Introduction:
Organized sports have emerged in India and throughout the world in a startlingly distinct way. On the one hand, historically popular sports like cricket and football have survived and evolved in terms of the amount of money involved and societal impact. Professional sports, on the other hand, have developed into previously unthinkable forms. Cricket has grown into a worldwide enterprise, and it has even become a religion in some places, such as India. Sports contribution to the Indian economy cannot be undermined. IPL (Indian Premier League) in itself has a brand value of 4.4 Billion USD[1]. IPL pays the highest salary to sportsmen, just second to the NBA (National Basketball Association) in the world. Competitive sports, on the other hand, have taken on new forms that were previously unimaginable. Esports, for example, is a budding business that has only lately gained popularity but is already generating significant financial success. Unfair trade practices are prohibited under competition laws. Unfair trading practices are illegal, as are monopolistic trade operations, cartelization, and other anti-competitive agreements. Anti-competitive agencies exist for these sectors, to prevent rivals from unfairly gaining access to their target markets. Because of the competitive nature of the sports industry, the implementation of the Competition Act is critical[2]. With the realm of sports constantly evolving and diversifying, the law regulating it must develop accordingly. Competition law has regulated the world of sports for decades, and the interface of the two fields has changed significantly with time.
Competition Law
India is recognized as a newcomer to the competitive world. India’s competition law jurisprudence, on the other hand, is older than that of many other emerging countries. The Monopoly and Restrictive Trade Practices Act[3] (MRTP Act) was India’s first piece of competition legislation, followed by the Competition Act of 2002. The 2002 Act has various objectives by seeking to “prevent practices having an adverse effect on competition, to promote and sustain competition in markets, to protect interests of consumers and to ensure freedom of trade.”[4] India’s Competition Commission is in charge of enforcing competition legislation. In India, Sections 3 and 4 of the 2002 Act are used to investigate competition law violations. Section 3 prohibits anti-competitive agreements “in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India.”[5] The latter prohibits “abuse of dominant position in the country, through unfair purchase conditions, discriminatory pricing, conduct amounting to a denial of market access, tying agreements, etc.”[6] Even though the country’s competition system is relatively new, the CCI has resolved numerous major cases in the realm of professional sports. In India, like in many other nations, sports are governed by numerous sports regulating organizations, each of which wields considerable authority. The Commission has tried several times to curb indiscriminate use of the power and guarantee that the sports business grows fairly.
India in relation to the USA
Unlike the Indian enforcement framework, which is made up of a single piece of law and a single agency, the US enforcement framework is made up of several agencies and pieces of legislation. In the United States, the Antitrust Division of the US Department of Justice (DOJ) and the Federal Trade Commission are in charge of enforcement (FTC)[7]. The former is part of the executive branch of government, whereas the latter, as the CCI, is an autonomous administrative agency.
The Sherman Act, established in 1890, is the oldest federal antitrust legislation, dealing largely with anti-competitive agreements and monopolies exerted by businesses. The Clayton Act of 1914 prohibits exclusive supply, mergers, pricing discrimination, and tying, among other commercial activities. The Sherman Act and the Clayton Act are independently enforced by the Department of Justice and the Federal Trade Commission. If the breach necessitates criminal prosecution, however, the DOJ has exclusive power to prosecute[8].
India in relation to EU
The Treaty on the Functioning of the European Union established the basis for EU competition law (Treaty). The Treaty covers a wide range of topics; nevertheless, the most significant legal progress has been made in the field of competition law, which is covered by Articles 101 and 102.[9] Each component state of the EU also has its national competition authorities and legislations, which are typically relevant to agreements and behavior between EU member states through Law trade practices Appellate antitrust laws. The European Council framed the institutional framework for competition law enforcement because the Treaty did not mention it (Council). The European Commission (EC) was tasked by the Council with the responsibility of ensuring Treaty conformity as well as enforcing, implementing, and developing the European community’s competition legislation and policies. The Indian competition law framework is comparable to the European enforcement system, and the Act’s provisions, as well as the CCI’s powers and functions, are based on the Treaty’s relevant provisions and the EC’s authorities. Though the Act shares many similarities with the enforcement structures in the United States and the European Union, the systems differ substantially in terms of enforcement levels and quality.
Though the legislation shares many similarities with the enforcement structures in the United States and the European Union, the systems differ substantially in terms of enforcement levels and quality.[10]
Precedents
In comparison to the EU and the US, India’s competition law is still in its infancy, and the confluence of sports and the field is still in its infancy. However, the Indian Competition Commission has issued several key rulings in recent years that have allowed us to analyze the different problems posed by this interface. Before digging into topics that form part of and will form part of the sports-competition law interface in the future, the chapter will analyze three important CCI judgments.
