Competition Law In Sports

Competition Law In Sports

BACKGROUND

Sports is a multibillion-dollar industry in India and has witnessed phenomenal growth over the past decade. Besides cricket, several other sports, such as volleyball, hockey, and kabaddi, have been propelled due to enormous consumer demand for sporting entertainment. This has led to an increase in the roles of regulatory and governing bodies involved in various sports, such as the Board for Control of Cricket in India (BCCI), Amateur Baseball Federation of India (ABFI), All India Chess Federation (AICF), and others. These organizations play a regulatory and governing role for their respective sports and wield significant power. It has been noticed that organizations with such power try to monopolize the market and deny access to new entrants.

Denial of market access is contrary to the ethos of competition law. This is because when competition is not allowed to thrive, consumers have limited choices and are forced to accept whatever the dominant market players wish to offer. Players may also be prevented from participating in other tournaments which these sporting bodies refuse to recognize. Players must be protected from unfair conditions imposed by such entities which foreclose competition and protect their own commercial interest in organizing sporting events and competitions. Sports federations engaged in the organization of tournaments/leagues have an advantage if they also possess the authority to grant approval for similar events¹. These federations and entities can misuse their dual capacity role of being a regulator as well as an organiser, which can be anti-competitive as it may cause an appreciable effect on competition. The Competition Commission of India (CCI) has held certain actions as anti-competitive in several cases, such as:

❖ In Confederation of Professional Baseball Softball Clubs vs. Amateur Baseball Federation of India², the CCI held that prohibiting state associations from dealing with leagues not recognised by the federation and threatening disciplinary actions against players who participated in such leagues was anti-competitive.

❖ In Hemant Sharma vs. AICF³, the CCI held that coercing players to sign declarations stating they would not participate in any tournament / championship not authorised by the federation was anti-competitive. Such registration was necessary if the players wanted to be selected for National or International events. If any player participated in a tournament not authorised by AICF, he/she would be banned for a period of one year from participating in the National Chess Championships and other events. Furthermore, such player would also have to surrender fifty percent of the prize money to AICF from such unauthorised events and tender an unconditional apology along with an undertaking that he/she would not participate in any unauthorised tournament in the future. CCI termed such coercion and influence to be anti-competitive.

❖ In Surinder Singh Barmi vs. BCCI, the CCI held that BCCI knowingly foreclosed competition by openly declaring that it was not going to sanction any other event and placed a blanket restriction on the organization of professional domestic cricket leagues / events by non-members. There was no other competitor in the market, nor was anyone allowed to emerge due to BCCI’s strategy of monopolizing the entire market. The policy of BCCI to keep out other competitors and to use their position as a de facto regulatory body prevented many players who could have opted for another competitive league. Competitors and players were dependent on BCCI for sanctioning events. BCCI was held to have undermined its moral responsibility of a custodian and de facto regulator.

Sporting bodies have several responsibilities besides organising events, such as attracting sponsors, conducting doping tests, and holding player auctions. Given these roles, concerns regarding competition law are bound to arise. How the federations and the players present their case is of enormous importance. For instance, a federation may argue that the sport in question is not popular and thereby seek exemption from being held in contravention of the Competition Act⁴. The CCI is playing its role to prevent such entities from indiscriminately affecting the fate of various players and stakeholders.

FUTURE CONCERNS

New issues are bound to emerge, for instance, because teams in the Indian Premier League (IPL) have immense influence, power, and money, professional cricketers of other countries are being lured to join such sports franchises for the whole year. If this happens, countries will have to take permission from the franchises for the player to play for his/her country rather than vice versa. The primary reason for this is the advent of various cricketing leagues which are now being organised apart from the IPL, such as the SA20 League⁵.

In comparison to the United States of America and Europe, Competition Law in India is still in its infancy. Online streaming has become an economically viable option for the sale of broadcasting rights of sporting events and has already raised competition concerns in the United States of America and Europe. In India, the digital and television broadcasting rights for the IPL are being sold separately, allowing the league to be broadcast across multiple platforms such as JIO and Star Sports. As new revenue streams and markets develop, the work of competition authorities in this area is likely to become increasingly complex. The manner in which media rights are granted, reasons for banning certain players, criteria for recognition of unauthorised events, etc. are going to be huge issues. Also, it is only a matter of time before several facets of e-sports come under the purview of Competition Law in India. The need of the hour for both sporting entities and players is to be aware of their rights and responsibilities regarding the scope of Competition Law in India.