FC SWIFT HESPERANGE, a Luxembourg football club, is bringing an action against the Fédération Luxembourgeoise de Football (FLF) and UEFA before the Tribunal d’arrondissement de Luxembourg, requesting a preliminary ruling from the CJEU for infringement of free competition (Article 101 TFEU), free movement of capital (Article 63 TFEU), free movement of workers (Article 45 TFEU) and freedom to provide services (Article 56 TFEU).
Indeed, SWIFT HESPERANGE denounces the illegality of various UEFA and FLF rules: UEFA and FLF rules prohibiting clubs from creating and running transnational competitions (e.g. a BENELUX league or even and for instance a pan-European competition); UEFA and FLF rules imposing quotas for “locally trained players”; FLF rules imposing a financial scale for national transfers; FLF transfer rules violating the BOSMAN judgment and FLF rules prohibiting clubs from incorporating as commercial companies.
This conglomeration of rules, which are in direct conflict with EU law, effectively condemns SWIFT HESPERANGE to remain a micro-enterprise forever.
LEOPARD, one of the main sponsors of the club, and a supporter, thus representing the interests of the supporters (consumers in the sense of EU law), are co-claimants, together with SWIFT HESPERANGE. Both the sponsors and the supporters are indeed also victims of these violations of EU law.
The claimants are represented by Jean-Louis Dupont and Martin Hissel (“Dupont-Hissel”), Sébastien Schmitz (“Clifford Chance Luxembourg”) and Sébastien Engelen (“Contrast Law”).
1. FC SWIFT HESPERANGE, a Luxembourg football club, is bringing an action against the Fédération Luxembourgeoise de Football (FLF) and UEFA before the Tribunal d’arrondissement de Luxembourg for damages, requesting a preliminary ruling from the CJEU on the grounds of infringement of free competition (Article 101 TFEU), free movement of capital (Article 63 TFEU), free movement of workers (Article 45 TFEU) and freedom to provide services (Article 56 TFEU)
2. Firstly, UEFA, based in Switzerland and composed of a majority of non-EU members, has adopted and implements rules imposing on all football clubs and in particular on FC SWIFT HESPERANGE, under penalty of severe sanctions, to operate sportingly and therefore economically only within the (very narrow…) limits of Luxembourg territory. FC SWIFT HESPERANGE is therefore structurally condemned to remain a “micro-enterprise”, whereas the city of Luxembourg and its surroundings, the headquarters of FC SWIFT HESPERANGE, allow (and deserve!) the development of a football club, which would have nothing to envy – for example – to clubs such as Atalanta Bergame, Cologne or Valencia.
3. The UEFA rules, taken over by the Luxembourg Football Federation (“FLF”), prohibit FC SWIFT HESPERANGEfrom joining forces with other clubs from other Member States (e.g. the top Belgian and Dutch clubs, or even Irish clubs) to create a transnational competition that would allow all the clubs involved to develop and offer their fans, the consumers, a better quality of entertainment (product). Indeed, such a “Benelux League” or even “North See League” (just for the sake of argument) would then have the critical mass to guarantee a football club competition, a “regional league”, whose quality could match that of (for example) the French Ligue 1. The clubs of this “BNL” or “NSL” that will then qualify for pan-European competitions will then be strong enough to participate effectively in these European tournaments, thus improving their quality.
4. This territorial lock-in, which penalises all clubs based in smaller Member States, is in itself a violation of Articles 101 and/or 102 TFEU and reflects UEFA’s unwavering desire to maintain a total monopoly on transnational and pan-European competitions.
5. According to the CJEU, agreements (in this case the statutory provisions of UEFA and the FLF) which operate within the EU a territorial compartmentalization (especially if it is a compartmentalization on a national basis!) give rise to extremely serious restrictions of competition and therefore violate Article 101 TFEU (see in particular the Consten-Grundig, Ping and Pay-TV judgments). There is also an infringement of the freedom to provide services (Article 56 TFEU) since all transnational services that such competition would generate are prevented ab initio.
