Chillin'Competition

Surprising competition authorities as well as its own players –who have just started the pre-season in Los Angeles- Real Madrid C.F. (hereinafter “RM”) has apparently lodged an antitrust complaint against FC.Barcelona(“FCB”). RM alleges that FCB has abused the dominant position it has enjoyed in the European and Spanish football market for the past 3 years.

Some rumors point at a charismatic RM employee as the mastermind of this complaint, which was submitted on the same day he returned from his holidays in  his hometown of Setúbal (Portugal).

The complaint is based on the following grounds:

Dominance. The complaint alleges that FCB is dominant in as much as it enjoys a 77% market share (having won 10 out of the 13 titles in play in the past 3 years). A more detailed analysis reveals that FCB controls 75% of the Spanish market (having won 6 out of 8 competitions) and 80% of the EU market (having won 4 out of 5 competitions).

Barriers to entry-Vertical Integration. According to RM´s complaint, FCB´s vertical integration makes it impossible for other clubs to gain a foothold on this market. The complaint explains that for the past 20 years a subsidiary of FCB (La Masía) has produced players (e.g. Messi, Iniesta or Xavi) with such features that enable them to correctly interoperate/play only with other FCB players and not with those of competitors. Besides, injured or retired FCB players can be constantly replaced by a new folk from La Masía, thus guaranteeing an unfair market control by the alleged abuser.

Abusive Behavior. According to the complaint, the misconduct of FCB also includes “acting and faking”. Such conduct would have allegedly led regulators and referees to incur in errors in the events where a direct competition between RM and FCB has taken place. In this sense, the complaint appears to be based on the General Court´s Astra Zeneca Judgment.

The complaint – in which the word “why” is repeated 17 times– also mentions the reinforcement of the situation by international organizations such as Unicef and the reputed publication The Economist, which recently published an article entitled The Catalan Kings, where FCB virtues were praised but its misconduct was not denounced.

Remedies sought. RM seeks the cessation of the allegedly anti-competitive conduct as well as the reparation of the damage suffered during these years. In particular, RM has asked the competition authorities to impose both structural and behavioral remedies on FCB.

Some suggested structural remedies would consist of divesting some of the most decisive assets of FCB (“primarily FCB should get rid of Lionel Messi or, subsidiarily, the binomial Xavi – Iniesta should be somehow split”).  Possible behavioral remedies would include “restricting the possession of the ball to no more than 50% in any game” or “sharing of know-how with rivals before, during and after any game”.

[Note by Alfonso: César Chaparro (a very good friend, a former antitrust lawyer, and currently an official at the World Bank –based in Washington DC and Nairobi-) has sent us this report about a competition case that could bring about a revolution in world football. As you have seen, it´s a joke with which César –who is a great guy but happens to support Barça (nobody is perfect) wanted to tease me. Given that the lawyer who represents Real Madrid in competition related matters is a subscriber of this blog it would also be interesting to find out about his opinion on this “news” too..)  And if you really want to know how FC Barcelona trains, watch this]