The white paper on sport as an exercise in 'better regulation'.

• Author: Weatherill, Stephen

I Better Regulation

The quest for 'Better Regulation' has been a major preoccupation of the European Commission in recent years. The campaign possesses its own web site, which helpfully collects relevant documentation and reveals three priorities (which do not concern the Commission alone): promoting simplification, reduction of administrative burdens and impact assessment as tools of better regulation, working more closely with Member States to ensure that principles of better regulation are applied consistently throughout the EU, and reinforcing dialogue between stakeholders and regulators at EU and national level. (1)

Throughout Europe an emphasis on 'Better Regulation' is hard to miss. (2) There may still be vestiges of left/right political cleavages about the strength of the case for public intervention in markets but there is a broad level of agreement on the need to select smarter regulatory techniques. (3) Some of the debate has been shallow, some of it has been tendentious. No one, after all, would advocate 'Worse Regulation'. And yet even though some of the relevant documentation discloses fine aspirations but relatively few concrete achievements (4), there lies at the core of the EU 'Better Regulation' agenda an earnest and pressing desire to improve the EU's performance as a regulator. And that matters. It has been increasingly common at national level in recent years to emphasise the need to scrutinise with care the costs of regulatory intervention, but it is in relative terms more important at EU level that systematic assessment of the costs and benefits of regulation is undertaken. This is because while States have at their disposal a range of techniques for achieving chosen policies--from regulation to taxation, subsidies to sophisticated patterns of welfare provision, across a wide range of available instruments and policies--the EU operates primarily by regulation. The EU is a creature with a relatively small budget but a very broad rule-making power. (5) Its characteristic modus operandi, as a regulator which is then dependent for policy implementation on choices made at national level, makes it vital that the quality of its regulatory performance be judged and, where possible, improved.

Admittedly, knee-jerk political reaction frequently trumps cool appraisal of costs and benefits. Just as at national level one may be rather sceptical whether the 'Better Regulation' agenda, and associated elements such as ex ante impact assessment applicable to particular proposals, has really been sufficiently powerful to jolt some of the assumptions of (regulatory) politics-as-usual (6), so too at EU level the track record of 'Better Regulation' is not unequivocally successful. The EU needs to consider where and how to regulate, which suggest a need for careful diagnosis of the problem accompanied by clear-sighted and realistic appraisal of the costs and benefits of possible solutions. Active consultation of affected parties is an essential element in this. It needs to address matters of legal competence and it needs to comply with conditions that govern the legality of the exercise of a competence, most prominent among them the principles of subsidiarity and proportionality. Better regulation in the EU is inextricably linked with the question of vertical distribution of powers which level of governance should do what and, if there is to be centralisation, at what level of intensity and/ or exclusivity. (7) The EU must select between available regulatory instruments, binding or non-binding, soft or hard, and it must pay due attention to ex post facto appraisal and to the importance of monitoring adequate implementation of the rules at national level (or, in many Member States, at sub-national level). And in some circumstances it must take into account the place of private actors too. 'Co-regulation' has become a fashionable slogan. Most daunting of all, the EU must keep things simple.

It is doubtless implausible to suppose that the Commission, or the EU more generally (comprising relevant national and EU actors), will succeed in meeting this challenging agenda without attracting criticism, but it is vital that the effort be made. At bottom this is a matter of legitimacy. The poorer the job the EU does as a regulator, the weaker is its claim to be an effective collective problem-solver acting on behalf of the Member States. And--a concern of particular pertinence when applied to the Commission--the less effective the discharge of the tasks assigned to it under the Treaty, the more troubling becomes the absence of orthodox chains of democratic accountability. Put another way, the Commission (in particular) needs to secure legitimation by delivering results, because it cannot do so by claiming representative credentials. (8)

The discourse of 'Better Regulation' infuses the Lisbon process of economic reform in the EU, initiated at the 2000 Lisbon European Council and presented as a means to project the EU to the top of the world's economies judged by competitive and dynamic knowledge-based qualities. 'Better Regulation' also drives sector-specific regulatory innovation and revision such as the 'Lamfalussy process', embraced as the means to advance integration in financial services but unavoidably involving important commitments to allocate responsibility for key regulatory choices at EU level. (9) The Commission's recent reform initiatives in the field of contract law are explicitly linked to the 'Better Regulation' agenda. (10) And amid this cascade of regulatory reform some legislative proposals (but not many) have been noisily withdrawn by the Commission. (11)

It is the purpose of this paper to show how 'Better Regulation' has now come to sport, under the momentum of the Commission's White Paper on Sport released in the summer of 2007. (12) The very fact that a White Paper has been prepared meets some of the dictates of 'Better Regulation' for it promotes transparency in policy formulation. And the accompanying Impact Assessment prepared by the Commission is designed to provide a basis for assessing the costs and benefits of EU regulatory choices. (13) Indeed there is an explicit if passing reference in the Impact Assessment to the EU's general commitment to 'better regulation'. (14) But this paper's concern is broader--and it offers a largely favourable verdict on the White Paper. The Commission has in this document demonstrated a welcome degree of regulatory humility. 'Better Regulation' properly involves finding the right place and method to regulate a particular activity (if there is to be regulation at all). It is by no means clear that the EU is always the right place. But it is troublingly common to find the EU's institutions reluctant to recognise the limits of their own legal competence, their material resources and their basic expertise. The White Paper appreciates such limits. It sets out a case for EU intervention in sport where this is necessary and helpful, but it accepts that much sporting activity is not usefully the subject of elaborate EU supervision, and it instead recognises the proper role of other public and private actors. And--contrary to the complaints loudly and frequently expressed by those involved in the governance of sport--the Commission is by no means ignorant or dismissive of the value in appropriate circumstances of sporting autonomy. The White Paper on Sport, then, is an exercise in 'Better Regulation'.

II The constitutional context

A brief reminder of the constitutional context within which an EU policy on sport has evolved is appropriate, for it provides a frame within which to understand the good sense of much of the caution and modesty which marks the Commission's 2007 White Paper. Article 5(1) EC stipulates that the EC shall act within the limits of the powers conferred upon it by the Treaty. It is equipped with no explicit powers in the field of sport. More than that: the EC Treaty does not mention sport at all. But ab initio in Walrave and Koch (15) the Court rejected a line of reasoning that would have rigidly separated sports governance from EC law. That would have sheltered a huge range of practices with economic impact from the assumptions of EC law, damaging the achievement of the objectives of the Treaty. So the EC's authority to supervise sporting practices derives from the broad functional reach of the relevant rules of EC trade law (free movement and competition law, most conspicuously, and also the basic prohibition against nationality-based discrimination), but it is denied any specific legislative competence in the field of sport. But the Court has never applied EC law to sport as if it were merely a normal industry. Instead a more creative approach has been adopted, requiring a significant investment of resources in making sense of the intersection between the demands of EC law and the aspirations of sport.

The story of the manner in which first the Court and more recently the Commission has developed EC law in its application to sport is a complex though intriguing one. It reflects the need to allow a conditional autonomy under EC law to sporting practices--an autonomy conditional on respect for the core norms of EC law. The matter has been addressed in full elsewhere. (16) In short, however, the core of the challenge is well captured by two observations made by the Court in its famous Bosman ruling. (17)

First, the Court declared that:

'In view of the considerable social importance of sporting activities and in particular football in the Community, the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and of encouraging the recruitment and training of young players must be accepted as legitimate.' (para 106) The Court, while finding that the particular practices impugned in Bosman fell foul of EC law because they did not adequately contribute to these legitimate aims...