6. A quick overview of the European territory shows that the “UEFA territorial model” structurally deprives some 20 (out of 27!) Member States of “premium club football”. To illustrate this aberration, here are a few capitals, therefore the big cities, whose flagship club has no real chance of regularly participating (or even just participating …) in the UEFA Champions League and even less of performing there: Vienna, Brussels, Sofia, Nicosia, Zagreb, Copenhagen, Tallinn, Helsinki, Athens, Budapest, Dublin, Riga, Vilnius, Prague, Bucharest, Bratislava, Ljubljana, Stockholm and of course Luxembourg. The same applies to other important cities in these same Member States.
7. The root of the problem lies in the refusal of UEFA and its federations to change their territorial concept following the BOSMAN ruling. Indeed, on 15 December 1995, the football industry was revolutionised by the sudden introduction of a single labor market throughout the European Union. Suddenly, the best young Belgian player was no longer forced to sign for one of the two or three main Belgian clubs: he was free to sign for Juventus or Bayern, which he certainly did. However, UEFA and its federations did not take decisions to adjust the production market to the new realities of the labor market. On the contrary, they have kept all the clubs in the ‘small’ states in their national straitjackets… to the detriment of all their fans (consumers). This dichotomy between European freedom in the labor market and national restriction in the production market makes any claim by UEFA and its members to be the defenders of “sporting merit” completely fictitious.
8. This territorial compartmentalization on a national basis is mainly the result of Articles 49 and 51 of the UEFA Statutes, as well as similar articles in the statutes and/or regulations of each member association. In the case of the FLF, this includes Article 4 of its Statutes, which provides that “(…) the Statutes, regulations, directives and decisions of FIFA and UEFA (…) form an integral part of the Statutes of the FLF (…)“.
9. The rules for the authorization of international club competitions, which were suddenly adopted on 10 June 2022 by the UEFA Executive Committee, do not solve this problem in any way, since these rules state that they do not apply to “Benelux” or “North Sea” type competitions, which are the ones primarily envisaged by SWIFT HESPERANGE. Moreover, these rules are designed to prevent any real competition to UEFA’s flagship competitions. Therefore, they prohibit both a “Benelux” league and, for instance, a pan-European competition.
Indeed, a reading of these rules reveals that they are a smokescreen, whose purpose is to try to conceal UEFA’s determination to perpetuate its monopoly and to bury in the bureaucratic maze any real attempt at innovation by potential competitors. This foreclosure effect is further reinforced by forced arbitration before the “Court of Arbitration for Sport”, which is established in Switzerland and is therefore not bound by any real respect for EU law.
10. Secondly, FC SWIFT HESPERANGE questions the legality, both in terms of free competition (Article 101 TFEU) and in terms of the free movement of workers (Article 45 TFEU), of the rules put in place by both UEFA and the FLF, relating to “locally trained players”.
These rules are already the subject of a preliminary ruling procedure (case C-680/21), currently pending before the CJEU.
According to the FLF rules, on the match sheet comprising 16 players, at least 5 of them must be players who obtained either their first licence or a licence before their 14th birthday from the FLF. Or players who have been trained for at least 5 years between the ages of 15 and 23 within Luxembourg clubs. In short, these are essentially young Luxembourgers, which constitutes a frontal violation of the BOSMAN ruling, which prohibits the rules of international federations imposing “nationality quotas“. Moreover, at least two of these five “HGP” must be starting the game.
11. Such rules, which are the result of a comprehensive plan ordered by UEFA in 2005, make it even more impossible for a Luxembourg club to develop economically, given the narrowness of its recruitment base.
12. Thirdly, SWIFT HESPERANGE denounces the FLF’s rules organizing a scale of transfers between Luxembourg clubs. This is a real “price fixing” which constitutes an extremely serious violation of Article 101 TFEU.
The FLF rule (article 82 of the regulation “on licensed members, national and international transfers“) which prohibits a player returning to Luxembourg from signing up with all potential employers, with the exception of the one who was his employer before the worker concerned exercised his right to free movement by leaving Luxembourg and signing up with an employer in another Member State, is also denounced. Such a provision is truly “pre-BOSMAN” since it has the effect of subjecting a worker to the goodwill of an ex-employer.
Article 32 of the same regulation states that, if a player is permanently transferred from club A to club B, he is bound to remain in club B for at least 3 seasons, which is also blatantly “pre-BOSMAN”.
