A PRIMER ON ‘SPORTS AND COMPETITION LAW

INTERFACE’ IN INDIA
Dr. Vijay Kumar Singh1

Mr. Sachin Tendulkar is awarded with the India’s highest civilian award, the
‘Bharat Ratna’. This sets the tone for this paper; now sports as a ‘profession’
may not be whisked away. Sports as a ‘profession’ in India have moved from
amateurism and calls for a serious consideration both in terms of its regulation
and legal requirements. The industry associations have demanded to grant it as a
status of ‘industry’ as it involves huge amount of investment and flow of money,
as has been observed by all of us in relation to IPL matches. This has given birth
to a new branch of law, i.e. the ‘sports law’ which is a development from ‘sports
and law’ in India. Though this development has long happened in other countries
in the world, specifically in European Union, in India the things are slowly
holding the ground. There are several legal issues that emerge in the context of
sports like match fixing, doping, conflict of sports governing bodies, contract of
employment of players etc., however, the focus of the present paper is on the
‘sports and competition law interface’. India now has completely new
competition legislation in place in the form of Competition Act, 2002 which
prohibits practices having adverse effect on competition in markets in India, and
the sports sector has not been spared from its application as a market. This can
be seen from the cases brought against BCCI, the regulator of ‘cricket’, before
the Competition Commission of India in which CCI had imposed a penalty of Rs.
52 Crores for abuse of dominant position. Two other cases relating to the sports
of ‘hockey’ and ‘chess’ have also come up before CCI. These developments bring
us to the debate as to what extent competition law can change the sports law
landscape and what role it can play in the development of sports in India. The
present paper would explore these issues as a primer.

Paper presented at the UGC Sponsored ‘National Conference on Sports Law’ organized by Dr. Ambedkar
College, Deekshabhoomi, Nagpur on 15th-16th, February, 2014.
1
Deputy Director (Law), Competition Commission of India. The views expressed are personal to the
author and does not in any way represent the view of the Commission. Author may be reached at
vrsingh.vk@gmail.com

Electronic copy available at: https://ssrn.com/abstract=2973042

 ‘Sport is part of every man and woman’s heritage and its absence can never be
compensated for.’
Pierre de Coubertin2

1. INTRODUCTION

At the beginning of any debate on ‘sports law’ or ‘sports and law’, the discussion begins
with the definition of the term ‘sports’. Though, there are several definitions proposed by
different authors3, the exact definition of ‘sports’ seems to be impossible; however, some
common elements of the existence of a recognizable organizational structure, rules,
physical exertion and competition needs to be present4. The term ‘sport’ derives from the
French-determined Middle English verb sporten, to divert, and also the Latin term
desporto, literally ‘to carry away’. The emphasis is therefore on it being a distraction,
something that gives pleasure5. The historical evolution of sports can be traced back to
the original Greek Olympics believed to have been held in 686 BC. In India, history of
sports can be traced back to the epic of Mahabharata which narrates an incidence where a
game called Chaturang was played between two groups of warring cousins Pandavas and
Kauravas. Instances of kings going for hunting is well know, even now hunting can be
seen as the precursor of much of modern sport.

Moving to contemporary times, sport has become a truly global phenomenon. Modern
sport is going through significant changes and it is no more merely a past-time or
recreational activity, rather it has adorned a professional and economic dimension. Huge
amount of money is now being involved and for some it is an ‘industry’. With the
growing role of sports in the culture of population and public life, states take significant
interest in these matters in terms of regulating the same. The state intervention may be
direct or indirect.

1.1 Interventionist vs. Non-Interventionist Model of Regulation of the Sports Sector

– In the interventionist approach, sport is considered a public function and the state has a
right and the responsibility to deliver, achieved by implementing ‘specific legislation on
the structure and mandate of a significant part of the nation’s sports movement6. In
countries adopting such an approach (for example many southern and eastern European
states), sporting activity is deemed public good and therefore a social service
responsibility of the state, with sports organizations created and existing by virtue of

2
(1863-1937), French pedagogue and historian, founder of the modern Olympic Games.
3
For e.g. Coakley, J. Sport in Society: Issues and Controversies (1994) “Sports are institutionalized
competitive activities that involve vigorous physical exertion or the use of relatively complex physical
skills by individuals whose participation is motivated by a combination of intrinsic and extrinsic factors.
Singer, R. Physical Education: Foundations (1976), New York: Holt, Rinehart and Winston “…a human
activity that involves specific administrative organisation and historical background of rules which define
the objective and limit the pattern of human behavior; it involves competition and/or challenge and a
definite outcome primarily determined by physical skill.”
4
Gardiner, Simon, et. al., Sports Law, 4th Ed, Routledge (2012), at p. 5.
5
Id. at p.13
6
Lewis, Adam and Jonathan Taylor, Sport: Law and Practice, 2nd Edition, Tottel Publishing 2008, at p.5.

Electronic copy available at: https://ssrn.com/abstract=2973042

government license and funding specifically in order to fulfill that responsibility as agents
of the state7. The state has a central role in sport in such countries.

On the other hand, there are countries like UK and many other northern and western
European states which have taken less interventionist approach to the sport. The
provisions of sport have not been regarded as a public service responsibility of the
government. Thus, no general ‘law of sport’ has been enacted to regulate activity in this
sector. Rather, legislation or other intervention is generally countenanced only as a
measure of last resort, in response to a pressing public interest requirement.

