Article 101
(ex Article 81 TEC)
1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
- any agreement or category of agreements between undertakings,
- any decision or category of decisions by associations of undertakings,
- any concerted practice or category of concerted practices,
which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
This is the relevant section of the European treaty. The wording is unequivocal: limits and/or controls on investment are clearly "prohibited" and any decisions based on such an agreement (eg the sanctions imposed on the nine "offenders") "shall be automatically void." This will NOT be the case ONLY if the agreement actually promotes technical or economic progress AND brings benefits to consumers WHILE NOT restricting the rights of undertakings more than strictly necessary or which allows for the elimination of competition.allow for the elimination of competition.
This clause expresses quite explicitly a desire to protect the right to invest, to prevent any interference with that right and illustrates the fundamental principle of the treaty, that investment is an important means of bringing benefits benefits to the consumer and in terms of economic development. It is thus inconceivable that the ECJ would accept as a justification of the break even rule, that Berlusconi has been losing 100 million euros a year or that certain rich, successful clubs would find it harder to compete with PSG or City. It would find it hard to understand why or how restricting investment at City and PSG or anywhere else contributes to financial stability at any other club. It is hard to accept that restricting investment makes football anything but less competitive in sporting terms. A further problem for UEFA is that financing investment through borrowing is a normal practice in every other area of business life, and law suits for anti-competitive behaviour would fly if anyone suggested that Tesco could not borrow to invest, to make up ground lost to other supermarkets recently. Here the connection between investment and progress for undertaking and consumer is more evident than in football, but is of the same nature. Any claim by ASDA that investment by Tesco should be stopped because it might make ASDA less competitive would be laughed out of court, but this is the view of competition that UEFA wants the ECJ to espouse. This is not a "sporting exception" but is asking the ECJ to reject the fundamental principles underlying competition law in Europe, and replace them with a completely different, not to say contrary, set of principles.
Nor can UEFA pull the "by invitation only" rabbit out of the hat. UEFA is clearly an association of undertakings and, in the case of the CL, it is not acting as a governing body at all, but as a competitor to the clubs. It has laid down clear criteria to take part in an "open" competition, but it enjoys a privileged ctatus - it alone sells the TV rights, it competes for sponsorship, won't allow non-sponsors to "appear" on TV and distributes money to the participants as prizes. To refuse an invitation to a club which qualifies on grounds other than the sporting criteria would be to "apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage" and would be one further breach.
That's my case, I suspect M. Dupont's is much more detailed but not greatly different and I can't see how the court cannot find in his favour. I'm not sure that UEFA have actually taken a great deal of legal advice, unless M. Berlusconi is acting for them! Certainly Platini has never come remotely near an explanation of how the law allows the regulations he has put in place. Certainly in the Bosman case UEFA relied on an argument that the law didn't apply because UEFA didn't think it was good for football. Can't try that one again!