UK Government v The FA Cartels

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UK Government v The FA Cartels

UK & EU Competition Law

Scottish football clubs could sue the FA and any other opposing football authorities in Competition Law for orders forcing their entry to the English football leagues. They could do so in the Court of Session in Edinburgh. It would be Bosman for the clubs.

That was Scottish clubs’ only route to the FA Premier League. In his 14 years since 2001 denying that there was one, Richard Scudamore, its former chief executive, was wrong for at least 12 of them.

Since 2009, UEFA have made it clear that it would not oppose that. The SFA has now indicated likewise. The Football Conference has suggested the possibility of clubs being admitted to its premier division, England’s fifth tier.

The English FA, the FA Premier League and the Football League now are the only bodies still insisting on the geographic division of professional football markets in the UK by opposing Scottish clubs’ move. The clubs’ case in EU & UK Competition Law was its prime lever to force or override those bodies’ consent. This whole issue is about restrictive trade practices.

The clubs’ case would be founded on two pillars of UK competition law, Chapters I & II of the Competition Act 1998. They are applied in accordance with EU law and are directly enforceable by private undertakings in the ordinary courts.

The clubs had a good prospect of success. In essence, their case was that they are a business undertaking that should be free to provide its services as a football club to the buyers of those services anywhere in the UK. That the buyers are, principally, the organisers of domestic football league tournaments, who distribute shares of revenue in return. That the English football authorities are cartels which abuse their dominant position on those markets in the UK by having rules which exclude professional clubs that do not play their home games in England or Wales. That is a hard core competition abuse, worse than price fixing and Scottish clubs would have had a good case in principle.

The English authorities would have had two possible defences, on which they would have had the burden of proof. Neither would have, in my view, succeeded.

The first, “the sporting exception for fundamental rules of the game”, would require them to show that their rules, which exclude Scottish clubs from the English game, are essential to their conduct of the sport and only have an incidental economic impact. That Welsh senior clubs participate in their leagues and that those rules have helped create a vast and growing disparity in income between Celtic and Swansea City, a club with no comparable history of on-field success who can now consistently out-bid Celtic for on-field talent, are facts that demonstrate how difficult it would be to prove this defence.

The second, “the competition justification” would have required the English authorities to prove that those rules were, in practice, more pro-, than anti-, competitive. That is to say, the splitting of UK football markets produces better economic results for clubs, fans and other consumers throughout the UK. For that, the English authorities would, at least, need to prove that Scottish clubs’ admission to the English game would lead to their league matches producing less revenue by attracting smaller crowds and less viewers. Clubs would not have had to prove the opposite, though plainly they would have had a good prospect of doing so.

The UK Government now accepts Scottish clubs’ case and rejects the FA defences, that the clubs have been the victim of a civil wrong by the English authorities. Ending anti-competitive practices is a fundamental aim of Competition Law and a court order requiring them to change their rules and admit Scottish clubs who can meet the criteria for a 20,000 capacity stadium would do that in this case.

The FA could not require Scottish clubs to enter at the bottom of the English National League System. The victim of a civil wrong must, so far as the court can, be put in the position it would have been had the wrong not been committed. If Mr Scudamore and his colleagues have, indeed, been saying “no” consistently for 16 years, then the clubs has been wronged continuously since, at least, 2000 when the Competition Act came into force. Had clubs been admitted then, where, is it likely, they would be now? With evidence of their past achievements, domestically and in Europe, their gates and their revenues, even in a smaller league and over years, there would be a strong argument that they should be admitted to the Championship, at least.

The UK Gov could not refuse clubs a remedy just because it might “open the floodgates” to other cross-border club transfers. UK Competition Law requires the ordinary courts to give private businesses, like football clubs, effective remedies. Its whole purpose in giving them rights is to have them do the job of enforcing that law by obtaining court orders that bring market abuses to an end.

In any event, the likely number of cross-border transfers would be limited. While Celtic, Rangers, Aberdeen, Dundee, Hibs, Hearts and perhaps one or two other Scottish clubs might, on the same grounds, benefit from entry to the English leagues, for many others it would be unwise. Only Celtic would have a similar case for entry to the Premier League division. Inverness CT, if they got into League 2, would likely find their supporters less interested in fixtures with Exeter City than with Ross County, their broadcast income little higher and their wage, travel and other costs substantially greater. If they stayed, they would be amongst the biggest fish left in the Scottish pool, with better prospects of domestic success and European qualification.

Football authorities are not above the law. Since the Bosman case, FIFA and UEFA have repeatedly lobbied for EU legislation and, latterly, non-binding declarations that the splitting of domestic football into national territories within the EU is, nonetheless, compatible with competition law. They have been consistently refused.

What, probably, stopped clubs going to court in the past, were the old rules in FIFA’s, UEFA’s and the national associations’ constitutions which prohibited clubs from taking action against any football bodies in the ordinary courts.

Although courts in the UK were unlikely to give effect to such prohibitions, especially in a competition abuse case, the EU Commission insisted on their removal from FIFA’s rules, in so far as they affect player transfers, which was scope of the Bosman case it was then dealing with at that time.

While Scottish clubs were competing at the top level in Scotland and trying to be competitive in Europe, with all the expenditure on players, staff and everything else that that required, they may have assessed the risk as too great in the past.

Now, however, the UK Government has insisted on the FA complying fully with UK & EU Law. The FA were given six months in October 2016 by the Minister of Sport, Tracey Crouch to comply or they will face legislation in addition to the withdrawal of £40 million Government financial support.

The Commons Select Committee hearing is due to take place over the next few weeks.

Legal Counsel is ready to secure the six Scottish clubs' admission to the EPL & EFL in season 2018/19