Player Restraints and Competition Law throughout the World01 Jan 2005
This article reviews agreements among clubs participating in league sports in many countries throughout the world that limit competition for the services of players. Under the English common law (which governs in most of the British commonwealth), the competition law provisions of the European Union's governing treaty, the American Sherman Act, and the Canadian Competition Act, the governing standard is quite similar. Player restraints cab only be justified if they are related to a legitimate purpose, which is usually defined as one that demonstrably improves the consumer appeal for the sporting competition. Moreover, and significantly, player restraints must be reasonably necessary to achieve the demonstrated purpose; in short, overbroad restraints are not consistent with competition law. Competition law provides a meaningful, effective, and under-utilized constraint on the monopsony power of sports leagues. Although American players must surmount an additional obstacle of waiving rights under labor law, this obstacle is not present elsewhere. In all relevant jurisdictions, sensible application of competition law principles is superior to a laissez faire approach or direct government regulation, and is less intrusive than a restructuring of league sports to eliminate monopsony power.