Monday, October 10, 2022

Franco-Italian MEP and his EU-level party wrongly accuse European Commission of compromising judicial independence: European 'Super League' case

On Friday, Nokia proudly announced that the European Commission has chosen it to "lead the next phase of Europe's 6G flagship project" named Hexa-X. Imagine for a moment that some Member of the European Parliament would have immediately criticized the Commission, given that various litigations involving Nokia (a couple of which I've discussed on this blog) are currently pending, and would have suggested that the Commission decision unduly interferes with the judicial process. No one in their right mind would seriously want to hamstring the Commission's digital policy efforts.

The equivalent of that has just happened with respect to sports. Emotions often rise high in Europe (as they do elsewhere) around soccer, and the most controversial item in the history of EU sports policy has been--and due to a pending court case continues to be--the failed attempt to form a breakaway league called the "European Super League" in 2021. Shortly before the hearing the European Court of Justice held in mid-July, I discussed how the EC's Directorate-General for Competition (DG COMP) might be able to defend its International Skating Union decision (which was affirmed by the EU General Court, but appealed further to the ECJ) while supporting the European Sports Model in European Superleague Company v. UEFA.

Three months after the hearing and two months before Advocate General Athanasios Rantos will hand down his opinion, the European Commission has now drawn the ire of Sandro Gozi, a Member of the European Parliament who served in the Italian parliament and executive government, but in 2019 was elected to the European Parliament on a French ticket. Whether that makes him the EU equivalent of a carpetbagger is an interesting question, but not the issue here. It is, however, worth noting that Mr. Gozi's Twitter profile prominently displays his allegiance to Juventus FC, Italy's most popular soccer club:

Based in the Piedmontese capital of Turin, "Juve"--nicknamed La Vecchia Signora, "the Old Lady"--is majority-owned by the Agnelli family, one of the largest shareholders in the (now Avanci-licensed) Stellantis automotive group. Juventus is one of only three clubs who still insist that the "Super League" was a great idea and its merits were not understood by the rest of the world.

On Friday, Spanish sports daily AS (where I learned a significant part of my Spanish) reported on a "schism" in the EU--total hyperbole as I'll explain in a moment--over a new cooperation agreement between the European Commission and European soccer body UEFA. Mr. Gozi has formally demanded an explanation from the Commission, asking questions that are as rhetorical as they are accusatory. He implies that the Commission is compromising judicial independence at a time when the ECJ has taken the "Super League" case under adviseement.

The article was then shared on Twitter by an EU-level party, the European Democratic Party (EDP), as whose Secretary General Mr. Gozi has been serving since last year:

The European Democratic Party (EDP) is an EU-level group of national parties. Most--but not all--of its 13 MEPs are members of the Renew Europe group in the European Parliament, which resulted from a de facto merger between the Alliance of Liberals and Democrats for Europe (ALDE) group with French president Emmanuel Macron's République en marche. However, Mr. Macron's movement is not a member organization of the EDP; Mr. Gozi was elected on a different French party's ticket.

Even if we give Mr. Gozi the benefit of the doubt and assume that he had the backing of the entire EDP for that initiative, the fact that a very small party (13 out of the EP's 751 seats) raises a question hardly constitutes a "schism" as AS describes it. Otherwise Brexit would have amounted to the bloc's dissolution.

The Commission has important duties to carry out and cannot put everything on hold because of someone bringing a lawsuit somewhere.

The "Super League" case started in April 2021, and a few weeks later, a Spanish trade judge sua sponte referred half a dozen questions to the ECJ. He was within his rights to do so, but that doesn't mean the Commission has to wait for anybody.

As Commission Vice President Margaritis Schinas explained on Thursday, "UEFA and the European Commission will ensure that UEFA's competitions remain a success story embedded in our European Sport Model." The Commission's press release noted that "[s]tructured around key EU priorities such as climate action, equality for all and social inclusion, the agreement marks an intensification of the long-standing collaboration between the European Commission, UEFA and national European football associations towards using European football as a force for positive change across Europe" (emphasis added). There was a meeting of the minds between the EU Commission and UEFA, which took the shape of "a joint commitment to promoting solidarity between different levels in sport, in particular between professional and grassroots football, the ongoing development of the women's game, fairness, integrity, financial sustainability, competitive balance, gender equality and good governance."