1.2 Sports Regulation in India: In India, the sports sector has been neglected so far
and the State’s attitude has been that of a non-interventionist. Under the Constitution of
India, ‘sports’ is in the State List along with entertainment and amusement. Thus, the
responsibility for the development of sports primarily lies with each state government.
The role of Central Government is limited to planning and providing infrastructure. The
Ministry of Youth Affairs and Sports is the apex body which designs sports policies 8.
The sports sector in India actually saw a push with the 1982 Asian Games in New Delhi9
with subsequent sports policies in 2001 and 2007. The regulation of sports in India is
through autonomous institutions like Indian Olympic Association (IOA) and sports
federations like Board of Control for Cricket in India (BCCI) starting from the grass roots
(district level) to the national level. There are about 64 such federations in India covering
all major sports excluding cricket10. As regards the intervention of public law in sports
issues, Hon’ble Supreme Court in the case of Zee Telefilms11 held that BCCI is not a
State and thus not subject to public law. With an objective of bringing out reform in the
management and governance of sports and in order to make it more responsive,
responsible and result oriented, National Sports Development Bill 2013 was introduced,
however, the same could not converted into law12. Another legislation which has been

7
Id. For example in France, the Loi du Sport provides that ‘the development of physical activities, sports
and high level sports is incumbent upon the State. France’s Ministry of Sport is responsible for the
promotion of sport to all age groups, and for the management and supervision of government grants to
sports. The Ministry recognizes one national governing body for each sport, and confers on that body the
exclusive right to organize events and license participants in its sports in France.
8
See Singh, Vijay Kumar, ‘Issues in Emerging Area of Sports Law: Lex Sportiva’, Indian Law Review,
Vol 1 No. 1, pp. 114-147 (discusses the sports law in India).
9
In 1954, the Indian government took the first step to promote sports by creating the AICS (All India
Council of Sports). In the same year, the Department of Sports was created under the Ministry of Youth
Affairs and Sports. In 1984, the National Sports Policy was announced to develop a conducive policy
framework for sports in the country.
10
For the complete list of federations, see www.olympic.ind.in
11
Zee Telefilms Ltd. and Anr. v. Union of India (UOI) and Ors., AIR 2005 SC 2677: (2005) 4 SCC 649:
MANU/SC/0074/2005 (Coram: N. Santosh Hegde (majority view), B.P. Singh, H.K. Sema, S.B. Sinha
(minority view) and S.N. Variava, JJ.) - Majority view was that Board was not ‘State’ because Board was
not created by a statute, no part of share capital of Board was held by government, no financial assistance
was given by government to Board, and there was absence of any deep and pervasive state control over
Board. Merely because Board enjoyed a monopoly Status in field of cricket and it exercised some public
duty would not make it ‘State’ for the purposes of Article 12
12
The Bill has been prepared on the recommendations of the Justice Mukul Mudgal Working Group
constituted by the Ministry of Youth Affairs and Sports (MYAS). The Bill provides for a streamlined

2
contemplated is ‘The Prevention of Sporting Fraud Bill, 2013’ which proposes to deal
with the ‘match fixing’ issues. With these developments in India, there seems to be some
important changes to occur in the near future in the area of sports law.

2. SPORTS AND COMPETITION LAW INTERFACE

Sports have been seen to have a competition law interface due to its ‘economic activity’
aspect. Sports and competition law interface has seen most of its development in the
European Union (EU) and is considered the vanguard of legal and regulatory interaction
with sport13. The interaction of the sports and competition in EU has taken further
dimensions with specific emphasis by EU, especially in terms of the White Paper on
Sports14. The beginning of this interface has been the differentiation between the pure
‘sporting rules15’ and the rules which affect the sports from an ‘economic angle’.

2.1 ‘Specificity of Sport’: Sport has certain specific characteristics, which is often
referred to as the ‘specificity of sport’. This has been recognized in European Union as
well as in other jurisdictions16. In European Union, there is no general exclusion for
sport from the application of the competition rules. However, matters which are of a
‘purely sporting interest and, as such, have nothing to do with economic activity’ fall
outside the scope of the law. This is because (as in any other case) the law applies only
to the extent that the agreement/concerted practice/conduct in question constitute an
economic activity17.

Walrave & Koch18 was the first sports related cases to be brought before the European
Court of Justice (ECJ) in which the Court confirmed that EU law did not apply to rules
that were of pure ‘sporting interest’ on the basis that such rules had nothing to do with the
economic activities to which the EC Treaty relates19. However, in a recent landmark
judgment, Meca-Medina and Majcen v. Commission20, the concept of ‘specificity of

regulatory structure of sports by way of National Sports Federation, National Olympic Committee and
Ethics Commission.
13
Gardiner, see supra note 4 at p. 146.
14
It is a culmination of a long process which has seen the Commission evolving from a reactive position to
events in this area to a more proactive approach: the Amsterdam Declaration of 1997, the Nice Declaration
of 2000, and then the agreement of the Intergovernmental Conference in 2004 to include sport in the
Treaty. See Blanpain, Roger (ed.), the Future of Sports Law in the European Union: Beyond the EU
Reform Treaty and the White Paper, Kluwer Law International (2008)
15
All sports have rules: footballers, with the exception of goalkeepers, cannot handle the ball; boxers must
not hit ‘below the belt’; javelin throwers should not throw the javelin at other javelin throwers. These are
‘the rules of the games’, and self-evidently do not infringe the Competition Laws. Richard Whish,
Competition Law, Oxford, 7th Ed.
16
Like UK, Australia and US.
17
Faull and Nikpay, The EC Law of Competition, Oxford 2nd Ed. 2007, at p. 186
18
Walrave and LJN Koch v. Association Union Cycliste Internationale, ECJ Case No. C-36/74 [1974] ECR
1405
19
Infantino, Gianni, Meca-Medina: a step backwards for the European Sports Model and the Specificity of
Sport?, available at
http://www.uefa.org/MultimediaFiles/Download/uefa/KeyTopics/480401_DOWNLOAD.pdf
20
Case C-519/04 Meca-Median & Majcen v. Commission, Judgment of 18 July 2006 (the case concerned
two professional swimmers, Mr. Meca-Medina and Mr. Majcen. During the World Cup in that sport they

3
sport’ has been narrowed. In this case, ECJ clarified that “as regards the compatibility of
the rules at issue with the rules on competition, the penal nature of the rule at issue and
the magnitude of the penalties applicable if they are breached are capable of producing
adverse effects on competition”21.

