Court of Justice FIFA and UEFA Rulings: Super League ban and ‘home grown’ rules

 

 

Court of Justice FIFA and UEFA Rulings: Super League ban and ‘home grown’ rules  

The European Court of Justice has delivered a series of much awaited rulings on the compatibility with EU competition law of rules imposed by football associations FIFA and UFEA.

The Court issued a preliminary ruling stating that rules imposed by FIFA and UEFA forcing any new interclub football project to seek their approval lacked a framework to ensure they are transparent, objective, non-discriminatory and proportionate.  The Court therefore held that the associations were abusing their dominant position when they arbitrarily banned clubs from forming a European Super League.  The associations' rules on approval, control and sanctions also constitute "by object" infringements of Article 101(1) of the TFEU, as well as unjustified restrictions on the freedom to provide services.

In a separate ruling on UEFA rules, the Court found that a rule requiring football teams to include a least eight locally-trained or “home-grown” players could restrict competition. However, it will be for the national court to determine whether those rules restrict competition as a result of their very object or because of their actual or potential effects.  The Court also considered that the rules in question may give rise to indirect discrimination, based on nationality, against players coming from other member states.  In both scenarios, it remains possible for UEFA and the URBSFA to demonstrate that those rules nevertheless encourage recruitment and training, and that they are proportionate to that objective.

European Superleague Company SL v Unión de Federaciones Europeas de Fútbol (UEFA) and Fédération internationale de football association (FIFA) (Case C-333/21) ECLI:EU:C:2023:101

UL, SA Royal Antwerp Football Club v Union royale belge des sociétés de football association (URBSFA) ASBL (C-680/21) ECLI:EU:C:2023:1010

CMA invites comments on Microsoft AI partnership

 

The Competition and Markets Authority (CMA) has published an invitation to comment on a partnership arrangement between Microsoft Corporation (Microsoft) and OpenAI, Inc (OpenAI).

Microsoft has a long-term, multi-billion partnership with OpenAI.  As part of the arrangement Microsoft and OpenAI can independently commercialise resulting AI technologies and Microsoft is the exclusive provider of cloud services to OpenAI.

In the wake of a chaotic week for OpenAI between Sam Altman’s firing and re-hiring as CEO, the CMA notes that there have recently been developments in the governance of OpenAI, some of which involved Microsoft.

It is, therefore, considering whether it is or may be the case that the Microsoft/OpenAI partnership, or any changes to that partnership, have resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.

If the CMA finds that as relevant merger situation exists, it will examine whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services.

The CMA invites comments by 3 January 2024, in advance of launching a potential formal Phase 1 merger investigation.

M&A involving generative AI could lead competition authorities to investigate these transactions. In a dynamic market, markets may be more difficult to define and effects more challenging to anticipate.

The development is timely following my appearance yesterday at a ThoughtLeaders4 Disputes | TL4D webinar on the intersection of generative AI, law, and education! OpenAI's ChatGPT is stirring discussions among legal professionals.

https://www.gov.uk/government/news/cma-seeks-views-on-microsofts-partnership-with-openai

CAT rules in CMA warrant application

 

The Competition Appeal Tribunal has granted the Competition and Markets Authority a warrant to enter and search business premises for the purposes of an investigation under section 25 of the Competition Act 1998.  The CAT refused to grant the warrant in relation to domestic premises.

This was the first time that the CMA made an ex parte and without notice for a UK-wide warrant.  The CAT also refused an application by the CMA that the judgment should not be published.

The CAT was satisfied that the CMA had reasonable grounds to suspect an infringement, for the purposes of section 25 of the Competition Act.

The CAT was further satisfied that there were reasonable grounds for suspecting that there were on the premises identified by the CMA documents falling within the CMA’s powers under section 26 of the Competition Act.

In relation to the business premises, the CAT was satisfied that that there was a risk that the documents would not be produced but would be concealed, removed, tampered with or destroyed, such that the requirements of section 28 of the Competition Act were met. However, in relation to the domestic premises of an individual, the CAT concluded that this was not the case. 

Cases: 1611/13/12/2023 (W), 1612/13/12/2023 (W), 1613/13/12/2023 (W) and 1614/13/12/2023 (W).

Competition and Markets Authority v Another (Judgment (Application for Warrants) [2023] CAT 62

Court of Appeal reinstates CMA’s market investigation into Google and Apple’s mobile ecosystems

 

Court of Appeal reinstates CMA’s market investigation into Google and Apple’s mobile ecosystems

The Court of Appeal has upheld an appeal by the Competition and Markets Authority against a Competition Appeal Tribunal (CAT) ruling which quashed the decision of the CMA to make a market investigation reference into the supply of mobile browsers and the distribution of cloud gaming services in the UK.