Those are laudable policy goals. But Mr. Gozi is apparently not amused, so he formally posed two written questions to the Commission:

  1. Why was the new Arrangement [sic] between EC and UEFA adopted only in June 2022, and not immediately after the expiration of the previous Arrangement? Why was the Arrangement signed only on 6 October, four months after its adoption?

  2. Why did the Commission deem appropriate to sign a new arrangement while a proceeding is still pending before the CJEU? Did the Commission contemplate the possibility that this agreement could prejudice the independence and impartiality it should have as a guardian of the Treaties intervening in the preliminary ruling proceeding?

The first question relates to none of his business: the Commission is free to let cooperation agreements expire and renew them at a later stage, whatever the reason (such as delays in the negotiation process) may be. The second question is nonsensical for multiple reasons:

  • Whatever the ECJ will decide, it won't outlaw UEFA.

  • Certain Commission decisions are reviewable by the ECJ, but the preliminary-ruling procedure in the "Super League" case is not about the Commission's cooperation agreements. It's about the application of EU competition law.

  • The Commission actually made its policy positions known to the Court. It filed written observations and participated in the oral hearing. And that's simply one of its statutory tasks.

  • The Commission cannot compromise judicial independence because it doesn't appoint the judges. As the EU Council explained again in a recent press release, "[t]he judges and advocates-general are appointed by common accord of the governments of the member states after consultation of a panel responsible for giving an opinion on prospective candidates' suitability to perform the duties concerned." (emphasis added)

    21 member states of the European Economic Area delivered oral argument in July. All of them supported UEFA against the "Super League" and stated their policy reasons. Only two countries had submitted written observations in plaintiff's favor: Luxembourg, which didn't participate in the hearing, and the Czech Republic, which changed its stance between its written submission and the oral hearing.

Mr. Gozi's parliamentary questions are just fake outrage. He presumably knows that he won't discourage the Commission from doing its job. The only plausible purpose of his "questions" is reflected by the exaggerated headline of that article: he wants the court of law and the court of public opinion to believe that the EU institutions aren't really behind the European Sports Model as embodied by UEFA and its member associations.

But the political picture could hardly be more favorable to UEFA:

Speaking to the press after the signing ceremony on Thursday, Vice President Schinas showed on what great terms he is with UEFA President Aleksander Čeferin. The two even publicly addressed each other on a first-name basis. By contrast, Mr. Schinas took a side swipe at Real Madrid's president Florentino Pérez, who had said a few days before that the NFL was commercially outperforming European football (based on a Forbes ranking of team valuations and a single revenue source: a broadcasting rights deal). Such an apples-to-oranges comparison, coupled with a selective focus, comes down to demagoguery and doesn't impress the Commission. Mr. Schinas said UEFA's soccer competitions were doing a lot better than some people suggest. Sports-specialized economists looking at the whole picture (not just at the top level of a sport) would likely agree. Also, the European Super League's launch in 2021--everything fell apart within about two days--didn't inspire confidence that Mr. Pérez and his allies and subordinates have the ability to outexecute UEFA.

I'd like to talk in more detail about the fundamental differences between U.S. and European spectator's sports, but in this context I will focus on an important legal aspect: legitimate sports-related and societal objectives can justify certain restrictions under European competition law (provided that the measures employed are necessary and inherent as well as proportionate to the pursuit of the legitimate objectie) while the Supreme Court of the United States made it clear in NCAA v. Alston that procompetitive justifications are given weight under the rule of reason if they actually are procompetitive as one would narrowly define the term. The Supreme Court cited two of its earlier decision. In National Soc. of Professional Engineers v. United States, justifications that weren't procompetitive in a strict sense (ensuring quality work and protecting public safety) were deemed "nothing less than a frontal assault on the basic policy of the Sherman Act." In FTC v. Superior Court Trial Lawyers Assn., the defendant's "social justifications proffered for [its] restraint of trade" did not make the challenged conduct "any less unlawful." Epic Games also cites those holdings in its appeal against Apple, which will be heard next week.

In other words, UEFA is in a much stronger position than the NCAA ever was (apart from the fact patterns also being disparate) because of the way EU antitrust law is applied to rules, decisions, and other actions by sports bodies. All that Mr. Gozi and his club can do is disagree with the Commission, a broad majority of his peers in the European Parliament, and the governments of almost all EU Member States, such as that of the country in which he was elected.