Athletics Federation of India Case
The Athletics Federation of India (AFI) took action against its members, including athletes and administrators, in 2015, for promoting marathons that were not sanctioned by the AFI[11]. AFI’s actions were alleged to be anti-competitive under Section 4 of the Competition Act of 2002. The Commission classified the relevant market as “supply of services pertaining to the organization of athletics/ athletic activities in India” as well as “market for services of athletes in India”[12], but because the accusations related to the former, it focused its inquiry on it. The Commission determined that AFI had a dominating position in the relevant market, citing the fact that it is the “apex body in the pyramid structure of administration of athletics/athletic activities in India”[13] and has connections with several international governing bodies. The Commission, on the other hand, determined that AFI had not abused its dominating position, citing the following reasons:
- The minutes of the AGM meeting did not contain anything that contravened the Act’s requirements and was instead advisory.
- The AGM’s decisions were not carried out.
- Approval of AFI is not essential and is not required to organize a marathon/road race and the same can be organized without any prohibitions by AFI or otherwise. More than 96% of marathons/road races are organized without the involvement of the governing body.
It’s worth noting that, in addition to concluding that AFI did not misuse its dominating position, the court also noted potential policy options. CCI has presented a draught policy framework for marathons and road races to the Ministry of Sports in the hopes of resolving existing concerns. However, the policy has yet to be implemented. AFI was found not guilty of violating Section 4 of the Act by the Commission since its measures did not prevent athletes, sponsors, organizers, and other stakeholders from participating in non-AFI sanctioned events. Several private organizations, such as Run India[14], Procam International[15], and India Running[16], organize marathons in the country. While there are no official figures, some data put the increase in marathon participation in India at 154, 78% from 2009 to 2014, with men’s involvement increasing by 7.8% and women’s participation increasing by 26.90%.[17] While there might be several factors driving this increase, the emergence of privately organized marathon events is undoubtedly one of them. As a result, in a market with strong and active competition, AFI’s dominance has had no negative consequences.
Indian Cricket League Case
Another incident of misuse of dominant power was investigated by CCI, and the Opposition Party was found to violate the Act in this case. The Indian Cricket League claimed that the BCCI had exploited its dominating position in several ways, including:
- The use of the Indian Premier League (IPL) as a late effort to adopt the same structure as the Indian Cricket League (ICL) has harmed the ICL and its chances.
- Various stakeholders, such as cricket players, office bearers, affiliations, and venues, are prohibited from participating in any event or match that has not been sanctioned by the BCCI.
- Taking away incentives and effectively banning participants from participating in the ICL.
- Putting pressure on corporations and public sector organizations to stop employing players in the ICL.[18]
BCCI defined the relevant market as the “organization of private professional domestic cricket events in India.”[19] The BCCI was deemed to be dominating in the market due to its monopoly in the organizing of cricketing events, as well as its substantial role in the sport’s regulation, which allows it to set entrance hurdles for leagues and award extra rights. Furthermore, the fact that it has “considerable authority in the pyramid system of sports governance” and is conferred with specific privileges by the ICC.[20]
BCCI was found prima facie guilty of Section 4 because it “systematically barred the Informant from engaging in the relevant market” through non-recognition of ICL and exclusionary measures, according to the Commission. It also barred ICL and its affiliates from participating in the downstream market for media rights. The Commission has requested a DG inquiry. Based on the DG report, CCI has yet to make a final judgment on the matter. However, if discovered in violation of the Act, the organization may face severe fines. A penalty of INR 52.25 crore was levied on BCCI in a previous case for misuse of dominating authority.[21]
The case is an excellent illustration of how regulatory measures may have a significant influence on the fate of private enterprises. When it was initially established in 2007, the Indian Cricket League seemed like a promising idea, with backing from professional players, state governments[22], and a significant amount of cash from Zee Entertainment. However, it was eventually shut down owing to the BCCI’s lack of support and anti-competitive activities, as mentioned in the previous case. Indian players that participated in the ICL were even granted “amnesty” by the BCCI on the condition that they cut all links with the league.[23]
This goes on to show that sports organizations may utilize systematic and unfair targeting of an entity for the express goal of causing its extinction if they so want. On the other side, the BCCI’s unrestricted support for the IPL has helped it become one of the richest leagues in the world, with a brand value of $6.8 billion in 2019.[24]
All India Chess Federation Case
The Competition Commission of India was directed by the Delhi High Court in 2011 to investigate whether the All India Chess Federation (AICF) had engaged in anti-competitive behavior. The Court had received a petition requesting that AICF and the Ministry of Youth Affairs and Sports refrain from banning or threatening to ban chess players affiliated with the Chess Association of India (CAI), an AICF competitor. The All India Chess Federation of India had prohibited many players from competing in CAI events and had even requested that their ELO ratings be removed through the Fédération Internationale des Échecs (FIDE). According to the Commission, AICF is a “business” under S.2(h) of the Act since it “organizes professional chess events/tournaments as well as incidental revenue-generating activities.”[25] The Commission based its judgment on its previous rulings in matters such as Dhanraj Pillay and others v. Hockey India[26] and Surinder Singh Barmi v. Board for Control of Cricket in India. The relevant markets were characterized as “the market for organizing professional chess tournaments/ events in India”[27] and “the market for chess player services in India”[28], with AICF emerging as the market leader in both. The company was found to violate Section 4 of the Competition Act. The sanctions imposed on players including those stated in the AICF Code of Conduct, according to the Commission, were very harsh, including life bans and the denial of a hearing. Furthermore, the AICF’s regulations had no description of an “unauthorized tournament” or any basis for their approval. As a result, it was determined that the body’s limits on participation “in non-approved tournaments” had the purpose and effect of restricting the free movement of chess players and, as a result, excluding potential organizers from participating. As a result of these tactics, market access was denied”[29]
Conclusion
Competition law’s interaction with sports is part of a wider trend of law becoming more involved in the area. Contractual involvement of professional athletes, for example, raised labor law concerns, and the commercialization of different rights raised issues of intellectual property law, particularly trademark and copyright. In addition, the applicability of contract and tort law may be shown in several situations. As a result, as mentioned in previous chapters, there are more competition law issues involving sports than ever before, particularly as sports governing bodies increasingly engage in commercial operations. It is therefore critical to do a concentrated study on this interface to ensure that organized sports in various jurisdictions grow following fair market principles.