2.2 European and North American Model – While analyzing the ‘sports and
competition law interface’ one can easily come across the two distinct kinds of models of
sports, i.e. European and North American model22. Broadly speaking, sports in Europe
are organized on a ‘pyramid’ structure, with individuals joining teams or clubs that are
members of local or regional governing bodies who in turn are members of national
governing bodies, presided over by one international governing body with ultimate
regulatory authority over the sport23. Thus, the European model reflects an open system.
In contrast, the structure of sports organisation in North America involves a closed system
of competition which is based not on promotion and relegation of teams, but rather on a
combination of owner preferences, usually for commercial reasons, and approval of joint
ventures of established teams.

2.3 Competition Issues in Sports Sector: The following five basic competition
questions were identified during a Roundtable on sports organized by OECD24 in which
various countries participated:

(i) the nature of sports federations (should they be considered as normal

commercial enterprises subject to competition law or as private non-profit
making bodies which merely regulate the sports?)
(ii) the relationship between sports federations or leagues and the constituent
clubs (should the federations or leagues be viewed as cartels of clubs or as
bodies independent of the clubs?)
(iii) the nature of the product or service provided by the professional sports
(should the matches be viewed as separate events or is there a positive
externality in that a championship is more than a set of matches?)
(iv) the nature of the relevant market (are different sports substitutable for one
another or within the same sport are different competitions substitutable,
particularly from the broadcasting perspective?)

tested positive for Nandrolone (an anabolic substance). The International Swimming Federation (FINA)
suspended them under the Olympic Movement’s Anti-Doping Code for four years, a term which was
subsequently reduced by the Court of Arbitration of Sport. While the EC and CFI did not deal with the
issue taking it as a concern having ‘sporting interest’, the Court of Justice ruled otherwise setting aside the
judgment of Court of First Instance. It said, in order to escape the prohibition on distortion of competition
laid down by the Treaty, the restrictions imposed by those rules must be limited to what is necessary to
ensure the proper conduct of competitive sport.)
21
Id. This approach of ECJ has been criticized by a number of authors.
22
Nafziger, James A.R., A Comparison of the European and North American Models of Sports
Organization, S. Gardiner, R. Parrish and RCR Siekmann, EU Sports, Law and Policy, (2009) at p. 35
23
Lewis, supra note 6 at p. 410
24
OECD, Competition Issues Related to Sports, OCDE/GD(97)128 (1997), available at
http://www.oecd.org/regreform/sectors/1920279.pdf

4
 (v) the relationship between players and clubs (should the contracts be
viewed as contracts of employment excluded from competition laws or
should they fall within the purview of such laws?)

An analysis of the aforesaid issues and a review of various decisions by different

competition agencies in the sports sector highlight the following areas of ‘sports and
competition law interface’.

2.3.1 Restriction on Player Transfer: This is also termed as restraint in labour

market25. The North American Model has recognized restraints on teams and players as
important, especially contractual restraints, the draft system of player recruitment, salary
caps, luxury and payroll taxes and revenue sharing26. The structure of professional sports
leagues in the United States is defined primarily through a combination of labour law and
anti-trust law. There are cases brought under the Sherman Act stemming from collusion
between owners of separate teams. The question of single entity being raised as a
defense in these cases which has been an important area of jurisprudential development
on the ‘single entity’ doctrine27.

Similar to the American Model, in Australia the common law doctrine of restraint of
trade28 has been invoked, in addition to the provisions of the Trade Practices Act 1974, in
numerous cases where players have been dissatisfied with the drafting and transfer rules
of their particular sport29.

In EU, the restriction on player’s movement was dealt by ECJ in the famous case of
Bosman30 where ECJ found that the transfer rules infringed the rules relating to the free

25
Ross, Stephen F., Anti-Competitive Aspects of Sports, (1999) 7 Competition & Consumer Law Journal,
available at
http://law.psu.edu/_file/Sports%20Law%20Policy%20and%20Research%20Institute/Australia99.pdf
26
Ross, Stephen F., Player Restraints and Competition Law throughout the World’, 15 Marq. Sports L.
Rev. (2004) p.49.
27
Starting from the decision of Copperweld v. Independence Tube Corp. 104 S. ct. 2731 (1984) to the latest
one being the American Needle Case - American Needle, Inc. v. National Football League (2010), 130 S.
Ct. 2206
28
The doctrine holds that restraints of trade are void unless they are reasonable in reference to the interests
of the parties concerned and reasonable in reference to the interests of the public: Nordenfelt v. Maxim
Nordenfelt Guns & Ammunition Co. Ltd. [1894] AC 535 per Lord Macnaghten.
29
For e.g. Buckley v. Tutty (1971) 125 CLR 353 (this case involved a transfer system under which New
South Wales Rugby League players were effectively tied to their clubs (even if the players were not
contracted to play with the club or their contracts had expired) and could not play for any other without the
consent of their club. This was declared invalid by the High Court of Australia.)
30
Case C-415/93 Union Royale Belges des Societes de Football ASBL v. Bosman [1995] ECR I-4192 (in
this case Jean-Marc Bosman was a Belgian professional footballer with Belgian Club RC Liege and the
issue was regarding issuance of NOC by his parent club to be transferred to another club which was denied
and he challenged this. Court in this case reaffirmed the position established in Dona, that the activity of
professional or semi-professional football constitutes an economic activity for the purposes of the Treaty
irrespective of profitability. Secondly, it dismissed the arguments relating to the business-to-business
nature of the transfer rules, noting that the payment of a fee on a player moving from one club to another
affected the opportunity for players to find employment and impacted upon its terms. The court
acknowledged the complex entwinement of the sporting and economic aspects of football and noted the

5
movement of workers. Bosman has been followed through a number of cases like
Dona31, Lehtonen32, and Deliege33.

