Sport & Antitrust: Global Summer round-up

Despite widespread disruption to the sporting calendar caused by COVID-19, 2021 has already been a significant year for competition law in sports. National competition authorities and regulators around the world have remained active throughout the pandemic, with competition – or antitrust – law having a considerable impact on the sports industry.

Competition in Professional Baseball – an end to the sport’s antitrust exemption?

The longest running and most comprehensive antitrust exemption for U.S. sports has been on the chopping block since April, when Republican senators introduced legislation that would see an end to Major League Baseball’s (MLB) special exemption from U.S. antitrust laws. The “Competition in Professional Baseball Act” would eliminate the exemption afforded to the MLB by the Supreme Court in its 1922 decision in Federal Baseball, where it was unanimously held that the Sherman Act, a federal statute which prohibits activities that restrict competition, did not apply to the MLB because baseball was not considered to be involved in interstate commerce. 

Criticism of the Federal Baseball decision and its corresponding exemption is not new. Critics point to the fact that the exemption effectively shields the MLB from potential competition, like another professional baseball league emerging. The argument is that the exemption allows a sports league that generates more than $10 billion in annual revenue to monopolize the professional baseball industry based on the (misguided) notion that such revenues are entirely separate from interstate commerce. The Supreme Court has repeatedly refused to extend Federal Baseball to other professional sports leagues, meaning that national football, basketball and hockey leagues (the NFL, NBA, and NHL, respectively) do not enjoy a similar exemption from U.S. antitrust laws. Despite its refusal to extend the decision, the Court has continued to uphold the MLB’s exemption, principally to preserve its long-standing precedent. The Court has expressed through various decisions (most recently in the Alston case, which we discussed here) that if baseball’s exemption were to be removed, it should be by legislation.

The “Competition in Professional Baseball Act” seeks to do just that, although the bill’s introduction was decried as a retaliatory political move, as it came less than two weeks after the MLB announced that it was moving the All Star Game out of Georgia due to the state’s new voting law, the Election Integrity Act, which was widely viewed as imposing unwarranted obstacles to voter access. While its odds of passage are relatively low (the bill is exclusively sponsored by Republicans, with Congress currently controlled by Democrats), if the exemption were ultimately abolished, the ramifications for the MLB would be extensive. Removal of the exemption could potentially affect the MLB’s ability to contract with minor league teams, to collectively assign its trademark rights to a central league office (mainly for the purposes of granting exclusive league-wide licenses for apparel manufacturing), and could make it more difficult for the MLB to prevent teams from moving to more desirable locations.

“If they're good enough, they're old enough”: U.S. Women’s Soccer League settles minimum age dispute

In July, the U.S. National Women’s Soccer League (NWSL) reached a settlement with a 15-year-old prodigy following a federal lawsuit that the league’s minimum age rule (18 to play) violated antitrust law, specifically the Sherman Act. Though many professional leagues have age minimums, they are typically negotiated through collective bargaining agreements (CBAs), which the NWSL does not yet have (though CBAs between the NWSL and the players association are currently being negotiated). The plaintiff argued that age limits can only be set by CBAs and that, absent such agreements, the NWSL’s age restrictions constitute a group boycott in violation of the Sherman Act’s prohibition on concerted action. 

The case ultimately settled before the legal merits of the claim could be decided, as the plaintiff agreed to drop her claims in exchange for the league agreeing to allow her to play professionally. The settlement was likely a smart move by the NWSL, as the NBA lost a similar case in federal court involving an age limit rule in violation of the Sherman Act in 1971, and similar age restriction cases have subsequently been lost by the NFL and NHL as well. 

The NWSL’s minimum age rule therefore remains in place, in tension with the fact that players under 18 can qualify for the U.S. Women’s National Team but cannot play in the league which develops and prepares talent for this team. For its part, Major League Soccer, the U.S.’s professional men’s league, does not have a similar age rule, nor do a number of professional soccer leagues abroad.

Chinese Super League abuse – the battle rages on

On the other side of the world, proceedings continue against Chinese Football Association Super League Co (CSL) – which manages the China Super league, one of the country’s most popular sports events – for an alleged abuse of dominance. 

We have previously commented on the investigation, brought about when a Chinese supplier of sports images accused CSL and its exclusive trading photograph vendor, ImageChina, of abusing their dominant positions by requiring purchasers of sports photographs to trade exclusively with ImageChina. The case, reopened at the end of 2020, was dismissed by the Shanghai Intellectual Property Court in April, on the basis that the court did not find any violation of antitrust law. Even though the court established the relevant market to be the league photo market (versus the entire global sports photo market, as previously argued by the two defendants), it decided there was insufficient evidence to show that the parties held a dominant position. The court added that CSL and ImageChina had justifiable reasons in imposing restrictions on the sale of the photographs.

This decision has been appealed to the Chinese supreme court. In light of the cultural appeal and commercial significance of the CSL, we’ll continue to watch this legal battle with interest.

Foul play in Indian amateur baseball 

The Competition Commission of India (CCI) has raised serious concerns with the conduct of the Amateur Baseball Federation of India (ABFI). Following a complaint from the Confederation of Professional Baseball Softball Clubs, the CCI has preliminarily found that the ABFI is in breach of competition law. It is alleged that ABFI abused its dominant position in the nationwide baseball tournaments market by threatening state baseball associations with penalties if they allowed their players to participate in tournaments affiliated with a provider other than ABFI. ABFI has also been accused of scheduling its own events to coincide with such tournaments and of forbidding players from leaving their premises during the event. 

In order to prevent what it described as “brazen and predatory conduct of ABFI”, the Indian competition watchdog issued the ABFI with an interim injunction order, prohibiting it from deterring players’ participation in other tournaments. The CCI has also ordered a full investigation into the alleged conduct. 

It’s worth noting the parallels with Sport & Antitrust proceedings in the EU. The CCI’s investigation comes less than six months after the General Court of the EU’s ruling that eligibility rules imposed by the International Skating Union (ISU), the governing body of professional ice skating, which prevented athletes who participate in events not authorised by the ISU from participating in its events, were in breach of EU competition rules. And just two years have passed since the judgment of the Court of Justice of the EU, which confirmed for the first time that EU law applies not only to sporting activities with economic impact, but also to amateur sports.

Failure to file – Tanzanian investigation of an unlawful merger

Tanzania’s Fair Competition Commission (FCC) has opened an investigation in relation to the transformation of a Tanzanian football club, Simba Sports Club, to a company owned by five local parties. Prior to the deal implemented in 2018, the sports club was fully owned by its club members. Following the preliminary investigation, the FCC alleges that the transformation process resulted in a “change of control” for merger control purposes.

Since the merger was implemented without prior notification and clearance, the regulator has invited the parties to either defend themselves or enter into settlement discussions. The developments in this case are of particular interest, not only because the FCC is seeking to impose the maximum penalty for the first time in its history but also because they could provide more clarity about the interpretation of the currently ambiguous terms “merger” and “change of control” under Tanzanian law. 

The authority has taken the view in this case that the maximum penalty of 10% of the annual turnover of the company involved is justified, based on the nature and extent of the violation, the degree of harassment, the repetitive nature and the unfair advantage gained. 


This year’s developments have confirmed some of our previous observations on the direction of travel of antitrust enforcement in sports. In the US, we could well see a 100-year-old precedent overthrown by legislation. And regulators in emerging and developing jurisdictions are beginning to show they are willing to act aggressively and use their powers if necessary.

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