In Finland, the highest tier of professional ice hockey, SM-liiga (the “League“), has operated as a closed league since 2013. Consequently, League members have not faced the risk of relegation to a lower division, while the admission of new teams has depended solely on the League’s discretion. Inspired by the Superleague judgment of the Court of Justice of the European Union, an investigation by the Finnish Competition and Consumer Authority (the “FCCA“) led to amendments to the League’s rules, which now allow promotion to the top tier on the basis of sporting merit.
Background
Ice hockey is Finland’s commercially most significant team sport, and the League occupies a unique position within Finnish professional sport. The Finnish Ice Hockey Association (Suomen Jääkiekkoliitto, the “FIHA“) is the national governing body recognised by the International Ice Hockey Federation (IIHF). However, the organisation and operation of the highest domestic league have been delegated to the League, a limited liability company owned by the clubs participating in the League. Under agreements concluded between the League and the FIHA, the League enjoys the exclusive right to organise the highest level of men’s ice hockey competition in Finland and to administer all rights and obligations associated with that competition.
Since the establishment of the League in 1975, clubs competing in the second-tier league (Mestis) could earn promotion to the League through rules linked, at least to a significant extent, to sporting performance, e.g. promotion and relegation play-offs, direct promotion and relegation, or by satisfying the sporting, financial and infrastructural criteria established for participation at the highest level.
However, in 2012 the League initiated a major structural reform under which the promotion and relegation system was replaced by a licensing model. Under the new arrangement, no automatic sporting pathway existed between Mestis and the League. Instead, a Mestis club seeking entry to the League had to apply for a League licence and satisfy a range of financial, organisational and facility-related requirements.
While the licensing system formally allowed Mestis champions to apply for entry, the FCCA found that the League retained broad discretion as to whether licences would be granted and whether new clubs would ultimately be admitted. As a result, incumbent League clubs enjoyed a high degree of security regarding their League status, while Mestis clubs faced significant barriers to entry into the top tier.
The FCCA’s investigation focused on the following issues:
- The criteria for granting a licence were not transparent, objective, or sufficiently precise;
- The members of the Licence Committee were appointed solely by the League, and the League was not bound by the Committee’s assessment when deciding whether to admit a new club to the League; and
- The mandatory share purchase requirement made it economically difficult for a new club to join the League due to the price of the shares.
Legal Framework
From a competition law perspective, the conduct of a first-tier sports league may be assessed either as an abuse of a dominant position under Article 102 TFEU or as a decision of an association of undertakings constituting unlawful horizontal cooperation between the participating clubs under Article 101 TFEU. The Court of Justice has confirmed that the same conduct may infringe both provisions.
The FCCA applied these provisions, together with the corresponding provisions of the Finnish Competition Act (948/2011, as amended), in accordance with the principles developed by the Court of Justice, in particular in Case C‑333/21, European Superleague Company. It should be emphasised that the factual circumstances of the two cases differed significantly. In Superleague, FIFA and UEFA were criticised for preventing clubs from establishing or participating in competitions that were not organised under their regulatory framework. By contrast, the Finnish Ice Hockey case concerned clubs’ ability to participate in a competition organised by the dominant undertaking itself. Nevertheless, the legality of the conduct was assessed under the same legal framework, consisting of the following steps:
1) The associations constitute undertakings for the purposes of competition law, as they engage in economic activities consisting of (i) the organisation and marketing of competitions and (ii) the exploitation of the associated commercial and media rights. (Paragraphs 83–93 of the Superleague judgment and paragraphs 60–62 of the FCCA’s decision)
2) The associations enjoy a dominant position, both de facto and de jure, since they are the only associations which organise and market competitions at the highest level, and their position has been established by contractual arrangements which, e.g., restrict clubs’ freedom to participate in competitions organised by third parties. (Paragraph 117 of the Superleague judgment and paragraph 65 of the FCCA’s decision)
3) This step highlights the key factual difference between the two cases. Nevertheless, the way in which the competition concerns were formulated is remarkably similar:
a. In Superleague, the Court of Justice held that, to entrust an undertaking which exercises a given economic activity the power to determine
– which other undertakings are also authorised to engage in that activity; and
– the conditions in which that activity may be exercised,
gives rise to a conflict of interests and puts that undertaking at an obvious advantage over its competitors, by enabling it to deny them entry to the market concerned or to favour its own activity. (Paragraph 133 of the Superleague judgment)
b. In the Finnish Ice Hockey case, the FCCA considered that to entrust an undertaking which exercises a given economic activity the power to determine
– which undertakings are authorised to participate in that activity; and
– the conditions in which they may participate in that activity,
gives rise to a conflict of interests and puts that undertaking at an obvious advantage over its competitors, by enabling it to deny entry to the market concerned and to favour its own activity. (Paragraph 86 of the FCCA’s decision)
4) The conferral of such powers on the undertaking concerned, or the existence of a comparable situation in the relevant market, must be subject to restrictions, obligations and review mechanism capable of eliminating the risk of abuse of its dominant position by that undertaking. (Paragraph 134 of the Superleague judgment and paragraph 87 of the FCCA’s decision)
5) More specifically, where the undertaking concerned exercises such powers on a case-by-case basis, those powers must be placed within a framework of substantive criteria which are transparent, clear and precise, so as to prevent their exercise in an arbitrary manner. (Paragraph 135 of the Superleague judgment and paragraph 88 of the FCCA’s decision)
Decision of the FCCA
The FCCA considered that the League’s arrangements introduced in 2013 potentially restricted competition by allowing incumbent League clubs substantial control over access to the League, notwithstanding certain subsequent modifications. However, because the League adopted structural reforms that addressed the principal competition concerns identified during the investigation, the FCCA concluded that further enforcement action was unnecessary and closed the case, while reserving the right to reopen the matter should new information come to light. Although the FCCA’s decision formally took the form of a closure of the investigation rather than an infringement decision, its reasoning leaves little doubt that the authority considered the arrangements under investigation to be incompatible with competition law.
