U.S. Soccer Takes FIFA Antitrust Case to SCOTUS
Soccer fans can see the legendary Lionel Messi in U.S. stadiums now that he plays for Inter Miami CF. But what about a regular-season match between FC Barcelona (his former club) and rivals in "La Liga," Girona FC? Whether these teams could compete in a regular-season match in the U.S. is the subject of an antitrust lawsuit that could potentially be taken up by the U.S. Supreme Court.
The Fight Kicks Off
The U.S. Soccer Federation (USSF) has appealed a ruling by the 2nd Circuit U.S. Court of Appeals over a 2018 FIFA policy prohibiting league games in foreign countries. FIFA, or the International Association Football Federation, is the international governing body of soccer (football).
The case arose from a 2018 plan to host several foreign league regular-season matches in the U.S. Relevent Sports is a U.S. soccer promoter that had sought USSF's approval to host a number of official games between foreign teams on American soil, including one between the Spanish giant FC Barcelona and Girona FC, which both compete in Spain's La Liga. FIFA was not happy with the plan and implemented a rule banning any such future matches. The USSF also did not sanction the matches. In response, Relevent Sports accused USSF of engaging in a conspiracy to divide geographic markets and prevent competition with the country's domestic top league, Major League Soccer.
In March 2020, the Antitrust Division of the U.S. Department of Justice (DOJ) had advised both FIFA and USSF in a letter that sports organizations "are not categorically immune" from liability under antitrust law. The letter noted that market allocation was a per se violation of U.S. antitrust laws. It also highlighted the DOJ's concern that FIFA's proposed rule potentially violates U.S. antitrust laws "by restricting the territory in which teams can play league games."
In July 2021, a federal district court in New York found that Relevent Sports LLC had failed to show an illegal conspiracy to restrict where teams play under the Sherman Act, and that it had not adequately proved that there had been an agreement in place prior to the 2018 policy between FIFA and USSF to restrain the market for soccer games. Relevent Sports went on to appeal the district court's decision.
2nd Circuit Refuses to Play Ball with FIFA Policy
The case was next appealed to the 2nd Circuit Court of Appeals. The DOJ filed an amicus brief in the case, which is an argument that courts allow to come from non-parties that take one side or the other. The DOJ basically wrote to support Relevent Sports' side. In its brief, it argued that not only was the district court's holding legally incorrect, it could also improperly shield many anticompetitive association rules from scrutiny under Section 1 of the Sherman Act in both public and private antitrust enforcement actions.
The 2nd Circuit was convinced. In March, 2023, it vacated the district court's finding in a 3-0 decision. The panel of judges noted that the 2018 Policy did not relate to internal organizational matters such as " how many players may be on the field or the time allotted for play." Instead, the rule was a geographic limitation on where various leagues could compete for ticket sales. Therefore, by adopting the 2018 Policy, FIFA and its member associations were implementing an anticompetitive geographic market division.
The 2nd Circuit held that Relevent Sports did not need to make specific allegations that USSF actually conspired with FIFA or its other members to agree to the 2018 policy limiting official games to a league's home territory. The general acceptance of the rule was enough to show collective action.
Ball Now in Supreme Court
The 2nd Circuit's decision raised the prospect of U.S. stadiums eventually hosting regular-season matches between foreign teams. These foreign teams could compete for fans and sponsors now supporting FIFA-affiliated Major League Soccer. Some European and South American teams play "friendly" matches in the United States, but not regular season matches.
USSF maintains that the 2nd Circuit's ruling has allowed Relevent Sports to plead a "global antitrust conspiracy." This could lead to excessive damages against thousands of entities ranging from U.S. Soccer to the English Premier League to FC Tokyo. USSF continue to dispute the allegation that all these different national associations had any role whatsoever in the challenged 2018 FIFA policy.
USSF has emphasized that this dispute has "immensely important consequences" for the thousands of membership associations across the United States and their individual members' ability and willingness to collaborate in procompetitive ways.
The votes of four SCOTUS justices are required to "grant certiorari" (a.k.a, to take up the case). As the Supreme Court is currently on recess, the case will not be considered by the court until the end of September at the earliest. Perhaps even U.S. soccer won't be immune to the effects of globalization. Those professionally involved in soccer and soccer fans alike will all be interested in the ultimate decision.
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