The case has its origins in the CMA’s final report on a market study in June 2022, where the CMA consulted on making the market investigation reference. The market investigation reference was made on 22 November 2022.

The Court of Appeal held that the CAT had erred in its interpretation of the Enterprise Act in quashing the decision to make a market reference. The section 131B time limits apply to the consultation process within a market study and do not limit the CMA's standalone power to make a market investigation reference under section 131 of the Enterprise Act.

The Court of Appeal rejected the CAT’s interpretation of the CMA’s jurisdiction to make a reference, stating that this could have “serious consequences”, entailing that the CMA does not have jurisdiction to investigate Apple or Google for similar conduct in later years following a market study. The Court of Appeal said that there is “no overarching principle that an undertaking is entitled to be investigated once, and once only”.

Competition and Markets Authority v Apple Inc and others [2023] EWCA Civ 144

CMA announces reform plans for merger review process

 

The Competition and Markets Authority is consulting on changes to its mergers jurisdictional and procedural guidance (CMA2).

The main changes include:

·        Opportunities for merger parties to engage directly with the CMA early in the process.

·        An "interim report" will be published earlier in the process, replacing the provisional findings report and setting out the CMA's provisional assessment of the impact of the merger on competition.

·        Earlier without prejudice remedy discussions between the CMA and merger parties.

The issues statement will be abandoned and, instead, the CMA will invite submissions on the Phase 1 decision. greater opportunities for economic experts to engage with the CMA's experts.

There are other changes to the revised guidance to reflect developments in the CMA's practice and in case law. These mainly relate to confidentiality and disclosure.

While the reforms reflect some important streamlining of the CMA’s merger review process, the CMA has declined calls to grant merger parties full access to evidence provided by third parties.

The CMA has also published for consultation a draft of the proposed new Phase 2 Remedies Form and a revised draft Template Waiver.

A revised draft Merger Notice is also available for comment.

Interested parties should provide responses to the consultation by 8 January 2024.

https://assets.publishing.service.gov.uk/media/655788a4046ed400148b9b2f/Consultation_document_Nov23.pdf

National Security and Investment Act – Call for Evidence

 

 

On 13 November the Cabinet Office issued a call for evidence in relation to the National Security and Investment Act 2021 (NSIA) to collect views on how the national security and investment regime can be more business friendly.  It also sought views on how the provisions could be refined while protecting national security.

Specifically, the call for evidence is designed to identify views on:1) the impact of the NSI regime on businesses and investors, 2) whether the scope and requirements of the NSI regime are proportionate and effective, and 3) how stakeholders understand the NSI regime.

The NSIA replaced the Enterprise Act in January 2022.  It allows the government to scrutinise and intervene in acquisitions in 17 sensitive industries that could harm the UK’s national security.  The government has cleared around 93% of transactions it has reviewed within 30 working days, while it has remedied or prohibited 17 deals.

There are concerns that the NSI regime may be cast too widely; not least since the rules can even require companies with no UK operations to notify investments.

The call for evidence may be regarded as a natural evolution of a maturing regime. The rules require a review within three years of implementation so the timing of the  consultation is not surprising.

Responses to the call for evidence should be submitted by 15 January 2024.

 

https://www.gov.uk/government/calls-for-evidence/call-for-evidence-national-security-and-investment-act

CAT ruling in collective proceedings against Apple in battery throttling case

The Competition Appeal Tribunal has granted, subject to funding matters, a collective proceedings order (CPO) brought by Mr Justin Gutmann to start collective proceedings under section 47B of the Competition Act 1998 against Apple Inc., Apple Distribution International Limited, and Apple Retail UK Limited (together, Apple).

The application relates to alleged breaches by Apple of Article 102 TFEU prior to 31 December 2020.  The application claims that the abuse derives from Apple's lack of transparency in failing to inform consumers of issues surrounding battery health of their iPhones and the resultant impact on the performance of their iPhone, such that Apple would have been required to compensate them.

The CAT first rejected Apple's strike-out application, which submitted that Mr Gutmann had not established any abuse on the facts.

However, the CAT found that there was a reasonable prospect of Mr Gutmann showing at trial that the negative impact on the performance of affected iPhones was sufficiently material.

The CAT also found that the methodology being advanced by Mr Gutmann offered a realistic prospect of establishing loss on a class wide basis if he established relevant facts at trial. In addition, it was just and reasonable that Mr Gutmann act as the class representative in these proceedings.

However the claimants have informed the CAT they may need to alter their funding arrangements following the Supreme Court’s recent ruling in PACCAR in July, 2023.

The claimants have also stated that Apply has settled a similar class action in the US in August 2023 for approximately USD500 million.

Mr Justin Gutmann v Apple Inc and others, judgment [2023] CAT 67