Broadcasting sporting events – certain shirt sponsorship may constitute prohibited advertising and expose the broadcaster to penalties

On 16 May 2018, French TV channel BeIN Sports broadcast the Europa League final between Olympique de Marseille and Atlético de Madrid at Lyon’s Groupama Stadium.

During this match, the shirt sponsor of the Madrid club was “Trade Plus 500”, a Cypriot online trading company.

On 25 June of the same year, the French Directorate-General for Competition, Consumer Affairs and Prevention of Fraud (“DGCCRF”) opened an investigation against the broadcaster, suspecting the existence of advertising prohibited by French law (in particular to article L.222-16-1 of the French Consumer Code, regarding the direct or indirect advertising by electronic means to non-professional customers for the provision of investment services relating to risky financial contracts, as defined in article L. 533-12-7 of the French Monetary and Financial Code.)

This investigation culminated in the decision of 30 November 2022, by which the DGCCRF inspector ordered BeIN Sports France to cease all broadcasting of advertising relating to the offending sponsor, reflected in a ban on broadcasting matches involving a club sporting this shirt sponsor. The inspector’s hierarchical superior confirmed this decision on 3 April 2023.

The broadcaster then lodged an application against this decision with the Administrative Court of Cergy-Pontoise.

On 13 July 2023, the court dismissed this application, ruling out all the arguments put forward by BeIN Sports France.

In support of this decision, the judge stated among other things, that it was clear from the documents in the file, and in particular from the opinion of the Financial Markets Authority (“AMF”) sent to the DGCCRF on 2 July 2018, that most of the offer by the Cypriot company “Plus500” must be regarded as falling within the category of highly risky financial contracts in light of the three criteria set out in Article L. 533-12-7 of the French Monetary and Financial Code, which Article L. 222-16-1 refers to and which are as follows:

• The maximum risk is not known at the time of underwriting;
• The risk of loss is greater than the amount of the initial financial contribution;
• The risk of loss in relation to the corresponding potential benefits is not reasonably comprehensible in view of the particular nature of the financial contract proposed.

In particular, the court rejected the broadcaster’s argument that the injunction issued by the DGCCRF was a disproportionate infringement of entrepreneurial freedom and property rights, and that it constituted too general and absolute a restriction on the European principle of freedom to provide services.

The judge emphasised that the injunction was sufficiently targeted (it only concerned Plus500) and that its impact was limited for the broadcaster: at present, only one Italian club (Atalanta Bergamo) and one Swiss club (Young Boys Bern) carry this sponsor, which represents very few matches to be broadcast and therefore a minor loss of revenue for BeIN Sports.

Above all, the prohibition on advertising to the lay public in favour of a company that markets highly speculative investment contracts is considered by the Court to pursue an overriding objective in the public interest relating to the protection of French consumers. It therefore constitutes a justified and proportionate infringement of the aforementioned fundamental freedoms.

Administrative Court of Cergy-Pontoise, 13 July 2023, no. 2306997