Saturday, January 14, 2023

Former Advocate General and impeached judge embarrasses top EU court as he bashes his successor's 'Super League' antitrust opinion at Concurrences, Clifford Chance event in Brussels

In most circumstances, a former Advocate General (AG) of the European Court of Justice (ECJ) hits a new low for speaking out publicly against one of his successor's opinions at a time when the judges are deliberating. Such conduct is as distasteful as it is disrespectful, and it was troubling to watch a Concurrences event yesterday that was co-sponsored by Clifford Chance, Compass Lexecon, and one of their mutual clients for that very purpose. But the scandal-ridden career of former Belgian politician, ECJ AG, and ECJ judge Melchior Wathelet sr. has its own coordinate system.

The European Parliament broke "new constitutional ground" when it impeached Mr. Wathelet in the form of a legally non-binding resolution calling for his resignation. The man had encouraged the early release of convicted perverts such as Marc Dutroux, who not entirely unforeseeably went on to murder at least four girls. According to German newsweekly Der Spiegel, he was "embroiled in virtually every Belgian political scandal" besides the Dutroux case, one of which involved toxic waste and a donation by the perpetrators to Mr. Wathelet, who even heaped praise on them.

Mr. Wathelet bookended yesterday's event at the Brussels Plaza hotel with an opening keynote (which went way over time) and his final reflections. In the end he declared himself "pessimistic" that the top EU court would concur with him and the other--less controversial, but also far lower-profile--speakers. The whole multi-hour event was nothing but a thinly-veiled call from Brussels on the Luxembourg-based 15 judges of the Grand Chamber to reject the (actually well-reasoned and balanced) opinion AG Athanasios Rantos handed down in the European Superleague Company v. UEFA case last month.

Without a single exception--which is out of character for Concurrences--speaker after speaker after speaker had only one message: "Don't adopt the AG opinion, or the sky will fall." For the avoidance of doubt, the two journalists who merely moderated the panels--Carmen Perales from PaRR and Bloomberg's Irene García Pérez--cannot be blamed. The Friday the 13th conference was all about propaganda and venting frustration.

The key sponsor was A22, a marketing firm that would like to commercialize a breakaway soccer tournament named European Super League should it ever rear its unpopular head again. At this point, only three professional teams (Real Madrid, FC Barcelona, and Italy's Juventus FC) are supporting A22. Those clubs, partly directly and partly indirectly, are clients of Clifford Chance as well as Compass Lexecon, an economic advocacy firm that also does a lot of work on standard-essential patents. For Clifford Chance, whom I wish luck with the EU antitrust complaints they brought on Spotify's and Epic Games' behalf against Apple, it must be very frustrating to be on the losing track in a case that gets so much media attention. The budget is small (reportedly only a couple million dollars) compared to those tech cases, but no "industry" gets the general public more interested in Europe (and even beyond) than top-flight soccer.

Not only Mr. Wathelet but also a little-known Dutch law professor couldn't hide his skepticism when he said that "if the Court adopts the AG opinion, it may be the end of the Super League project." Somehow A22 and Clifford Chance must have forgotten to brief him: in their spin-doctoring efforts, they claim that the AG opinion favors their cause. But they are inconsistent at any rate as they stress the possibility of the ECJ reaching different conclusions: if the AG opinion was great for them, they'd advocate its adoption.

It is undeniably true that the judges make the decision. Statistically, most judgments are either entirely or materially consistent with the AG opinion. In this case--as I brought up at a recent Madrid conference I attended via Teams--the AG opinion is not just one key player's views: more than 20 EU and European Economic Area Member States, the EU Council (where the governments of the EU Member States cast their votes), the European Parliament, and the European Commission took such positions as well. So far, the so-called Super League has convinced only one Spanish trade judge to the effect of a preliminary injunction and this preliminary reference to the ECJ--and after the case was reassigned to another judge, the PI was lifted, partly for reasons that have now been validated by AG Rantos.

One of the points yesterday's panelists--more accurately, propagandists--were trying to drive home was that those 20+ Member States don't count because it's all just politics. However, the Super League lobbied those governments with help from its lawyers as well as Flint. To no avail, though; apart from Luxembourg, where one of the Super League entities is registered. I wouldn't underestimate the competence of government officials who work on sports policy day in, day out. They know more about the subject than the former German TV exec who is now running A22, the lawyers from Clifford Chance, the hired guns from Compass Lexecon, and the lobbyists from Flint.

Compass Lexecon incredibly makes the conclusory assertion that Super League-style concentration of wealth would benefit smaller clubs, and points to "solidarity" that would be totally voluntary as opposed to structural. It's amazing what they are prepared to say with a straight face, as they must know that the soccer ecosystem is unanimously opposed to the agenda of the three clubs behind this litigation.

