Competition Law in Esports Sponsorship Concentration — China

1. Introduction

Esports sponsorship concentration refers to a situation where a small number of companies obtain a very large share of sponsorship opportunities, commercial rights, advertising inventory, team sponsorships, league sponsorships, or exclusive commercial partnerships in the Chinese esports ecosystem.

For example:

One major platform obtains exclusive sponsorship rights for most leading esports leagues and teams, while simultaneously controlling broadcasting, ticketing, advertising inventory, player exposure, or tournament promotion.

This can create competition-law concerns if the concentration allows the undertaking to:

exclude competing sponsors;

prevent rival platforms from accessing esports audiences;

impose exclusive sponsorship conditions;

bundle sponsorship with broadcasting or platform services;

discriminate between sponsors;

acquire competing commercial rights;

foreclose advertising or media competitors.

However, high sponsorship concentration by itself is not necessarily unlawful.

Chinese competition law asks whether the concentration produces or strengthens market power and whether that power is subsequently used to eliminate or restrict competition.

2. Basic Legal Formula

Relevant Market → Market Power → Sponsorship Concentration → Restrictive Conduct → Foreclosure → Competitive Harm → Justification → Liability

The most important questions are:

What is the relevant esports market?

Does the sponsor/platform have a dominant position?

Are sponsorship rights exclusive?

How much sponsorship inventory is foreclosed?

Are rival sponsors realistically able to compete?

Is the exclusivity commercially justified?

Does the conduct eliminate or restrict competition?

3. What Is Esports Sponsorship?

Esports sponsorship can include:

team sponsorship;

league sponsorship;

tournament sponsorship;

player sponsorship;

venue sponsorship;

streaming sponsorship;

jersey/logo rights;

naming rights;

advertising rights;

digital-content sponsorship;

social-media promotional rights;

in-game advertising;

livestream advertising;

merchandise rights.

The market can therefore be considerably more complicated than ordinary advertising.

4. Relevant Market

A competition authority would first determine the relevant market.

Possible markets include:

A. General sports sponsorship

Esports sponsorship could potentially compete with:

football;

basketball;

tennis;

traditional sports advertising.

B. Esports sponsorship

A narrower market could include sponsorship of:

esports leagues;

teams;

tournaments;

players.

C. Game-specific sponsorship

For example:

sponsorship connected specifically with a particular competitive game.

D. Premium esports sponsorship

A further distinction might exist between:

major national tournaments;

lower-tier tournaments;

amateur esports.

The correct market depends on substitutability and commercial demand.

5. Why Market Definition Is Difficult

Esports has unique characteristics:

young audiences;

digital engagement;

livestream interaction;

game-specific communities;

global audiences;

strong platform effects;

influencer/player effects.

A beverage company may consider:

esports sponsorship

a substitute for:

traditional sports sponsorship.

But another advertiser may specifically need access to a particular esports community.

Therefore, market definition must be based on evidence rather than assumptions.

6. Sponsorship Concentration Does Not Automatically Mean Monopoly

Suppose Company A obtains:

60% of esports sponsorship expenditure.

That does not automatically establish a violation.

The authority should investigate:

alternative leagues;

alternative teams;

other advertising channels;

competing sponsorship packages;

bargaining power of teams;

bargaining power of advertisers;

duration of sponsorship;

exclusivity;

switching costs;

entry barriers.

Important distinction

Concentration ≠ Dominance ≠ Abuse

These are separate legal questions.

7. Exclusive Sponsorship

The first major competition issue is exclusive sponsorship.

Example:

Company A sponsors an esports league and requires that no competing beverage company can sponsor any participating team.

This can be more restrictive than:

Company A receives exclusive naming rights for the league.

The scope of exclusivity matters.

8. Category Exclusivity

A common commercial arrangement is:

“Company A is the exclusive smartphone sponsor.”

This prevents competing smartphone manufacturers from sponsoring the same tournament.

Category exclusivity can be legitimate because it creates commercial value for the sponsor.

However, if one dominant platform obtains almost every important esports sponsorship opportunity in a product category, cumulative foreclosure may become important.

9. Cumulative Exclusivity

This is particularly important.

Imagine:

Tournament A → Company X exclusive

Tournament B → Company X exclusive

Tournament C → Company X exclusive

Team A → Company X exclusive

Team B → Company X exclusive

Team C → Company X exclusive

Each contract individually might appear reasonable.