2.3.2 Broadcasting/Sports Media Rights: It is probably in the area of television

broadcasting that the competition authorities have most frequently been involved in the
‘business’ of sport34. The explosion in the number of actors on the demand-side of the
market in recent years together with the scarcity and exclusivity of truly attractive events
have made sports media rights sufficiently attractive to transform the whole structure of
professional sport as a commercial enterprise35. The purchase of sports media rights
represents a major cost for content delivery operators imply that there are significant
barriers to entry. Consequently, access to sports media rights is a major bottleneck
affecting the content delivery industry and ultimately the consumer. One of the key
issues in broadcasting cases would be the definition of ‘relevant market’.

In a relevant market definition, starting point is the test of substitutability (i.e. the extent
to which consumers are able and willing to switch to a substitute product). Measuring
demand substitutability in the broadcasting sector, however, has proven to be a difficult
task. This is further complicated by technological convergence and the growing ability to
deliver TV-quality services over the internet. Sports media rights can now be consumed
via different distribution modes, so it becomes increasingly difficult to clearly distinguish
separate markets36.

As regards ‘product market’ definition, a general distinction is usually made between two
market levels; the upstream markets (where media operators purchase rights for content
from the right-owners, increasingly sport rights agencies) and the downstream markets
(where media operators compete for audiences and advertising revenues). In the case of
Eurovision37 the EC considered that there could be separate markets for the acquisition of
television rights for certain major sport events, such as the Olympic Games. There are
issues regarding ‘joint selling and long-term exclusivity (upstream market)’38, like a

potential for economic restrictions to be justified by sporting necessity. However, this could not be relied
upon to provide a blanket exemption for the whole of the sport.)
31
Case 13/76, Dona v. Mantero [1976] ECR 1333
32
Case C-176/96, Lehtonen [2000] ECR I-2681
33
Case C-51/96 and C-191/97, Deliege [2000] ECR I - 2549
34
Lewis, see supra note 6.
35
See Weatherill, S., ‘The sale of right to broadcast sporting events under EC law’, 3-4 The International
Sorts Law Journal (2006) p. 3 cited in Rompuy, Ben van and Caroline Pauwels, The Recognition of the
Specificity of Sport in the European Commission’s Article 81 EC Case Law Related to Sports Media Rights,
S. Gardiner, R. Parrish and RCR Siekmann, EU Sports, Law and Policy, (2009) at p. 281
36
Id.
37
Case IV/32.150 – Eurovision (2000)
38
In the context of sport, the practice of joint selling refers to arrangements by which sport clubs entrust the
selling of their media rights to their national or international sports association, who then sells the rights on
their behalf. It is recognized by the Commission that joint selling may have pro-competitive effects that
lead to efficiency gains in the marketing of rights. It has in particular identified three types of benefits.
 The creation of a single point of sale (which providers efficiencies by reducing transaction costs
for sport clubs and media operators).
 Branding of the output efficiencies (which help the media products getting a wider recognition and
hence distribution).

6
horizontal agreements as they may prevent the sport clubs from individually competing in
the sale of media rights39. Joint buying (downstream market) may be done by preventing
parties excluded from the agreement from acquiring the rights, such agreements may
indeed lead to market foreclosure effects or output restrictions.

2.4 Economics of Sports: Sports constitutes a mass movement: not less than 271
million Europeans engage in one form or another in sport activities. There are in the
European Union more than 800,000 clubs with more than 70 million members. European
football comprises of 23 million registered male and female players – many millions
more playing informally – and 3500,000 referees40. Thus it accounts for a major
economic sector with 3.5% of EU GDP and provides employment for as much as 5% of
the labour force.

In Hockey India Case41, CCI recognized that the commercial dimension of sports is
enormous and according to a recent A.T. Kearney Study of Sports Teams, Leagues and
Federations, today's global sports industry is worth between $350 billion and $450
billion ($480-$620 billion). This includes infrastructure construction, sporting goods,
licensed products and live sports events. Of late the industry associations like FICCI has
been representing that the ‘sports’ be recognized as an ‘industry’ as it involves a strong
potential in terms of advertising revenues, sports merchandising (retail), and marketing42.

3. COMPETITION LAW IN INDIA

In India, the Competition Act, 2002 replaced the erstwhile Monopolies and Restrictive
Trade Practices Act, 1969 (MRTP) on the recommendations of the SVS Raghavan
Committee43. Competition Act led to the formation of Competition Commission of India
(CCI) to prevent practices having adverse effect on competition, to promote and sustain
competition in markets, to protect the interests of consumers and to ensure freedom of
trade carried on by other participants in markets in India44.

 The creation of a league product, which is focused on the competition as a whole rather than the
individual football clubs participating in the competition.
39
This causes a reduction in competition that leads to uniform prices compared to a situation with
individual selling and thus constitutes price-fixing. Further restrictions could result from market
foreclosure; if all media rights are sold on an exclusive basis to one single purchaser, other retailers in the
downstream market (and neighboring markets) are foreclosed from accessing these rights.
40
JL Arnaut, Independent European Sport Review, 2006 cited in Blanpain, supra note 14 at p. 1.
41
See infra note 52.
42
FICCI Sports Committee Report on Draft National Sports Bill 2011 available at
http://www.ficci.com/Sedocument/20178/Draft-National-Sports-Development-Bill-2011.pdf. Also see,
Arpita Mukherjee, et.al., Sports Retailing in India: Opportunities, Constraints, and Way Forward, Working
Paper No. 250 ICRIER, June 2010, available at http://www.icrier.org/pdf/working_paper_250.pdf
43
Report of High Level Committee on Competition Policy and Law (2000), available at
http://www.globalcompetitionforum.org/regions/asia/India/Report_of_High_Level_Committee_on_Compe
tition_Policy_Law_SVS_Raghavan_Committee29102007.pdf
44
See Singh, Vijay Kumar, Competition Law and Policy in India: The Journey in a Decade, 4 NUJS L.
Rev. 523 (2011), available at http://www.nujslawreview.org/pdf/articles/2011_4/vijay-kumar-singh.pdf
(discussed evolution of competition law in India.)