The League structure
The first major reform concerned the restoration of sporting promotion and relegation. In October 2023, the League decided to reintroduce promotion and relegation play-offs between the League and Mestis from the spring of 2025 onwards. The new system restored the principle that clubs may earn promotion through sporting success on the ice. Under the agreement concluded between the League and the FIHA, the winner of the promotion and relegation series may be promoted to the League, provided that it also satisfies the applicable licensing requirements. Conversely, the losing League club may be relegated to Mestis. In the FCCA’s view, the reintroduction of promotion and relegation increased the competitive pressure faced by incumbent League clubs and strengthened the opportunities of Mestis clubs to exploit commercial rights associated with the sport.
The League subsequently approved a comprehensive reform of the league structure itself. Beginning with the 2027/28 season, Finnish professional men’s ice hockey organised under the League’s authority is expected to move to a two-tier league system. The upper tier will comprise fourteen clubs, while the lower tier will consist of ten clubs. Both tiers will be organised by the League, and movement between the two tiers will occur through direct promotion and direct relegation. The 2026/27 season is intended to serve as a transitional season before the new structure enters into force.
The licence rules and the Licence Committee
The second major reform concerned the allocation of decision-making powers relating to League admission and licensing. Under the revised arrangements, the licence requirements will continue to be prepared by the League, reflecting its expertise in organising the competition. However, the licence rules must now be submitted to the FIHA for approval before entering into force. The FIHA may require amendments and return the proposed licence criteria to the League for further preparation if it considers that the rules do not adequately serve their intended objectives. In addition, an external auditing firm will review the license rules.
A related reform concerned the Licence Committee itself. Until recently, all members of the committee were appointed by the League’s Board of Directors. The FCCA considered this arrangement problematic since the committee was responsible for determining whether potential competitors of existing League clubs would be granted the licences required for participation in the League. To address this concern, the League decided to transfer the Licence Committee from its sphere of control to that of the FIHA. Going forward, the members of the committee will be appointed by the FIHA.
Requirement to purchase a League share
The FCCA also expressed serious concerns regarding the requirement that clubs seeking admission to the League purchase a League share. During the investigation, the authority noted that the value of a share had increased to approximately EUR 2.2 million. In the FCCA’s view, this constituted a potentially significant barrier to entry, given that the amount corresponded broadly to League clubs’ annual player budgets, which had recently ranged between EUR 1.5 million and EUR 3.5 million.
Under the new framework, clubs will no longer be required to own a League share in order to participate in the competition. Instead, participation may be based on the payment of a licence fee. The system therefore moves away from a purely ownership-based model towards a hybrid structure combining ownership-based participation and licence-based participation. According to the League, the purpose of this reform is to reduce the financial threshold for entry into the top division and thereby make promotion more realistic for clubs outside the League. The League’s stated objective is to preserve incentives for long-term ownership while reducing the initial financial burden faced by incoming clubs. The FCCA specifically noted that the effectiveness of the reform would depend on ensuring that clubs participating on the basis of a licence fee are not placed at a disadvantage, particularly with regard to revenue distribution.
Conclusion
Taken together, the FCCA considered that these reforms significantly reduced the League’s ability to control access to the highest level of Finnish ice hockey for the benefit of incumbent clubs. The authority concluded that the measures eliminated many of the features that had originally prompted the investigation and created a substantially more transparent, independent and open system for determining participation in Finland’s premier professional ice hockey competition.
The case illustrates how the principles established by the Court of Justice in Superleague may extend beyond the regulation of competing sports events and require dominant sports bodies to ensure that access to existing competitions is governed by transparent, objective and non-discriminatory criteria.