Together, however:

95% of premium esports sponsorship inventory becomes unavailable to competitors.

The competition analysis should therefore examine the combined foreclosure effect.

10. Sponsorship and Broadcasting

Esports sponsorship often overlaps with media rights.

A platform might control:

Tournament Organization + Broadcasting + Sponsorship + Advertising

This creates a potentially powerful vertical structure.

For example:

Platform A obtains exclusive tournament broadcasting rights and simultaneously requires sponsors to purchase advertising only through Platform A.

The platform may then leverage broadcasting power into advertising.

11. Bundling Sponsorship and Media Rights

Suppose a tournament organizer says:

“A company can sponsor the tournament only if it purchases our exclusive livestream advertising package.”

This could potentially constitute tying or bundling.

The analysis becomes:

Dominant Product → Separate Product → Conditioning → Foreclosure → Competitive Harm

The products might be:

sponsorship rights; and

media advertising.

Whether they are genuinely separate products depends on commercial evidence.

12. Self-Preferencing

A large esports platform may operate:

tournament leagues;

streaming services;

advertising exchanges;

esports teams;

sponsorship marketplaces.

It might give its own sponsors:

better advertising positions;

lower fees;

preferential livestream placement;

exclusive player access;

better audience data.

Competitors may receive inferior treatment.

Where market power exists, this may raise self-preferencing or discriminatory-treatment concerns.

13. Refusal to Deal

A dominant esports platform could refuse to allow competing sponsors to access important tournaments or advertising inventory.

For example:

A platform controls almost all premium esports broadcasts and refuses to sell sponsorship advertising to a competing digital platform.

The competition analysis may consider:

necessity;

alternative opportunities;

market power;

commercial justification;

foreclosure effects.

14. Sponsorship Data

Esports platforms collect valuable information about:

viewers;

engagement;

age groups;

geographic locations;

viewing time;

purchasing behaviour;

player interaction;

advertising conversion.

A dominant platform could potentially use sponsorship data to give its own advertising business a competitive advantage.

This may create a combination of:

Sponsorship Power + Data Power + Platform Power

15. Network Effects

Esports sponsorship has strong network effects.

More viewers

↓

More sponsors

↓

More prize money

↓

Better players/teams

↓

More viewers

This creates a self-reinforcing cycle.

A dominant tournament platform can therefore become increasingly attractive to sponsors while competing tournaments struggle to obtain funding.

16. Winner-Take-Most Effects

Esports markets can develop winner-take-most characteristics.

A leading tournament obtains:

better teams;

higher viewership;

larger sponsors;

more advertising;

better broadcasting;

more prize money.

This can make entry difficult.

Competition law therefore needs to distinguish:

success achieved through superior competition

from

success maintained through exclusionary conduct.

17. Vertical Restrictions

Esports sponsorship may involve multiple levels:

Game Publisher

↓

Tournament Organizer

↓

League

↓

Team

↓

Player

↓

Sponsor

Restrictions at one level can affect another.

For example:

A tournament organizer prohibits teams from accepting sponsorship from companies competing with the organizer's own commercial partner.

The legal characterization may depend on the parties' market positions and the effect of the restriction.

18. Horizontal Coordination Between Sponsors

A more serious issue occurs if competing sponsors coordinate.

For example:

Five competing gaming-hardware companies agree that none will sponsor a particular esports tournament unless the sponsorship price falls below RMB X million.

This could raise a horizontal monopoly-agreement issue.

Similarly, sponsors could agree to:

divide esports teams;

divide tournaments;

fix sponsorship prices;

boycott an organizer;

restrict advertising expenditure.

19. Industry Associations

Esports associations and industry organizations must also be careful.

They should not become mechanisms for coordinating:

sponsorship prices;

advertising rates;

sponsor allocation;

tournament access;

team participation;

customer allocation.

An industry association can facilitate competition-law violations even where the actual commercial contracts are between individual businesses.

20. Mergers and Acquisitions

Sponsorship concentration may also result from mergers or acquisitions.

Example:

Company A acquires Company B, which owns major esports sponsorship rights.

The transaction may combine:

tournament rights;

broadcasting rights;

advertising;

sponsorship inventory;

team ownership.

If applicable thresholds are met, China's merger-control rules may require review.