7
Competition Act in India, keeping in line with the international precedents provides for
the following four aspects:

3.1 Anti-Competitive Agreements – Section 3 of the Act prohibits anticompetitive

agreements, both horizontal45 and vertical agreements46.

3.2 Abuse of Dominant Position – Section 4 of the Act prohibits an abuse of

dominant position. A dominant position is said to be acquired when an enterprise is able
to operate independent of competitive forces47 and affect its competitors or consumers in
its favour. Abuse may be in relation to prices which includes predatory pricing, limiting
and restricting production and supply or technical development of goods or services,
practices leading to denial of market access, making conclusion of contracts subject to
supplementary obligations (quantity forcing etc.) and uses it dominant position in one
market to enter into another market (leveraging).

3.3 Regulation of Combination – While the aforesaid two competition law

interventions involve an ex-post competition law analysis, regulation of combination
involves an ex-ante analysis of the proposed merger as to whether it is likely to cause an
appreciable adverse effect on competition or not. Section 5 and 6 deals with the same.

The procedure of filing information and inquiry/investigation is laid down in sections 19

and 26 of the Act. Commission may receive information from any person or through a
reference from statutory authority or suo motu launch an investigation against the alleged
violation of the provisions of the Competition Act. First, the Commission forms a prima
facie view on the information and if it finds that the information calls for a detailed
investigation, the matter is referred to the Director General (DG) for further detailed
investigation. DG investigates the case independent of the Commission. Once the
investigation is complete, DG submits its report to the Commission, when the inquiry
continues and the parties are called to comment/object upon the DG report. After hearing
the parties on DG report, the Commission comes to a conclusion in the case as regards
violation. Commission/DG has got powers of a Civil Court while conducting the
inquiry/investigation48. Commission may pass an order to the extent of 10% of the
average turnover for the last preceding three financial years or in case of cartels three
times of its profit for each year of the continuance of such agreement 49. In cases of abuse
of dominant position, the Commission may order even division of enterprises.

It is important to note that the Commission does not address the consumer complaints
directly; rather it protects the consumer interests through the protection of competition in

45
Section 3(3) of the Act provides for types of agreements like price fixing, limiting or controlling
production, supply or technical development, sharing of market, indulging in bid rigging as presumed to
have an AAEC including Cartels.
46
Section 3(4) of the Act provides for types of agreements in which AAEC is required to be proved like tie-
in arrangement, exclusive supply agreement, exclusive distribution agreement, exclusive supply agreement,
refusal to deal and resale price maintenance.
47
Explanation to Section 4 of the Act.
48
Section 36 of the Act.
49
Section 27 of the Act.

8
markets which ultimately increases consumer welfare by reduced prices, choice of more
products, and innovation.

3.4 Advocacy/Advisory Functions – One of the significant functions of the

Commission is to promote ‘competition culture’ and also to advise government on issues
relating to competition law and policy whenever requested under Section 49 of the Act.

4. COMPETITION LAW INTERVENTIONS BY CCI IN SPORTS CASES

CCI is the competition law regulator and may look into competition issues in all kinds of
sector either suo motu or on the cases brought before it. In the sports sector, so far the
Commission has received the following three cases relating to the areas of Cricket,
Hockey and Chess.
4.1 BCCI Case50: This case was brought before the Commission by the informant
alleging anticompetitive agreements between BCCI, IPL and the IPL teams causing
appreciable adverse effect on competition in India. It was also alleged that there was
abuse of dominance by BCCI-IPL in the organization of T-20 matches. Commission
formed a prima facie view in the matter for further investigation by DG and upon
submission of the DG report and hearing the parties found that BCCI has abused its
dominant position in contravention of Section 4(2)(c) of the Act (practices resulting in
denial of market access) and passed the following order:

i) to cease and desist from any practice in future denying market access to
potential competitors, including inclusion of similar clauses in any
agreement in future.
ii) to cease and desist from using its regulatory powers in any way in the
process of considering and deciding on any matters relating to its
commercial activities. To ensure this, BCCI will set up an effective
internal control system to its own satisfaction, in good faith and after due
diligence.
iii) to delete the violative clause 9.1(c)(i) in the Media Rights Agreement
(long term media rights agreement).
iv) the Commission considers that the abuse by BCCI was of a grave nature
and the quantum of penalty that needs to be levied should be
commensurate with the gravity of the violation. The Commission has to
keep in mind the nature of barriers created and whether such barriers can
be surmounted by the competitors and the type of hindrances by the
dominant enterprise against entry of competitors into the market. The
Commission has also to keep in mind the economic power of enterprise,
which is normally leveraged to create such barriers and the impact of these
barriers on the consumers and on the other persons affected by such
barriers. Accordingly, a penalty of 6% of the average annual revenue of

50
Case 61 of 2010 in the matter of Surinder Singh Barmi against Board for Control of Cricket in India
(BCCI) decided on 08.02.2013. 2013: CompLR297(CCI).

9
 BCCI for past three years was imposed under Section 27(b) of the Act
which amounted to Rs. 52.24 Crores.

Commission in this case noted that “BCCI’s economic power is enormous as a

regulator that enables it to pick winners. BCCI has gained tremendously from IPL
format of the cricket in financial terms. Virtually, there is 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 has prevented many players who could have
opted for the competitive league. The dependence of competitors on BCCI for
sanctioning of the events and dependence of players and consumers for the same
reason has been total. BCCI knowing this had foreclosed the competition by openly
declaring that it was not going to sanction any other event. BCCI undermined the
moral responsibility of a custodian and de-facto regulator.

