Mo Farah, Laura Muir and a number of other high-profile British athletes have threatened legal action against the British Olympic Association alleging anti-competitive restrictions on athletes’ personal sponsorships during the Olympic Games. This comes after proceedings in Germany where the competition authority there found that certain rules of the Olympic charter breached EU competition law.

German Competition Authority Proceedings

In February 2019 the Bundeskartellamt, the German competition authority, brought administrative proceedings against DOSB, the German National Olympic Committee (NOC), and the International Olympic Council (IOC) asserting that Rule 40 of the Olympic Charter breached EU competition law.

• Rule 40(3) of the Olympic Charter prevents athletes from promoting their own sponsors for the Olympic Games.
• Each NOC can then set its own guidelines provided it stays within the parameters of the Olympic Charter.
• The restriction period applies from nine days before the opening ceremony until three days after the closing ceremony.

The DOSB and the IOC argued that the advertising restriction prevented ambush marketing of the Olympic Games by non-Olympic sponsors, thereby protecting the main sponsors’ exclusive rights and preserving the value of the Olympic brand.

Advertising Restriction in Olympic Charter Anti-Competitive

The Bundeskartellamt found that the advertising restriction in Rule 40(3) was anti-competitive and that that the DOSB and IOC had abused their dominant position and breached EU Competition law. In particular, it found that members of the Olympic movement, which includes the DOSB and the IOC, have a collectively dominant position in the market for the organisation and marketing of the Olympic Games, that it had abused that position and finally, that the advertising restriction could not be objectively justified as it was not proportionate to the IOC’s objective of protecting the Olympic Games from ambush marketing. The Bundeskartellamt further noted that it should be possible for athletes to generate revenue in order to cover the costs they incur in competing in the Olympic Games.

Relaxation of the Rule

Following this decision, the DSOB and the IOC relaxed the interpretation of Rule 40(3) in Germany by giving German athletes more leeway to market themselves during the Olympic Games. For example, German athletes can now use competition pictures of themselves for advertising purposes during the Olympic Games provided they do not use Olympic symbols, designations or logos. Following this example, the United States Olympic and Paralympic Committee have amended their rules to allow athletes to thank their personal sponsors and receive congratulatory messages.

Proceedings threatened against the British Olympic Association

The British Olympic Association (BOA) also updated its Rule 40 guidelines, now allowing athletes to post one thank you message to each personal sponsor during the Olympic Games provided it does not contain any Olympic or Team Great Britain (Team GB) branding.

However, a number of high-profile British athletes, including Mo Farah, Katarina Johnson-Thompson and Laura Muir, have written to the BOA alleging that the updated guidelines are still anti-competitive and the athletes have threatened to seek injunctive relief and/or damages if the guidelines are not changed.

The athletes submit a number of the arguments that were asserted in the German proceedings. The athletes argue that they will lose out on revenue with their personal sponsors during the most profitable period of their careers. They also say that the commercial value of athletes sponsored by non-BOA sportswear brands is depressed as they are prevented from activating their own sportswear sponsorship during the Olympic Games. For example, some Team GB athletes have existing personal sponsorship deals with Adidas and can undertake marketing activities with Adidas during the Olympic Games because Adidas is also the official sportswear partner of Team GB. These athletes can therefore maximise their income during the Olympic Games. However, athletes sponsored by other sportswear brands, such as Nike or New Balance, are prohibited from effectively activating sponsorship agreements with these brands during the Olympic Games because they are not Olympic brands.
The athletes have reserved their right to bring proceedings against BOA or to make a complaint to the Competition and Markets Authority if the BOA guidelines are not changed.

What is on the horizon for Irish athletes?

The outcome of the dispute will be of interest to Irish athletes and the Olympic Federation of Ireland as the EU competition law principles equally apply in this jurisdiction. It remains to be seen if the Irish Competition and Consumer Protection Commission will consider the issue in advance of the Tokyo 2020 Olympic Games.
We previously considered the interplay between competition law and Rule 40 of the Olympic Charter here in 2018.

Contributed by: Patrick Murphy & Donnacha Egan

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