Dutch outlier MEP Antonius "Toine" Manders stressed the separation of powers yesterday and said that only in a soccer context, politicians become so involved in litigation. He doesn't see the log in his eye: he personally attended the ECJ hearing in July and gave interviews. He doesn't normally do that either, nor has he been tasked with judicial oversight. Mr. Manders has repeatedly managed to get elected to the European Parliament on different ballots, but has never been put in a position of power. Since I met him a long time ago, I can see why he is ineligible for higher office.

By contrast, a rival event held the previous day featured former Polish professional soccer player and now-MEP Tomasz Frankowski (in the form of a recorded video), who recalled where the vast majority of the European Parliament stands.

The Concurrences event, however, was not only one-sided but also low-quality on average in terms of the background and reputation of the speakers. Take German economist Oliver Budzinski: he was introduced as someone who also does research on Big Tech antitrust matters. In that context, which I follow closely, I had never once heard of him. I asked around, and a top-notch antitrust litigator told me that Mr. Budzinski "does not play a role" in that regulatory context. I looked up some of his papers, including his opposition (potentially due to close ties with Google and/or Amazon) to the EU Digital Markets Act. It makes no sense to me that someone who didn't want stricter antitrust rules for the world's most powerful monopolists simultaneously demands rigid enforcement of existing rules against non-profits.

One attendee asked the panel why a group of 12 private entities (referring to the clubs who founded the Super League, though only three are still actively involved) would be in a better position to "safeguard" soccer values than UEFA, the existing European body. Mr. Budzinski's nonsensical answer was that UEFA, too, is a private (as opposed to governmental) entity. The question was not private vs. public, but inclusion. UEFA has 55 national member associations representing huge numbers of clubs (for instance, Germany alone has more than 30,000 of them). In Europe, there are approximately 50,000 professional soccer players, while the Super League as originally envisioned would have employed fewer than 1,000 of them.

At the LaLiga / Sports and Citizenship conference on Thursday, which I mentioned before, various speakers acknowledged that there is room for improvement in the current system. No one suggested nationalization (that was just Mr. Budzinski's way to restate the question). But a broadbased pyramid of organizations is inherently more representative of the ecosystem as a whole than a cartel of a small number of entities.

Then there was an Italian professor whose slides (overloaded with text, and with multiple typos) would not even make a 10th-grader proud.

An exception among the academics there was Oxford professor Stephen Weatherill because he enjoys a greater reputation than the others combined. But he is not necessarily in favor of the Super League: instead, he'd prefer an EU legislative initiative to reconcile Art. 165 TFEU (the EU's constitutional recognition of the specific nature of sport) with Art. 101 (cartels) and Art. 102 (monopoly abuse). He appears to be concerned that the AG opinion would obviate the need for legislation, though I believe busy European governments and lawmakers consider that fact a plus.

I asked why he thought the ECJ would legislate from the bench (I'm restating it in a shorter form here) when the legislative intent was actually to protect exactly the European Sport Model as it existed when the Lisbon Treaty (with the new Art. 165) was adopted in 2007. Professor Weatherill made a remark according to which legislative intent shouldn't be given much weight. But my point was not about whether legislative intent is the ultimate authority. The ECJ simply has to reconcile conventional competition law with a sports-specific statute. Professor Weatherill and a couple of other speakers faulted AG Rantos for recognizing the constitutional status of the European Sport Model as the EU institutions and 20+ Member States described it in connection with the European Superleague Company case (see the European Commission's 2022 Study on the European sport model (PDF)).

It is not ultra vires for the ECJ to define how a sports-specific statute impacts the interpretation and application of conventional antitrust and cartel rules. And in doing so, why shouldn't the ECJ take heed of what the legislative powers that be had in mind when they adopted the statute and (consistently) when they gave their input in connection with this case?

Professor Weatherill's answer focused on something else, however. He said that if one wanted to turn to the legislative history, it was that sports bodies were seeking an exemption from antitrust rules. Instead, the statute as it stands today was adopted. That argument doesn't convince me: in most cases, one group of stakeholders may not get everything it asks for, but if it gets something very significant, that doesn't mean it lost.

Professor Weatherill sidestepped the actual question. His point was that the AG went too far by reading the European Sport Model into Art. 165 TFEU. But what other model than the one that European lawmakers had in mind then and seek to protect now should the statute be about? When there is such widespread consensus--apart from the speakers at yesterday's event with their minority views--the AG is, in my view, right as a matter of legal policy and cannot be accused of proposing to legislate from the bench.

The ECJ has not set a ruling date. We'll see how long it takes, and what comes out of it. Yesterday's event was inconducive to Concurrences' reputation as a neutral debate organizer and may have been counterproductive for the purposes of A22, its backers, and its advisers. The bankruptcy of their arguments was on display, as was their frustration that their efforts have so far failed to get traction. The ECJ may not be amused that a former AG and judge (whose impeachment was a disgrace for the institution) tries to influence deliberations in an inappropriate form, "courtesy" of Clifford Chance and Compass Lexecon...