Presently, this case is under appeal before Competition Appellate Tribunal. There has
been one more case brought before CCI against BCCI, however, the Commission closed
the case holding that there is no requirement of investigation in this matter as it has
already been done and the matter is pending before the Tribunal51.

4.2 Hockey India Case52: This case was brought before CCI by the renowned
hockey players (olympicians like Dhanraj Pillay) for alleged anticompetitive practices
and abuse of dominant position carried out by Hockey India (HI). HI is the national body
in India recognized by International Hockey Federation (FIH) and is the only body
responsible for conducting and governing national/international hockey events in India.
The informants entered into a player’s contract with World Series Hockey (WSH) and
Nimbus Communications for the hockey league in India (like IPL for cricket). HI had
issued statements prohibiting the players from participating in WSH on the ground of
WSH being an “un-sanctioned event”. It was alleged that HI’s conduct was in pursuance
of introduction of its own league in 2013 in collaboration with FIH.

Commission while analyzing the DG report, which had found violations of

Competition Act against HI, did not find any violation by HI. However, held that the
nature of the present system itself, with the possible conflict of interest between the
'regulatory' and 'organising of events' roles of Hockey India has raised certain potential
competition concerns53. The manner in which rules relating to sanctioned and
unsanctioned events and restrictive conditions included in CoC agreement are applied
becomes critical in this context.

The Commission observed that the lack of parameters that define and demarcate the
scope afforded by the term 'organization of events' can lend itself to several

51
Case 91 of 2013 – Pan India Infra Projects Private Limited against BCCI decided on 16.1.2014.
52
Case No. 73 of 2011 – Sh. Dhanraj Pillay and Others against M/s Hokey India 2013 decided on
31.05.2013: CompLR543 (CCI).
53
Id. Order

10
interpretations. A regulator must necessarily follow the dictum that 'Caesar's wife
must be above suspicion.' In this case the DG report points out circumstantial
evidence which, though not establishing violation of the Competition Act, further
persuades the Commission about the inherent potential of violation, and the need for
clear articulation and separation of the two roles of HI. As pointed out in the Order on
BCCI,
“The Commission strongly holds the view that competition is essentially for
benefits to be widespread. The game of cricket and the monetary benefits of
playing professional league matches must be spread out and not concentrated
in a few hands, in a few franchisees. In a country of large young population
more private professional leagues opens up more venues for youngsters to play
cricket, to earn a livelihood and to find champions where least expected. BCCI
in its dual role of custodian of cricket and organizer of events has on account
of role overlap restricted competition and the benefits of competition. The
objective of BCCI to promote and develop the game of cricket has been
compromised.”

CCI held that HI's economic power is enormous as a regulator. Virtually, there is no
other competitor of HI. The dependence of competitors on HI for sanctioning of the
events, as also dependence of players, has been total, considering the terms of Bye
laws of FIH and CoC Agreement. The Commission concluded that though these
regulations are inherent and proportionate to the objectives of sports federation, the
manner of application is always a concern given the duality of roles leaving scope for
possible violations of the Competition Act.

Accordingly, though the Commission did not find any violation of the Competition
Act, Commission directed HI under section 18 of the Act54
“that it would be appropriate if HI were to put in place an effective internal
control system to its own satisfaction, in good faith and after due diligence, to
ensure that its regulatory powers are not used in any way in the process of
considering and deciding on any matters relating to its commercial activities;
and also set up a streamlined fair and transparent system of issuing NOCs to
the players for participating in events organized by foreign teams/clubs.”

4.3 Chess Federation Case55 This matter came up as a reference56 arising from a
writ petition at Delhi High Court57. The issue in the case was that AICF prohibited chess
players who were registered with it from playing in any tournament or participating in
any competition of chess, if such a tournament/competition is organized by an
association/federation or other body which does not have the approval of AICF. Justice
Vipin Sanghi, held that the matter does not end here and it appears that AICF exercises its

54
Responsibility enjoined on the Commission by the Preamble and Section 18 of the Act, inter alia
requiring, 'to promote and sustain competition and protect the interests of consumers'.
55
Case No. 76 of 2011 – Hemant Sharma and Ors. against All India Chess Federation (AICF)
56
Ref. 6 of 2011. Later a case was also filed under Section 19 of the Act being Case No. 79/2011.
57
In the matter of W.P. 5770/2011 between Mr. Hemant Sharma and others against UOI and All India
Chess Federation) decided by Justice Vipin Sanghi on 4.11.2011 and LPA No. 972 of 2011

11
monopolistic and dominant position to stifle the growth of any other association of chess
players, by threatening the chess players registered with it, with disciplinary
action/expulsion. The policy and conduct of AICF may, therefore, call for examination
by the Competition Commission constituted under the Competition Act, 2002. The issue
is with regard to the right of the players of chess to form another association and to
organize tournaments in the country without the involvement of or the blessings of AICF.

Accordingly, the matter was taken up by CCI and investigation was ordered. DG
investigated the matter and submitted its report to the Commission; however, in the
meanwhile a stay in the matter has been given by Hon’ble Madras High Court on the
issue of jurisdiction of CCI58.

5. COMPETITION ISSUES IN SPORTS SECTOR IN INDIA

CCI took note of increasing cases against sports federations in India and the apparent
conflict between the non-profit objectives (specificity of sports) to growing economic
involvement59. One of the prominent issues before the commission was regarding the
model of sports being followed in India. It may be noted that India seems to follow an
EU model of pyramid structure.

