Short Reads

Belgian competition authority upholds licence refusal to football club White Star

Belgian competition authority upholds licence refusal to football club White Star

02.08.2016 EU law

On 14 July 2016, the Belgian Competition Authority ("BCA") concluded that a refusal to grant a licence to football club Royal White Star Bruxelles, which would allow it to participate in the first division of the Belgian football league, did not infringe competition law. Furthermore, the BCA found that there were not enough grounds to justify provisional measures.

During the 2015-2016 football season in Belgium, White Star won the second division competition. Consequently, it should have been allowed to participate in the Belgian first division (1A) in 2016-2017. However, the licence committee of the Belgian football association (KBVB/URBSFA) refused to grant the necessary licence because White Star did not meet some of the requirements laid down in the regulations of the football association. White Star appealed to the Belgian Court of Arbitration for Sport ("CBAS"), which equally declined to grant the licence, this time because White Star did not meet the financial stability criteria ("the principle of continuity") in the regulation of the Belgian football association.

White Star requested the BCA to impose provisional measures, so it could start integrating into division 1A. It alleged that the football association and CBAS abused their dominant position(s) by engaging in discriminatory treatment. The BCA declared the request for provisory measures admissible but unfounded.

A novel aspect of the decision is that while the BCA recognised that the CBAS was not an 'association of undertakings', its award in effect would implement a regulation enacted by an association of undertakings, i.e. the Belgian football association. Therefore, the arbitral award is attributable to the football association and can potentially constitute a restrictive practice. Consequently, the BCA can review the arbitral award's conformity with the competition rules.

The College reviewed the KBVB/URBSFA licence regulation, including the principle of continuity. This principle implies that when considering licensing decisions, the responsible bodies need to take into account whether the football club concerned will be able to fulfill its financial obligations in the next season. The BCA considered that the regulation pursued a legitimate interest and was compliant with competition law.

Subsequently, the College found that White Star was not treated in a discriminatory manner compared to other football clubs that also suffered financial difficulties but did obtain a licence.

Another interesting feature of the decision is that the BCA considered an alternative measure on its own motion, not requested by the plaintiff, consisting of the possible integration of White Star into division 1B (the former division 2) instead of 1A. For the same reasons, this alternative was rejected.

Finally, the BCA performed a balance of interest test which it had not done as explicitly until now. It considered that even if there would have been grounds to grant provisional measures, the interests of other clubs would have been gravely injured for several reasons.

This article was published in the Competition Law Newsletter of August 2016. Other articles in this newsletter:

  1. Court of Justice clarifies the legality of royalty payments in the event of revocation or non-infringement of the licensed patent 
  2. General Court confirms fines imposed on the basis of economic continuity in maritime hose cartel 
  3. European Commission imposes record cartel fine on truck manufacturers for price fixing 
  4. European Commission deems support measures in favour of Dutch football clubs in line with State aid rules 
  5. Dutch District Court ruled that parent companies cannot be held liable for damages arising from antitrust infringements committed by their subsidiaries 
  6. ACM lowered fines in the pepper cartel case 
  7. Dutch Supreme Court confirms the availability of a passing-on defence in antitrust damages litigation 
  8. Brussels Court of Appeal rules that concerted lobbying efforts of cement producers do not breach competition law 
  9. Belgian competition authority upholds licence refusal to football club White Star

Source: Competition Law Newsletter August 2016

Team

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