Finally, Articles 17 and 18 as well as 41 to 46 of the same FLF Internal Regulations, insofar as they stipulate that, although a given club may transfer a higher number of players during a given transfer period, only 5 “JTs” (transferred players) may appear on the match sheet and this for the entire season following the transfer (players over 23 and under 33 years of age qualify as “JTs”), violate the right to free movement guaranteed by Article 45 TFEU and Article 101(1) TFEU.
13. Fourthly, SWIFT HESPERANGE denounces the illegality of Article 15 of the FLF regulations “on licensed members, national and international transfers” which provides that “a football club may not be constituted in the legal form of a commercial company” and that “no trade in financial transactions may emanate from a football club”.
In other words, the FLF condemns SWIFT HESPERANGE to be and remain a non-profit association and therefore prohibits it from developing substantial economic activities. Such a restriction prevents any investor established in another Member State from providing capital to SWIFT HESPERANGE(or to any other Luxembourg club), with a view to contributing to its sporting and economic development or to buying this club.
This is therefore an unjustified obstacle to the free movement of capital guaranteed by Article 63 TFEU as well as a restriction of investments, formally prohibited by Article 101 TFEU.
14. SWIFT HESPERANGE therefore requests the Tribunal d’arrondissement du Luxembourg to refer the following questions to the CJEU for a preliminary ruling:
1) Do Article 15.1 of the “Internal Regulations of the Luxembourg Football Federation on licensed members of national and international transfers”, which provides that “a football club may not be constituted in the legal form of a commercial company”, and Article 15-4 of the same regulations, which provides, inter alia, that “no trade in financial transactions may emanate from a football club”, create unjustified and/or disproportionate obstacles to the free movement of capital as guaranteed by Article 63 TFEU? In addition, should the obstacles created by these rules be considered as unjustified and/or disproportionate restrictions of competition within the meaning of Article 101 TFEU?
2) Do UEFA’s “home-grown players” rule in the regulations of its various inter-club competitions (e.g. Article 45 of UEFA’s Champions League regulations), which is binding on all clubs wishing to participate in these inter-club competitions, and/or Articles 17 and 18 of the “FLF’s Internal Regulations on Licensed Members, National and International Transfers” create unjustified and/or disproportionate obstacles to the free movement of workers as guaranteed by Article 45 TFEU? In addition, should the obstacles created by these rules be considered as unjustified and/or disproportionate restrictions of competition within the meaning of Article 101 TFEU?
3) Do articles 31 to 36 of the “FLF Internal Regulations on Licensed Members, National and International Transfers”, insofar as they impose on all Luxembourg football clubs a scale of prices for national transfers, constitute a decision of an association of undertakings restricting or distorting competition, insofar as it has the object or effect of “directly or indirectly fixing prices (…)” (Article 101.1 a. TFEU), and thus contrary to Article 101 TFEU?
4) Does Article 32 of the “FLF Internal Regulations on Licensed Members, National and International Transfers”, insofar as it requires a player who has been permanently transferred from one Luxembourg club to another to remain there for a minimum of three seasons, constitute an infringement of Article 45 TFEU as well as a decision of an association of undertakings restricting or distorting competition and thus contrary to Article 101 TFEU?
5) Does Article 82 of the “FLF Internal Regulations on Licensed Members, National and International Transfers”, insofar as it prohibits a worker who has left Luxembourg to take up employment in another Member State, when returning to Luxembourg to seek employment, from applying to and taking up employment with all potential Luxembourg employers (football clubs) except his or her former Luxembourg employer, violate the right to free movement guaranteed by Article 45 TFEU? Since this alleged infringement of the right to free movement results from a decision of an association of undertakings, is there also an infringement of Article 101(1) TFEU?
6) Do Articles 17 and 18 and 41 to 46 of the same FLF Internal Regulations, insofar as they stipulate that, although a given club may transfer a higher number of players in a given transfer period, only 5 “JTs” (transferred players) may be included on the match list for the entire season following the transfer (bearing in mind that “JTs” are players over 23 and under 33) violate the right to free movement guaranteed by Article 45 TFEU? Since this alleged infringement of the right to free movement is the result of a decision of an association of undertakings, is there also an infringement of Article 101(1) TFEU?