5.1 Pyramid Structure: Pyramid structure means a single national sport association
per sport and Member State, which operates under the umbrella of a single
continental/national Federation and a single worldwide Federation, which is at the top of
the pyramid. For Olympic sports, the worldwide Federation is affiliated to International
Olympic Committee (IOC), which forms the top of pyramid60. The Commission
examined a number of articles/papers on the aspect of significance of the pyramid
structure for successful development of the sport, such as White Paper on Sport issued by
EC and international jurisprudence61. The Commission took note of most important
merits of the pyramid structure which are:
i) Pyramid structure helps to ensure that the special requirements of sports,
such as uniform rules and a uniform timetable for competitions, are taken
into account62.

58
WP No.34039/2012 in the matter of All India Chess Federation v. Hemant Sharma and Ors.
59
Hockey Case, supra note 52 at para 9.2 – Sports Federations across the world have opted for a non-profit
institutional form, to highlight that revenue forms a secondary consideration and generation of important
values such as team spirit, solidarity, tolerance and fair play are primary objectives of the sport. But with
surge in revenues, there is every likelihood that preferences and priorities in practice may be different from
the original or stated objectives. And it is this possibility of anti-competitive conduct, which has seen
substantial increase in case filings with competition agencies across the world against the conduct of sports
bodies.
60
Id. para 9.4.1 - In the context of this case, the hierarchy is IOC at top, followed by FIH, followed by
Continental Federations such as Asian Hockey Federation (AHF), followed by National Association that is
Hockey India
61
.Id. para 9.4.2
62
Opinion of Advocate-General in MOTOE case

12
 ii) Pyramid structure is essential for organization of national championships
and the selection of national athletes and national teams for international
competitions.
iii) Enforcement of rules that ensure proper organization and prioritisation of
international competition as the international competition is recognized to
be an essential and valuable feature of sport63.
iv) Enforcement of rules that protect integrity of the sport and maintain public
confidence.

In BCCI Case, the Commission held64

The pyramid structure is considered important for ensuring the freedom of internal
organization of sports associations, and indispensable to the performance of essential
regulatory task of sports associations which includes, setting the rules of the game,
uniformity in application of rules of the sport, maintaining the integrity of the game,
orderly promotion of the game and maintaining the fairness of the game (anti-doping
regulations) etc. In this structure, three kinds of sports rules can be identified: the "rules
of the game"; "club rules" and "competition rules".
 The "rules of the game" are the technical rules according to which a game is
played.
 The "club rules or statutes" are those adopted by each sports organisation to
regulate its own functioning.
 The "competition rules" are all the rules that govern competitive events organised
for a given sport over a given period.

5.2 Specificity of Sport: Commission discussed this issue in Hockey Case and
considered the manner in which competition laws are applied to the sports federations,
given the fact that sports involve specificities emanating from pyramid structure of
governance, which make them different from other commercial activities. As noted, there
are strong efficiency arguments in favour of a pyramid structure as also there are
tendencies and scope for potential anti-competitive practices.

The Commission acknowledges the autonomy of sporting organizations and

representative structures (such as leagues). Furthermore, it recognizes that governance is
mainly the responsibility of sports governing bodies and, to some extent, the Member
States and social partners. Nonetheless, dialogue with sports organizations has brought a
number of areas to the Commission's attention, which is addressed below. The
Commission considers that most challenges can be addressed through self-regulation
respectful of good governance principles, provided that EU law is respected, and is ready
to play a facilitating role or take action if necessary.
In context of this case, while the Commission appreciates the relevance and
requirement of pyramid structure with the consequence of one National Association
per sport, per Member State, it is the duty of the Commission that their functioning and
activities must not violate the objectives of the Act. The Commission affirms the right

63
Case 36/74 Walrave and Koch [1974] ECR 1405)
64
BCCI Case, supra note 50 at para 8.2

13
of self-regulation of sports bodies with regard to issues, which are purely sporting,
such as selection of teams, formulation of rules of the sport etc. or, even the issues
which have economic aspects such as grant of various rights related to sports events or
organization of leagues etc. However, given the inherent overlap of regulation and
economic gains, outright grant of immunity to the rules and method of application of
the rules by the federations is not possible65.

The inherence-proportionality test which is currently considered as the appropriate

approach to address the competition issues in sports sector provides that if the alleged
restrictive conditions is inherent to the objectives of the sports federation and the effect
of restrictive condition on economic competition among stakeholders or on free
movement of players is proportionate to legitimate sporting interest perused, the same
may not be viewed as anti-competitive. This test may be applied to all rules, without
needing to classify them as purely sporting or otherwise. In the early stages of
application of competition law to sports, there was a notion that "purely sporting rules"
must be exempted from Competition laws, but now all rules whether on the
organizational/structural/regulatory role may be judged on case to case basis
considering their inherence and proportionality66.

5.3 Jurisdiction of Commission to deal with cases relating to Sports Federation:

The Commission noted that the Act focuses on the functional aspects of an entity rather
than institutional aspects. The scope of the definition on the institutional front has been
kept broad enough to include virtually all the entities as it includes 'person' as well as
departments of the government. The specific exception has been provided only to the
activities related to the sovereign functions of the government. It is in substance the
nature of activity that would decide whether the entity is an enterprise for the purpose of
the Act or not. The aspect of 'organization' brings in activities contributing to the
revenues of sports federations such as grant of media rights, sale of tickets etc. The
activities of 'organizing events' are definitely economic activities as there is a revenue
dimension to the organizational activities of sports federations.

5.3.1 Sports Association is an ‘Enterprise’: On the basis of principles emerging from

international jurisprudence, the provisions of the Act and a holistic consideration of all
relevant factors, the Commission opines that the National Sports Federations do not have
any immunity under the Act and the Competition laws are applicable to these bodies.
Therefore, the Commission concluded that it has jurisdiction over HI67. Similarly, in
BCCI case, it was held that the aspect of 'organization' brings in activities contributing to
the revenues of BCCI such as grant of media rights, sale of tickets etc. The activities of
'organising events' are definitely economic activities as there is revenue dimension to the
organizational activities of BCCI68.