The authority may examine whether the transaction substantially restricts competition.

21. Exclusive Rights Are Not Automatically Illegal

This is particularly important in light of Chinese judicial authority concerning sports commercial rights.

In TiYu (Beijing) Culture Media v. CSL and Shanghai Yingmai, the Supreme People's Court considered exclusive commercial rights concerning professional sports-event images.

The Court held that the exclusivity inherent in a legally held commercial right is not, by itself, an abuse of dominance. The exclusive authorization had been obtained through public competitive bidding and had a legitimate legal basis. (IPC Court)

This principle is highly relevant to esports.

An esports organizer may legitimately grant:

exclusive tournament sponsorship rights

through a competitive process.

The competition-law problem arises if the exclusive right is improperly exercised to eliminate or restrict competition.

22. Important Chinese Case Laws

There are currently very few reported Chinese judgments specifically deciding “esports sponsorship concentration.” Therefore, the following cases are important analogical authorities concerning sports commercial exclusivity, dominance, foreclosure, digital platforms and monopoly agreements.

Case 1 — CSL Sports-Event Image Exclusive Authorization Case

Supreme People's Court, (2021) Zui Gao Fa Zhi Min Zhong No. 1790

This is the most directly relevant authority.

A company challenged the exclusive authorization of commercial image rights for the Chinese Super League.

The Supreme People's Court held that the exclusive nature of a legally held sports-event commercial right is not itself prohibited by competition law.

The exclusive authorization resulted from public tendering, meaning the exclusivity was itself the outcome of competition.

Relevance to esports

Suppose an esports league conducts a genuine competitive tender:

Sponsor A vs Sponsor B vs Sponsor C

and Sponsor A wins exclusive tournament sponsorship rights.

The resulting exclusivity is not automatically an abuse of dominance.

Key principle

Lawfully created exclusivity is different from unlawful abuse of exclusivity.

23. Case 2 — Qihoo 360 v Tencent

Supreme People's Court, 2014

This is a foundational Chinese dominance case involving digital-platform markets.

The Court emphasized careful analysis of:

relevant market;

market share;

competitive constraints;

network effects;

actual market power.

Esports relevance

An esports platform with millions of viewers cannot simply be declared dominant based solely on user numbers.

The court must identify:

What market is actually being analysed?

For example:

esports sponsorship;

esports streaming;

esports advertising;

game-specific advertising.

Key principle

Market definition precedes meaningful dominance analysis.

24. Case 3 — WeChat/Platform-Type Digital Competition Principles

Chinese platform competition jurisprudence increasingly recognizes that digital markets can involve:

network effects;

data advantages;

technological barriers;

ecosystem effects.

The Qihoo 360 v Tencent line of authority is particularly relevant because esports platforms can have similar multi-sided structures.

Relevance

An esports platform may simultaneously serve:

players;

viewers;

sponsors;

advertisers;

teams;

tournament organizers.

Market power therefore cannot necessarily be measured using a single traditional market-share number.

25. Case 4 — Weihai Water Services Abuse-of-Dominance Case

Supreme People's Court, (2022) Zui Gao Fa Zhi Min Zhong No. 395

The Supreme People's Court explained that a dominant undertaking's limited or indirect recommendation of a particular trading partner can amount to a form of restricted dealing where customers are effectively unable to choose alternatives. (Supreme Court of China)

Esports relevance

Imagine a dominant esports platform tells sponsors:

“You can sponsor our tournaments only through our preferred advertising agency.”

Even without an express prohibition, if the structure effectively prevents sponsors from choosing competing agencies, a restricted-dealing analysis may become relevant.

Key principle

Restricted dealing can be explicit or indirect.

26. Case 5 — Maoming Concrete Enterprises

Supreme People's Court, (2022) Zui Gao Fa Zhi Xing Zhong No. 29

This case concerned horizontal coordination and “other concerted conduct.”

The Court examined:

consistency of conduct;

communications;

competitive relationships;

absence of a reasonable independent explanation.

Esports relevance

Suppose competing esports sponsors communicate privately and agree:

“We will not sponsor Team A so that Team B's sponsor can obtain exclusive exposure.”

Or:

“None of us will pay more than RMB 5 million.”

Such coordination can raise horizontal antitrust concerns.