7) Articles 49 and 51 of the UEFA Statutes, insofar as they result in clubs being obliged to operate solely within the limits of their national territory, unless authorised by UEFA and the national federations concerned, as well as Article 4 of the FLF Statutes, which provides that provides that “(…) the statutes, regulations, directives and decisions of FIFA and UEFA (…) form an integral part of the statutes of the FLF (…)” create unjustified and/or disproportionate obstacles to the freedom to provide services, as guaranteed by Article 56 TFEU? In this respect, can an infringement of Article 56 TFEU result, inter alia, from the fact that neither UEFA nor the FLF are subject to a transparent, non-discriminatory procedure by any public authority – in order to allow the creation of a “Benelux League” or even pan-European type competition, the result of which is subject to the full jurisdictional control of a European Union state judge, concerning the adoption of decisions aimed at authorising or refusing, in particular with regard to any candidate organiser, the participation of clubs from different national federations that are members of UEFA in a transnational competition that they would like to create? In addition, should the obstacles created by these rules be considered as unjustified and/or disproportionate restrictions of competition within the meaning of Article 101 TFEU or as an abuse of a dominant position within the meaning of Article 102 TFEU? In particular, in application of the OTOC and MOTOE judgments, should Articles 101 and 102 TFEU require that, in the case of associations of undertakings in a situation of structural conflict of interest, this conflict of interest be resolved either by a split between the role of organiser of competitions and that of “gatekeeper” or, in the infinitely alternative, by the establishment by a public authority of a transparent, objective, non-discriminatory procedure subject to the review of the EU state courts?
8) Do the UEFA Authorisation Rules governing International Club competitions, adopted by the UEFA Executive Committee on 10 June 2022, constitute an abuse of a dominant position within the meaning of Article 102 TFEU and/or unjustified or disproportionate restrictions within the meaning of Article 101(1) TFEU, taking into account in particular the structural conflict of interest in which UEFA finds itself as the sole organiser of transnational competitions in Europe and the self-appointed regulator of that same market? More specifically, are these rules contrary to Articles 102 and/or 101 TFEU :
– in that they provide for a marginal proportionality test in favour of UEFA, whereby a UEFA decision can only be considered disproportionate if it is manifestly unreasonable, instead of the test that the CJEU commonly applies to companies, namely whether less restrictive measures exist?
– in that they impose on the candidate organisers a forced arbitration before the CAS, established in Switzerland, and not bound by EU law, such a mechanism appearing prima facie incompatible with the Achmea case law as well as with Article 47 of the EU Charter of Fundamental Rights?
– in that the criteria imposed on candidate organisers (in particular those set out in Article 7.4) make it impossible in practice for a third party to organise a transnational competition that aims to compete with the competitions organised by UEFA?
– Finally, do these rules and behaviours also violate Article 56 TFEU?
9)Is a SWIFT HESPERANGE fan, having purchased either an annual season ticket or tickets to specific matches, to be considered a consumer within the meaning of Union law and thus of Directive 2014/104/EU and, as such, assuming that all or some of the contested UEFA and FLF rules are declared to be contrary to Articles 101 and/or 102 TFEU, he has necessarily suffered damage, in that those rules prevent the growth of the club he supports and therefore affect the quality of the entertainment he buys, which damage should therefore be compensated, if necessary ex aequo et bono as provided for in Article 17. 1 of the said Directive?
15. Once these questions have been answered, the District Court of Luxembourg – thus enlightened – will be able to compensate the damage suffered by FC SWIFT HESPERANGE and declare the UEFA and FLF rules contrary to the above-mentioned provisions of the public policy of Union law null and void.
16. LEOPARD, one of the main sponsors of the club, and a fan, thus representing the category of supporters (who are consumers of the “football product” within the meaning of EU law), are co-plaintiffs, together with SWIFT HESPERANGE. Both the sponsors and the fans are in fact also victims of these violations of EU law, since they affect the quality of the spectacle they sponsor or purchase.
The plaintiffs are represented by Jean-Louis Dupont and Martin Hissel (“Dupont-Hissel”), Sébastien Schmitz (“Clifford Chance Luxembourg”) and Sébastien Engelen (“Contrast Law”).