References:
[1] Chandralekha Bhogadi, The economics of IPL, The Times of India (Oct 15, 2021, 5:00 PM), https://timesofindia.indiatimes.com/readersblog/the-twisted-whisper/the-economics-of-ipl-26767/.
[2] Tejaswini and Uttakarsh Mattikop, Competition Law and Sports, Issue 2 volume 3, JURIMPERATOR, (Oct16, 2021, 4:00 PM), http://journal.jusimperator.org/wp-content/uploads/2019/03/TEJASWINI-UTTAKARSH-MATTIKOP.pdf.
[3] The Monopolies and Restrictive Trade Practices Act, 1969
[4] The Competition Act, 2002 [hereinafter Competition Act]
[5] Competition Act, s.3
[6] Competition Act, s.4
[7] Merry Bernard Ollukaran, Comparison of Competition Law Regimes of Other Countries to That of India, (Oct 16, 2021, 7:00 PM), https://lexauxilium.com/2020/12/14/comparison-of-competition-law-regimes-of-other-countries-to-that-of-india/.
[8] Prosenjit Datta, Market dominance and Antitrust laws in US and India, The New Indian Express, (Oct 17, 2021, 10:00 PM), https://www.newindianexpress.com/opinions/2020/sep/24/market-dominance-and-antitrust-laws-in-us-andindia-2201129.html.
[9] Competition policy, European Parliament, (Oct 17, 2021, 12:00 PM) https://www.europarl.europa.eu/factsheets/en/sheet/82/competition-policy.
[10] Millia Dasgupta, How different is European competition law from competition law in India, (Oct 17, 2021, 1:00 PM), https://blog.ipleaders.in/different-european-competition-law-competition-law-india/.
[11] Re Department of Sports, MYAS v. Athletics Federation of India, Reference Case No. 01 of 2015, 2016
[12] Ibid.
[13] Ibid.
[14] Welcome to Runindia, RUNINDIA (Oct 17, 2021, 2:00 PM), runindia.com.
[15] Procam Home, PROCAM (Oct 17,2021, 2:45 PM), procam.in.
[16] Welcome to India Running, INDIA RUNNING (Oct 17, 2021, 3:00 PM), indiarunning.com.
[17] India’s running Events Industry Report, TOWNSCRIPT (Oct 17, 2021, 5:00 PM), https://blog.townscript.com/india-running-events-industry-report/.
[18] Pan India Infra projects Private Limited v. Board of Control for Cricket in India (BCCI), Case No. 91 of 2013.
[19] ibid.
[20] ibid.
[21] Re Surinder Singh Barmi v. Board of Control of Cricket in India, Case No. 61/2010.
[22] State Minister allows ICL use of Eden Gardens, ESPN CRIC INFO (Oct 18, 2021, 9:00 AM), http://www.espncricinfo.com/icl/content/story/308020.html.
[23] BCCI offers amnesty for ICL players, ESPN CRIC INFO (Oct 18 2021, 10:00 AM), http://www.espncricinfo.com/icl2008/content/story/402028.html.
[24] IPL brand value rises 7% to $6.8 billion in 2019, THE HINDU BUSINESS LINE (12 October 2019, 5:09 PM), https://www.thehindubusinessline.com/news/sports/ipl-brand-value-rises-7-to-68-billion-in-2019/article29458678.ece.
[25] Hemant Sharma v. All India Chess Federation, Case No. 79 of 2011 [hereinafter Hemant Sharma v. AICF].
[26] Dhanraj Pillay and others v. Hockey India, Case No. 73 of 2011.
[27] Hemant Sharma v. AICF, supra note 25.
[28] ibid.
[29] ibid.
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