In the previous article in our The Future of Sports Data series, we turned our focus from athletes’ data to live sports data, and in particular the ongoing legal challenges we are seeing related to exclusive distribution agreements for the collection and distribution of live sports data. In that article we looked at the case of The Racing Partnership v SIS where legal actions based on breach of confidence and unlawful means conspiracy have been brought in order to protect alleged rights in live sports data. In this article, we consider another ongoing legal challenge, which is brought on competition law grounds.
Competition concerns with exclusive distribution rights (the case of Sportradar, GeniusSport and Football DataCo)
The business of sports data keeps growing, in particular as sporting bodies and related businesses find ways of commercialising in-play activities. The betting market has found great use for sports data, thus increasing its value, helping provide odds to bookmakers and assisting bettors through statistics.
However, exclusive access to the data, and in this case access to football stadia where matches are being played, and data generated, raises competition law issues. Specifically, where sporting bodies with de facto ownership of the data look to limit access to the data for downstream competitors that supply bookmarkers with data feeds. This issue is being considered at present by the Competition Appeal Tribunal in the case of Sportradar AG v Football DataCo, with potential wide-ranging repercussions for rights owners, exclusive rights licensors and third parties seeking to exploit those rights. Some may recall that this is not the first time that these parties have been embroiled in sports data-related litigation, with the previous litigation brought by Football DataCo against Sportradar on the basis that the latter was infringing the former’s database rights.
Background to the dispute
Sportradar provides sports data and betting services (“SDB Services”) to bookmakers, including live (or “in-play”) data about football matches. Bookmakers use that data to offer live betting whilst the match takes place. For example, a bet can be placed on which team will concede a goal next, which player will score the goal, at what time, etc. Sportradar’s competitors, Genius, Stats Perform, IMG, and Betconstruct also provide SDB Services.
The Football Association Premier League (“FAPL”) and the Football League (“EFL”) organise professional football matches in several leagues in England, including the Premier League comprising the top 20 English clubs. These clubs are shareholders of the FAPL. The FAPL and EFL own Football Data Co (“FDC”).
The relevant leagues look to monetise the live league match data (“LLMD”) that can be recorded at the various stadia, and have entered into agreements with FDC granting it the right to attend all matches to do so. FDC also has the right to sub-license or appoint third parties to record, aggregate, and distribute the data collected at the stadia. The leagues and clubs have rules setting restricting stadia visitors from collecting or distributing live data without a licence, and likewise match tickets contain terms and conditions imposing similar limitations.
In mid-2019, FDC entered into an agreement granting Genius a five-year exclusive right to collect LLMD at matches in the relevant leagues, and to supply that LLMD to betting customers/bookmakers. Genius had, in turn, the exclusive right to further supply LLMD (so-called “on-supply”) to others on a non-exclusive and non-discriminatory basis for betting customers/bookmakers.
The Parties’ Claims
Sportradar alleges that the agreement between FDC and Genius breaches EU and UK competition law and that FDC has abused its dominant position. In particular, that the grant of five-year exclusivity rights restricts competition in the gathering of LLMD to on-supply bookmakers with that data.
Sportradar also claims that FDC is dominant in the market for the supply of LLMD, and that entering into the agreement with Genius constitutes an abuse by inhibiting the provision of LLMD by SDSB Services.
Moreover, Sportradar asserted that the stadia and ticket rules, preventing attendees from collecting and distributing LLMD, are not a justification for the exclusive licence. In particular, claiming that:
Reliance on any restrictions contained in such terms and conditions of entry in order to give effect to the unlawful agreement or concerted practice is, in turn, unlawful;
The grant by FDC to Genius of a five year exclusive licence to collect, store, license and supply LLMD to the betting market taken together with the ground regulations and/or ticketing conditions have the object and/or appreciable effect of restricting competition in breach of competition law by ensuring that Genius is in practice shielded from competition in its supply of LLMD; and/or
The holders of any such property rights are required to grant access to SDB Services to the stadia that could constitute an essential facility for the purposes of UK and EU competition law.
FDC and Genius
On the other side, FDC and Genius claim that Sportradar has breached English law by arranging for their scouts to attend matches in the relevant leagues, where they collected and distributed LLMD for the purposes of supplying bookmakers with relevant data. By doing so, Sportradar had breached the rules for attendees at stadia and the conditions of the match tickets.
Notably, they argue that their agreement concerns the creation and use of a database right, with LLMD constituting a trade secret under the Trade Secrets (Enforcement) Regulations 2018. Sportradar’s actions breached FDC’s and Genius’ IP rights, that included such confidential information.
As relates to the competition claims, FDC and Genius argue that their agreement neither has an anti-competitive object or effect. The restrictions on Sportradar’s ability to collect LLMD occurs independently of their agreement due to the stadia rules and ticket conditions.
Likewise, they both assert that entering into the agreement does not constitute an abuse for the purposes of competition law, or if it is, that FDC’s conduct is objectively justified.
Potential practical implications
The outcome of these proceedings could have a material impact on the manner in which providers of SDB Services, sporting bodies, and bookmakers are able to monetise and exploit live data collected at stadia.
In particular, should the CAT find in favour of FDC and Genius, this will cement the ability of the de facto owners of live data to restrict access to downstream competitors or at least limit their ability to provide data to bookmakers.
The issue of dominance for the supply of LLMD will require a detailed review of the dynamics between sports betting and sports data, in particular as between the supply- and demand-side substitutability for bookmakers providing their services to downstream consumers.
Suppliers of SDB Services such as Sportradar can obtain LLMD by arranging for so-called “scouts” to watch live television or online streamed coverage of matches (known as “off-tube data”). However, Sportradar contends that use of such off-tube data for the purpose of supply to bookmakers is not an adequate substitute for data collected directly at the grounds. This is said to be the case because:
Not all matches in the relevant leagues are televised or streamed; and/or
Off-tube data has a time-lag between events occurring on the pitch and pictures of those events being broadcast on television or streamed online and a delay of even a few seconds in delivery of the data to bookmakers makes the product significantly less attractive.
As a result, the inclusion or exclusion of off-tube data in the market definition for LLMD will be important in addressing whether FDC’s and Genius’ behaviour is anticompetitive. Should the CAT consider that LLMD includes off-tube data, enabling it to supply bookmakers (albeit with less attractive data), leaves it with narrower grounds to contend that it is suffering from a breach of competition law.
The trial has been listed to commence on 4 October 2022 with a time estimate of 23 days. A decision would not be expected before 2023.