On 20 December 2018, the Belgian Competition Authority (the "BCA") decided to close its investigation into allegedly anticompetitive practices by the Fédération équestre internationale ("FEI"), the body governing horse-jumping competitions.
The BCA decision is the latest development in a long-running legal saga in the equestrian sector.
Following a complaint by Global Champions League ("GCL") alleging that the exclusivity clause contained in the General Regulations of the FEI was anticompetitive, the BCA imposed on 27 July 2015 interim measures temporarily suspending the exclusivity clause at issue (See, Van Bael & Bellis on Belgian Business Law, Volume 2015, No. 7, p. 4, available at www.vbb.com). This decision was upheld by the Brussels Court of Appeal on 28 April 2016 (See, Van Bael & Bellis on Belgian Business Law, Volume 2016, No. 5, p. 4, available at www.vbb.com).
In January 2017, GCL, Global Champions Tour ("GCT") and FEI announced that they had reached a settlement, materialised in a memorandum of understanding ("MoU"), pursuant to which FEI approved the GCL events, the parties also agreed on rules governing participation at GCL and GCT events and GCL withdrew its complaint to the BCA.
On 13 November 2017, a Dutch horse rider based in Belgium and horse-riding stables established in Belgium lodged a new complaint with the BCA on the ground that the MoU was anticompetitive.
As a result, the BCA imposed interim measures on GCL, GCT and FEI on 20 December 2017 (See, Van Bael & Bellis on Belgian Business Law, Volume 2017, No. 12, p. 5, available at www.vbb.com) which were coupled with penalty payments on 13 April 2018 (See, Van Bael & Bellis on Belgian Business Law, Volume 2018, No. 4, p. 5, available at www.vbb.com). However, on 27 June 2018, the Brussels Court of Appeal annulled the decision of the BCA of 20 December 2017 due to inappropriate reasoning and then held on 7 August 2018 that the members of the Competition College who had adopted the annulled decision could not reassess the case (See, Van Bael & Bellis on Belgian Business Law, Volume 2018, No. 8, p. 3, available at www.vbb.com). After the BCA reassessed the case with a differently composed Competition College, it decided to reject the requests for interim measures because of insufficient evidence (See, Van Bael & Bellis on Belgian Business Law, Volume 2018, No. 10, p. 4, available at www.vbb.com).
The BCA found in a preliminary assessment that three practices potentially infringed competition law on the market for the organisation and commercial exploitation of international, five-star horse-jumping competitions.
First, the BCA took issue with the lack of transparency characterising the FEI's approval procedure. The FEI required its bureau to approve all competitions before the latter could be scheduled in the official FEI calendar. However, FEI's General Regulations did not contain any procedural rules or deadlines applicable to the decision-making process. Consequently, FEI's bureau enjoyed broad discretion in approving or rejecting an application, which in turn allowed it to control or prevent new organisers from entering the market.
Second, the BCA found that the penalties imposed on athletes, horses and officials who participated in competitions not approved by FEI's bureau - the so-called unsanctioned events - could likewise restrict competition. FEI's General Regulations allowed it to impose penalties of six months (renewable) on any athlete, horse or official who had taken part in such an unsanctioned event. This rule had been introduced in 2012 and had, since then, been applied mechanically and without regard for special circumstances. According to the BCA, this inherently prevented participation by athletes, horses and officials in unsanctioned events, leading to the de facto exclusion of independent competition organisers.
Third, the BCA objected to the possibility for existing competition organisers to prevent new entrants from accessing the market through FEI's General Regulations rules regarding overlapping dates. These rules provided that in the case of (late) applications by aspiring competition organisers, existing organisers of competitions of the same level and which could be affected by the new competitions could raise objections to the application and request that the dates of the new event be modified. The BCA noted that existing organisers would object to new competitors whose events partially or completely overlapped with their own competitions in an effort to protect their economic interests. Such a possibility allowed for the exclusion of new organisers. In addition, the FEI was in a position to distort competition and to engage in market and athlete allocation.
Following the above preliminary assessment, the FEI decided to submit commitments to the BCA.
First, the FEI promised to enhance the transparency of its approval procedure. In a document entitled "FEI Policy for approval of series", the governing body clarifies all steps which an applicant has to follow in order to obtain approval.
Second, the FEI modified its General Regulations relating to penalties applicable to athletes, horses and officials who participated in unsanctioned events. The imposition of such penalties is now subject to procedural safeguards. In addition, penalties will be replaced by a so-called "no-fault finding" whenever the athlete, horse or official has participated in a competition which should have been approved by the FEI (but was not, due to administrative errors) or in exceptional circumstances. The FEI may now also replace the penalty with a warning.
Third, the FEI committed to modify the General Regulations to the extent that these allowed competition organisers to object to applications by potential competitors. Instead, existing organisers will only be able to provide the FEI with information that could allow the FEI to reject a late application for enrolment on the official calendar. Further, such a rejection will have to be reasoned.
The BCA decided that these commitments adequately address its concerns. Consequently, the BCA closed its investigation without taking a position on whether the General Regulations infringed competition law.
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