This is the Judgment of the Court of Justice of 30 April 2026. For a critical analysis of the Advocate General’s Opinion in this case, see this entry.
The relevant facts from a Competition Law perspective are set within the context of the standstill of Portuguese professional football following the COVID-19 pandemic and, in particular, the coordinated reaction of clubs to the risk of unilateral contract terminations by players.
Following the suspension of the 2019/2020 season decreed by the Portuguese Professional Football League (LPFP) and the failure of collective bargaining with the players' union regarding wages, on April 7 and 8, 2020, the clubs of the Primeira Liga and Segunda Liga, meeting separately via videoconference under the auspices of the LPFP, adopted and publicly announced an agreement whereby no club would sign players who had unilaterally terminated their contracts citing difficulties arising from the pandemic or the exceptional extension of the season.
The CJEU responds to the Portuguese court by confirming that such an agreement constitutes a restrictive agreement by object and repeats the formulation first introduced in Cartes Bancaires: restrictions by object are, fundamentally, cartels—that is, agreements between competing undertakings to fix common prices or share markets (paragraphs 39 et seq.).
"...that concept must be understood as referring only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition that it may be found that there is no need to examine their effects. Certain forms of coordination between undertakings can be regarded, by their very nature, as being harmful to the proper functioning of competition... they include, first and foremost, certain collusive behaviors which are particularly harmful to competition, such as horizontal cartels leading to price-fixing, market sharing, limitation of production capacity or customer allocation. Such conduct can lead to price increases or, consequently, a reduction in production and thus supply, resulting in a misuse of resources to the detriment of user undertakings and consumers (see, in that sense, judgment of 21 December 2023, European Superleague Company, C-333/21, EU:C:2023:1011, paragraph 163 and the case-law cited)."
It should be remembered (the CJEU addresses this at the end of its judgment) that the distinction between restriction by object and by effect does not prevent a restriction by object from being considered lawful and even authorized ex Article 101(3) TFEU. This is a difference between European law and North American law (which utilizes the distinction between per se anticompetitive conduct and conduct to which the rule of reason is applied).
Subsequently, however, the CJEU errs and, persevering in that error, includes among restrictions by object boycott agreements (to which it refers by saying that they have the effect of excluding a competitor from the market) or alleged decisions by associations of undertakings.
"It may be considered that, without necessarily being so harmful to competition, other types of conduct may also have, in certain cases, an anticompetitive object. This is the case, in particular, of certain types of horizontal agreements other than cartels, for example those leading to the exclusion of competing undertakings from the market, or certain types of decisions by associations of undertakings."
In my view, boycott agreements are cartels, insofar as they coordinate—just like market-sharing agreements—the conduct of participating undertakings in the market but, above all, they are enforcement mechanisms for a cartel; that is, if there is an agreement to boycott a specific undertaking, it is because that undertaking has refused to participate in the cartel or is breaching the terms agreed upon by the cartelists. Boycotting an undertaking without such an underlying reason does not seem to be rational conduct. Regarding "certain types of decisions by associations of undertakings," the CJEU refers to the Superleague case and, as I have explained elsewhere, the decisions of UEFA or FIFA are not decisions by associations of undertakings but rather unilateral decisions by an 'operator' in the market, which must be assessed from the perspective of abuse of a dominant position.
The CJEU reproduces the wordy and useless doctrine established by the Court to determine when, in a specific case, we are facing a cartel (see paragraph 43). It is of no help at all to say that the competition authority must examine whether the conduct in question:
"...contains a form of coordination that must be considered, by its very nature, harmful to the proper and normal functioning of competition, it is necessary to examine, first, the content of the agreement, decision or practice in question; second, the economic and legal context in which it is inserted; and, third, the objectives it seeks to attain (the part about whether, in the particular case, the "coordination... is... capable of leading to conditions of competition that do not correspond to the normal conditions of the market" is even more useless and quite difficult to reconcile with the lack of necessity to examine the effects the conduct has produced in the market)."
I say "at all" because, in most cases, it is very easy to determine if we are facing a cartel (it is like pornography). And, for the difficult cases, the question to ask is whether the competitors who have agreed to behave in a similar or coordinated manner in the market achieve market power through the agreement that they did not enjoy prior to it.
The CJEU takes a turn from paragraph 47 onwards. In it, it reproduces the doctrine according to which, in the case of cartels:
"the analysis of the economic and legal context of which that conduct forms part may be limited to what is strictly necessary to conclude that there is a restriction of competition by object"
but,
"in the case of other types of conduct which, while not necessarily as harmful to competition, may reveal a sufficient degree of harm to support the conclusion that they have an anticompetitive object,"
This is shameful. Should the authority establish a ranking of all possible anticompetitive behaviors and assign the one it has to examine higher or lower in said ranking? Where is that graduation in Article 101.1? It is already debatable enough that the distinction between restrictions by object and by effect carries the relevance the CJEU attributes to it (in my opinion, it is an irrelevant distinction because Article 101(1) TFEU only contains a prohibition of cartels and conduct evaluatively similar to a cartel).
