.S. experiences.
JSEL: In your opinion, are there any specific inherent or fundamental differences in US sporting rules and regulations that would greatly hinder or impede its integration into European sports?
MK: The structures of European leagues are significantly different than the U.S. ones. Let me give you some examples. The vast majority of European leagues are open – it is possible to get promotion to them from a lower division and to be relegated from a higher to lower division in the case of poor sports results. This is contrary to U.S. leagues standards. Another difference is the fact that the idea of competitive balance in sport leagues is much widely recognized in the U.S. than in Europe. The key issue here is to take into consideration that the differences are deeply rooted in culture and in the fact that the natures of relationships between EU member states and the EU are truly different then relationships between states and the U.S. European fans wouldn’t accept replacing national leagues by one European league. Moreover, a national championship is often more valued than success at a European level. To sum up, the U.S. solutions should not be automatically transferred to Europe, but they must be reasonably adjusted to European realities.
JSEL: Do you see this as the start of a trend to implement a more uniform global set of rules for sports?
MK: Globalization pushes us to greater standardization. U.S. law has a significant influence upon the discussion about the enforcement of EU competition law. The gap between the efficiency of private enforcement of competition (antitrust) law of the U.S. and EU has been diminished. Nevertheless, one should be aware of the fact that very important differences remain. For example, there is no punitive component in the damages for damage resulting from violation of EU competition law. The efficiency of European discovery rules is much smaller than American ones. This is also the case as regards class actions. With the exception of the UK, no EU member state has accepted the opt-out rule. Some European scholars push upon avoiding U.S.-style antitrust cowboy litigation in Europe. The remaining differences in the effectiveness of private enforcement of EU and U.S. competition (antitrust) law will have an influence upon sport.
JSEL: In your article you explain that the fact that the European Commission has approved UEFA Financial Fair Play Regulations is of little importance today and that its importance is increasingly diminishing. If UEFA’s rules were found to not be successful in their implementation, why do you feel that private enforcement of competition law will have a better outcome?
MK: The issue of UEFA Financial Fair Play Regulations is a component of a broader issue of competitive balance in sport. Introducing this idea in Europe must be fair and reasonable. There are significant doubts if UEFA Financial Fair Play Regulations meet those criteria. Some of the European leagues took even much more radical steps to limit a team’s spending. The biggest European speedway league – Polish PGE Ekstraliga – introduced a drastic salary cap. It wasn`t accepted by the athletes and no benefits were provided to them in return. There is also no correlation between league incomes and athletes salaries. This shouldn’t be accepted and private enforcement of EU competition law seems to be a good tool to deal with it.