Poland: Sport Clubs And Sports Associations Targeted By The Polish Competition Authority

Have wage-fixing and no-poach arrangements in the Polish Basketball League been caused by the coronavirus pandemic?

In late October 2022, the Polish Competition Authority (UOKiK) announced that it had issued a decision imposing fines of almost PLN 1 million (i.e. approx. EUR 210,000) on the Polish Basketball League (Polska Liga Koszykówki) and 16 member clubs. The UOKiK had found that the sanctioned entities had entered into joint arrangements that they used to terminate their cooperation with basketball players, and that those arrangements restricted competition.

The UOKiK's decision concerns the 2019/2020 season, which was affected by the coronavirus pandemic and had to be brought to an end prematurely. At the time, clubs allegedly agreed to terminate contracts with basketball players in order to avoid paying them for the rest of the season. The UOKiK's press release states that the clubs believed that the mutual obligations between them and the players had expired due to the inability of both sides to render services due to the pandemic. By coordinating the termination process, the clubs avoided the risk of players moving to another club for the next season.

The UOKiK recalled that sport clubs are entrepreneurs within the meaning of both Polish and EU competition law. The President of UOKiK stated that clubs – which compete with each other - "were able to illegally exchange sensitive information and eliminate an important factor affecting competition between them, i.e. rivalry for the best players."

The 2019/2020 season was a particularly difficult one, but the UOKiK has not found similar arrangements in other sport disciplines (such as volleyball or football), even though they faced the same or very similar restrictions.

It is worth pointing out that, before initiating antitrust proceedings, the UOKiK discussed this matter with the European Commission (which agreed with the UOKiK's concerns) and with the competition authority in Lithuania, which conducted similar proceedings against clubs in the Lithuanian Basketball League. However, a decision by the Lithuanian competition authority was annulled by a court in June 2022 due to an incorrect assessment of the facts and a lack of clear evidence.

The UOKiK's decision is not final and binding yet, and can be appealed in court.

Restriction of competition having an effect on trade between EU Member States?

The UOKiK has conducted proceedings concerning sports associations such as the Polish Football Association (Polski Zwiazek Pilki Noznej) in the past, but the basketball case is the first to concern relations between clubs and players. In addition, the UOKiK is currently conducting antitrust proceedings against the Speedway Extra League (Ekstraliga Zuzlowa) and the Polish Automobile and Motorcycle Federation (Polski Zwiazek Motorowy, PZM) for fixing the maximum rates for racers participating in speedway competitions.

The PZM organises speedway events in Poland. Based on the agreement with it, Speedway Extra League manages speedway competitions at the highest league level in Poland. The PZM also organises lower-level competitions. With the participation of the Speedway Extra League, the PZM adopted organisational regulations that laid down maximum remuneration rates that sport clubs taking part in PZM competitions could pay to racers - thereby limiting clubs' ability to compete for the best of them.

Furthermore, as many foreign racers compete in Polish leagues, the President of UOKiK concluded, "the practice could have an effect on trade between EU Member States within the meaning of the Treaty on the Functioning of the European Union."

The proceedings are ongoing.