But above all, what difference is there between conduct that reveals a "sufficient degree of harm" to competition and those that are "not necessarily as harmful to competition" such that it is possible to distinguish the type of analysis required and, in the latter:
"...carry out a more detailed analysis of all the aforementioned factors... which implies, when necessary, taking into account the relevant regulatory and institutional framework?... taking into account that context may lead to the conclusion that particular circumstances surrounding that conduct demonstrate that it is not sufficiently harmful to justify such a classification."
In any event, even in the case of a classic cartel, the analysis of the context must take into account the regulatory and institutional framework (see, here, the magnificent context analysis performed by Richard Posner in a US case). There are benign cartels, and benign cartels do not fall under the prohibition of Article 101(1) TFEU. It is unnecessary to further complicate the taxonomy, and there is a desperate need to reduce the CJEU's verbosity.
Next, the CJEU applies this purported analysis to the conduct subject to the preliminary ruling and asserts that we are facing a cartel (a restriction by object) but that the "context" may lead to the legitimation of the agreement in question. Why?
The famous idea of "competitive balance", that is, the notion that competition between clubs participating in a league could be restricted to prevent "the same ones from always winning." This is an idea of very little value, imported from North American leagues whose members heavily restrict competition (salary caps, above all), and which has proven to be erroneous: European leagues, without competition restrictions, are more competitive and, above all, more attractive to the public (meritocracy). I have addressed this issue in this entry.
The exceptionality of the pandemic allows for the "saving" of the validity of cartel agreements if the objective is, as in corporate bailouts with state aid, for the market to return to normal functioning as soon as possible (paragraph 73).
In particular, due to said pandemic and the suspension of the 2019/2020 sports season that derived from it, the restart of matches still pending within the framework of the national championships of the Primeira and Segunda Ligas remained uncertain at the time the contested agreement was concluded in the main proceedings, an uncertainty that affected both the date of conclusion of that season, in case of resumption, and the date of expiration of the employment contracts of certain players. Indeed, in the absence of adequate measures, players who had unilaterally terminated their employment contract due to said pandemic or whose contract had expired on the date initially scheduled for the end of the season, namely 30 June 2020, would have been able to be freely hired by another club subsequently, which would have inevitably and significantly altered the composition of the different teams and, therefore, undermined the integrity of the competition. Furthermore, as the Advocate General essentially emphasizes in points 57 and 58 of his Opinion, such a situation could have been aggravated if the economic and financial difficulties faced by the clubs affected by those player departures had prevented them from hiring new players due to a lack of sufficient liquidity.
And in paragraph 82, it reproduces the argument of the Portuguese court according to which the agreement between the clubs sought to:
"...preserve the stability of the player squads from which the clubs could form their respective teams throughout the period of suspension sine die of the 2019/2020 sports season and, in this way, allow the resumption of the championship as soon as possible under conditions that guaranteed its integrity."
And 86:
"...the referring court may validly consider that the agreement contested in the main proceedings simultaneously pursued an objectively anticompetitive objective, related to the restriction of competition in the market for the recruitment of players, and an objectively pro-competitive objective, consisting of guaranteeing the stability of the player squads participating in the national championships of the Primeira and Segunda Ligas, limiting the hiring, by participating clubs, of players whose employment contract had expired or had been unilaterally terminated by the interested party for a reason related to the COVID-19 pandemic, even during the period between the date the 2019/2020 sports season should have concluded in the absence of suspension and the date finally chosen, in case of resumption, for its conclusion."
To conclude that a cartel is prohibited by Article 101.1 unless it is, in the specific case, a benign cartel, in which case it is not prohibited by Article 101(1) TFEU (paragraph 89):
"...must be classified as an agreement that has as its object the restriction of competition, unless the specific analysis of the content of said agreement, of its objective purposes in relation to competition, and of the specific economic and legal context in which it is inscribed reveals the precise reasons why the authority or the competent court considers that such a classification cannot be accepted."
In short, the TFEU takes two steps forward and one step back, which will eventually lead it sooner rather than later to redefine the concept of restriction of competition within the meaning of Article 101(1) TFEU and to configure said provision as a prohibition of cartels and similar conduct, to conceive Article 101(3) TFEU as the instrument to save benign cartels from the prohibition of 101(1), and to analyze under the concept of "decisions of associations of undertakings" exclusively those cartels agreed upon between the members of an association—that is, the coordination of market conduct among members of an association—and not to judge the decisions of the association's corporate bodies, which should be assessed under the prohibition of abuse of a dominant position.
