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German cartel office claims win in IOC marketing rules challenge

Germany’s Federal Cartel Office, the Bundeskartellamt, has claimed a win in its ongoing action against the German Olympic Sports Confederation (DOSB) and International Olympic Committee (IOC) over the latter’s rules governing athlete endorsement deals at the Olympic Games.

The Bundeskartellamt in October commenced action against the DOSB and IOC over Rule 40.3 of the IOC Charter which states “no competitor who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Games” apart from by official IOC sponsors.

The Bundeskartellamt is concerned over the effective monopolisation of marketing rights during the Olympics, and the subsequent harm that this can have on the earning abilities of athletes. The proceeding was initiated on the basis of a complaint by the Federal Association of the German Sports Goods Industry and in connection with press reports from the last Olympic Games in Rio de Janeiro.

Andreas Mundt, president of the Bundeskartellamt, said: “According to our assessment the rules of DOSB and IOC are too restrictive. The advertising restrictions on athletes and companies can constitute an abuse of the dominant position of DOSB and IOC. Account has to be taken of the fact that the athletes as the performers in the Olympic Games do not benefit directly from the very high advertising revenues generated by the official Olympic sponsors.

“In response to our concerns about competition DOSB and IOC have proposed amendments to their rules which offer more scope for action. We will now present these commitments to various companies, associations and also athletes for their comments. Nevertheless, the revised DOSB rules can be provisionally used in the run up to the coming winter Games in Pyeongchang.”

According to the IOC Guidelines on bye-law 3 to Rule 40 of the Olympic Charter, no athlete participating in the Olympic Games may allow his or her person, name, picture or sports performances during the Olympic Games – and several days before and after the Games – to be used for advertising purposes.

This advertising restriction covers all advertising and social media activities and is valid from nine days before the opening ceremony of the Games until the third day after the closing ceremony. The case is being monitored as the IOC could subsequently see other European markets follow suit, with similar action against its regulations.

The Bundeskartellamt has now said the DOSB and IOC have offered to loosen the previous restrictions on advertising activities exclusively targeted at Germany by means of five specific commitments.

The Bundeskartellamt said the standard for advertising measures will be the Olympiaschutzgesetz (Olympic Protection Act) and the case law of the German Federal Court of Justice. The IOC Guidelines on Rule 40 will now be limited in their application.

The rules for the approval of applications will be amended, with the deadline significantly reduced and not constituting a cut-off period. Generic advertising, as well as greetings or congratulatory messages from the sponsors to athletes will also be permitted during the "frozen period" under certain conditions.

According to the proposed commitments, athletes will be able to share or retweet content from the IOC, local organising committee, DOSB or Team Germany and also link it with greetings or acknowledgments to the sponsors.

The Bundeskartellamt will carry out a market test on the proposed commitments by means of surveys addressed to associations, athletes and sponsors – especially the sporting goods industry. The changes in the new 2016 DOSB Guidelines are subject to the outcome of the market test and are, therefore, provisional.

In March, the IOC elected to maintain the approach employed for ‘Rule 40’ at the 2016 summer Olympic Games with regards athlete endorsement deals at next year’s winter Games in Pyeongchang.

Ahead of Rio 2016, the IOC simplified the implementation of Rule 40 to allow certain non-Olympic advertising during the period of the Games, in order to take into account the important support that personal sponsors provide to athletes, whilst protecting Olympic partners’ rights and further preventing ambush activities.