65
BCCI Case, supra note 50 at para 9.5.3.
66
BCCI Case, supra note 50 at 9.5.5, relied on Meca Medina judgment, supra note 20.
67
Id. at para 9.7.5.
68
Id. at para 8.26. The Grand Chamber of ECJ observed in a similar case against ELPA (the authority
participating in authorisation by a public body of motor cycling events and also responsible for
organising motor sports competitions in Greece):

14
The Commission after an analysis of international jurisprudence as well as the
observations of Delhi High Court69 concluded that all Sports Associations are to be
regarded as an enterprise in so far as their entrepreneurial conduct is concerned and
treated at par with other business establishments70.

5.3.2 Extraterritorial Application of law: On the aspect of jurisdiction of the

Commission over FIH being an international federation founded under Swiss law, the
Commission concurred with findings of DG that given the scope of definition of person
contained under Section 2(l) and the extra territorial jurisdiction of the Commission under
Section 32 of the Act, it has jurisdiction over FIH71.

5.4 Definition of Relevant Market: Definition of relevant market has been one of
the important and most difficult issues before the Commission, specifically in relation to
the sports sector. In the BCCI Case Commission found that “Every sports event is unique
in itself and commands its own fan following. Cricket also has its own characteristics that
differentiate it from other sporting events or other entertainment events. A cricket match
cannot be perceived as substitutable by any other sports/entertainment event based on
characteristics. It can also be argued that the intention of the ultimate viewer is
entertainment and therefore, there is a case for broadening the definition and including
other sports and entertainment forms. This argument however does not hold if we
consider the demand substitutability of the various forms of entertainment72.” On the
basis of viewership data and SNNIP test, Commission held the relevant market to be
“Organization of Private Professional Cricket Leagues/Events in India”.

...The fact that MOTOE, the applicant in the main proceedings, is itself a non-profit-making association
has, from that point of view, no effect on the classification as an undertaking of a legal person such as
ELPA. First, it is not inconceivable that, in Greece, there exist, in addition to the associations whose
activities consist in organising and commercially exploiting motorcycling events without seeking to make a
profit, associations which are engaged in that activity and do seek to make a profit and which are thus in
competition with ELPA. Second, non-profit-making associations which offer goods or services on a given
market may find themselves in competition with one another. The success or economic survival of such
associations depends ultimately on their being able to impose, on the relevant market, their services to the
detriment of those offered by the other operators..." [Case No: C-49/07, REFERENCE for a preliminary
ruling under Article 234EC, from the Diikitiko Efetio Athinon (Greece), made by decision of 21 November
2006, received at the Court on 5 February 2007, in the proceedings, Motosykletistiki Omospondia Ellados
NPID (MOTOE) v Elliniko Dimosio, THE COURT (Grand Chamber)]. The Grand Chamber of ECJ on the
case against ELPA had also observed on the question of whether sports constitute economic activity:
...It should be borne in mind in this regard that any activity consisting in offering goods or services on a
given market is an economic activity (see, in particular, Case C-35/96 Commission v Italy [1998] ECR I-
3851, paragraph 36, and Joined Cases C-180/98 to C-184/98 Pavlov and Others (2000) ECR I-6451,
paragraph 75). Provided that that condition is satisfied, the fact that an activity has a connection with sport
does not hinder the application of the rules of the Treaty (Case 36/74 Walrave and Koch (1974) ECR 1405,
paragraph 4, and Case C-415/93 Bosman (1995) ECR I-4921, paragraph 73) including those governing
competition law (see, to that effect, Case C-519/04 P Meca-Medina and Majcen v Commission (2006) ECR
I-6991, paragraphs 22 and 28)..."[Source C-49/07, REFERENCE ibid.)
69
Hemant Sharma & Others Vs Union of India, Delhi High Court, WP(C) 5770/2011, date of decision
04.11.2011
70
BCCI case, supra note 50 at para 7.28
71
Hockey case, supra note 52 at para 9.7.6
72
BCCI case, supra note 50 at para 8.35

15
In the Hockey Case, The Commission was of the opinion that the sports sector comprises
multitude of relationships. For example, a sports Federation may be a seller of various
rights such as media rights, sponsorship rights, and franchise rights associated with each
event and correspondingly there would be a separate set of consumers for such rights.
Similarly, the ultimate viewers of sports event are consumers of the final product that is a
sports event. Also, a sports Federation requires services of players, officials etc. for
staging an event which makes sports Federations themselves as consumers. In this
multitude of relationships, defining the relevant consumer a priori would enable defining
the relevant market73. Accordingly, the Commission went on to define relevant market
from the perspective of ‘foreclosure of market for hockey events to rival leagues’ as "the
market for organization of private professional hockey leagues in India". Relevant
market for analysis of allegations related to restrictions on players' movements, rather in
the context of the specific allegation more so where there are multitudes of consumers as
in the case of sports.

CONCLUSION

The aforesaid primer on the ‘sports and competition law interface’ demonstrates the
issues surrounding this area of law and scope of development. The developments in this
branch of law would be very interesting to note, especially in view of the growing
jurisprudence. The cases before the Commission has definitely brought the issue of
duality of roles exercised by the sports federation and need for fairness in their dealings.
Sometimes these federations act as monopoly buyers (for services of the players) and the
restriction on players by way of sanctioned or un-sanctioned events may lead to
foreclosure of competition. The issues are still open for interpretation before the
Competition Appellate Tribunal and High Court. Only time will tell, wind blows in
which direction.

73
Hockey case, supra note 52 at para 9.8.7

16