Norway: Competition law and sports – the world number one slalom skier sues national sports federation

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Odd Stemsrud
Grette, Oslo
odst@grette.no^[1]

The Henrik Kristoffersen case sheds light on the European approach to the weighing of interests between athletes' commercial marketing rights and the commercial marketing rights of (quasi) monopolised sports federations.

Background

The Norwegian Henrik Kristoffersen is currently the world number one slalom skier, after competing head-to-head in recent years against Austria's Marcel Hircher, who retired in summer 2019. In the overall Alpine World Cup his main rivals are Alexis Pinturault of France and Dominik Paris of Italy.

The Alpine World Cup is organised under a (quasi) monopoly structure by various national ski federations, under the umbrella of the International Olympic Committee (IOC) and the world's highest governing body for international winter sports, the International Ski Federation (FIS).

In 2016, in the most high-profile European Economic Area (EEA)/competition case in Norway in recent years, Kristoffersen sued the national ski federation because the federation would not endorse his individual helmet sponsorship agreement with the company Red Bull. Such an agreement was necessary for Kristoffersen to become a Red Bull athlete and, thus, enjoy the full support of Red Bull's support team (a second-to-none alpine team already aiding his competitors Marcel Hirscher and Alexis Pinturault). The case concerned both competition law – abuse of a dominant position (Article 102 TFEU/54 EEA) and agreements distorting competition (Article 101 TFEU/53 EEA) – and European Union/European Economic Area internal market law (the freedom to provide services, Article 36 EEA). The key question was: would the athlete's individual marketing rights or the national federation's marketing rights prevail?

The particularities of sports

Sporting disciplines are generally governed by one or more umbrella organisations. Clubs belong to a national sport association, which covers both high-level (elite) and grassroots sport. National sport associations commonly operate under the umbrellas of both regional and international federations.

Most disciplines under the IOC have a (quasi) monopolistic pyramid structure, albeit with differences in the scope and importance of the sporting pyramid, depending on the sport. In particular, the system of open competitions is generally limited to team sports. In other disciplines, such as motor sports and cycling, professional competitions are totally or partially closed and in disciplines such as golf and tennis, the organisation of competitions also largely diverges from the pyramid structure.

Alpine skiing is one of the individual global sports where there is a pyramid structure regarding national championships and the selection of national athletes. In other words, Kristoffersen is an athlete who can only provide his services to sponsors and consumers through his performance as a slalom skier on the Norwegian national team in the FIS world cup. There are no alternatives. 

Application of EU/EEA competition rules to the sporting sector

Economic activities related to sport fall within the scope of EU/EEA law, including competition law. Earlier European case law has particularly touched on the joint sale of sport media rights and various ticket sales arrangements. Moreover, European state aid rules may apply to public support of infrastructure.

European law as applicable to sports generally prohibits any and all distortion of competition and restrictions on providing services.

However, EU/EEA law also recognises the positive aspects of sports, such as the protection of the integrity of sport, the protection of the health and safety of athletes and the organisation and proper conduct of competitive sport (the ‘rules of the game’). Such aspects may counter-balance otherwise illegal conduct.

In relation to economic interests and financing, the European Free Trade Association (EFTA) Court in the Kristoffersen case confirmed that aims of a purely economic nature, such as the desire to increase profits, cannot justify any restrictions under EU/EEA law. Importantly, however, the EFTA Court also confirmed that the channelling of revenue to the detriment of professional athletes could be justified if the income generated benefits related to positive, non-economic activities such as recruitment, education and children’s or recreational sports.

The recent evolution of EU/EEA law as applicable to individual athletes' rights

In parallel with the Kristoffersen case – which was launched in 2016 and ended in May 2019 with a judgment in a national court in Norway after advice had been procured from the EFTA Court in Luxembourg – two other similar cases were addressed in Europe:

The European Commission's ISU case^[2]

In a prohibition decision of 8 December 2017, the European Commission decided that the International Skating Union (ISU) rules imposing penalties on athletes participating in speed skating competitions that are not authorised by the ISU were in breach of Article 101 TFEU. As part of its decision the Commission found that, by imposing such restrictions, the ISU eligibility rules restricted competition and enabled the ISU to pursue its own commercial interests to the detriment of athletes and organisers of competing events. In particular, the Commission considered that the ISU eligibility rules restricted the commercial freedom of athletes who were prevented from participating in independent skating events. Thus, the ISU eligibility rules also prevented independent organisers from putting together their own speed skating competitions because they were unable to attract top athletes. The Commission found that this limited the development of alternative and innovative speed skating competitions and deprived ice-skating fans from following other events.

The Bundeskartellamt's IOC/DOSB case^[3]

In a commitment decision of 27 February 2019, the German Olympic Sports Confederation (Deutscher Olympischer Sportbund, DOSB) and the IOC committed to the Bundeskartellamt to ease the advertising restrictions pursuant to Rule 40 No 3 of the Olympic Charter, relating to, inter alia, the athletes so-called freezing period for marketing activities during the Olympics. The commitments contained the following improvements:

1. Procedure: Advertising activities to take place during the Olympic Games no longer have to be notified to and cleared by the DOSB beforehand. Athletes or companies wishing to have legal security with regard to the activities can continue to notify the DOSB.

2. Advertising activities: Not only ongoing, but also new advertising activities will be admissible in future. The same applies to messages of greeting and congratulations.

3. Sanctions and jurisdiction: Sporting sanctions must not be applied in the event of disputes on whether an advertising measure is admissible or not and sports arbitration courts no longer decide on such disputes. Instead, such cases must be taken to ordinary civil courts.

The Kristoffersen case^[4] was addressed by the EFTA Court in a judgment of 16 November 2018, prior to the Norwegian national court's judgment of 6 May 2019. The EFTA Court focused on internal market law. In principle, it subscribed to the competition law findings in the ISU case and the DOSB/IOC case. However, the Norwegian national court would seem to have failed in its analysis of the relevant market and legitimate restrictions on athletes' rights by conferring very wide discretionary powers on the national federation, to the detriment of Kristoffersen. The Kristoffersen case was not appealed, as the parties reached an amicable settlement by way of a separate training scheme, providing Kristoffersen with a support team almost as good as the Red Bull athletes team.

In the wake of the Kristoffersen case, several Norwegian athletes have proceeded to informally challenge the Norwegian Ski Federation's marketing rules, which basically extinguish all the individual marketing rights of the athletes. Thus, the topic of athletes' marketing rights and competition law will likely be revisited in the years to come.