Key principle

Anti-competitive coordination can be established through conduct and communications, not merely formal written contracts.

27. Case 6 — Cement Association Case

Supreme People's Court, (2024) Zui Gao Fa Zhi Xing Zhong No. 148

An industry association facilitated coordinated conduct among competing cement enterprises.

Esports relevance

An esports association should not coordinate competing sponsors regarding:

sponsorship prices;

tournament allocation;

sponsor territories;

advertising prices;

boycotts;

customer allocation.

Key principle

An association cannot safely be used as a vehicle for competitor coordination.

28. Case 7 — Camphor API Monopoly Agreement Case

Supreme People's Court, (2023) Zui Gao Fa Zhi Xing Zhong No. 30

The case involved communications among competing enterprises concerning prices and quotations.

Esports relevance

Comparable communications among competing sponsors or competing sponsorship agencies concerning:

sponsorship prices;

future bidding;

tournament allocation;

team allocation;

advertising rates

could provide evidence of concerted conduct.

Key principle

Commercially sensitive competitor communications can become important evidence of a monopoly agreement.

29. Case 8 — General Motors Vertical Monopoly Agreement

Supreme People's Court, (2020) Zui Gao Fa Zhi Min Zhong No. 1137

This case provides guidance concerning vertical restrictions.

Esports relevance

A tournament organizer could impose restrictions on:

sponsors;

distributors;

advertising agencies;

streaming partners.

Whether such restrictions are lawful depends on the applicable vertical competition rules and their competitive effects.

Key principle

A contractual restriction must be analysed according to its competitive substance rather than merely its contractual form.

30. Case 9 — DOTA2 / Douyu Esports Live-Broadcast Dispute

Shanghai Intellectual Property Court

This case involved unauthorized live broadcasting of the DOTA2 Asian Invitational Tournament.

The Shanghai court recognized the commercial significance of exclusive event broadcasting rights and held that unauthorized real-time broadcasting could constitute unfair competition.

Competition-law relevance

This is not an antitrust dominance case, but it demonstrates an important esports principle:

Exclusive esports commercial rights can have genuine economic value and can be legally protected.

That matters when assessing whether an exclusive sponsorship or commercial-rights arrangement represents legitimate exploitation of an event right rather than anticompetitive conduct.

31. Case-Law Summary

32. Hypothetical Example

Assume Platform X controls the largest Chinese esports league ecosystem.

It has:

70% of premium esports viewership;

the largest tournament;

several leading teams;

the principal streaming platform.

Platform X then obtains exclusive sponsorship agreements covering:

90% of major tournament inventory;

80% of leading teams;

85% of premium esports livestream advertising.

It also tells sponsors:

“Companies sponsoring rival esports leagues will not be permitted to advertise on our platform.”

Competition analysis

Step 1 — Relevant market

Premium esports sponsorship and/or esports advertising.

↓

Step 2 — Dominance

High market share + network effects + audience concentration.

↓

Step 3 — Exclusive contracts

Extensive sponsorship exclusivity.

↓

Step 4 — Cumulative foreclosure

Competitors cannot access enough premium sponsorship inventory.

↓

Step 5 — Additional restriction

Sponsors supporting rival tournaments are excluded.

↓

Step 6 — Competitive effect

Rival leagues lose sponsorship revenue.

↓

Step 7 — Justification

Platform argues exclusivity protects sponsor value.

↓

Step 8 — Proportionality

Does the protection require 90% market foreclosure?

↓

Step 9 — AML analysis

Potential abuse of dominance, depending on the precise market and statutory elements.

33. Cumulative Sponsorship Concentration

This is perhaps the most important issue.

Consider:

The competition authority should not necessarily examine every contract separately.

The combined effect may be:

Competitors have no commercially meaningful route to premium esports audiences.

That can be more significant than any single sponsorship contract.

34. Sponsorship Agency Concentration

Concentration can also occur at the intermediary level.

For example:

100 esports teams

↓

5 sponsorship agencies

↓

2 agencies control 85% of sponsorship contracts

If the agencies coordinate prices or allocate teams among themselves, horizontal antitrust concerns may arise.

35. Exclusive Sponsorship and Consumer Choice

Competition law ultimately protects the competitive process.

If exclusivity produces:

better funding;

better tournaments;

lower sponsorship costs;

innovation;

improved viewer experience;

it may have legitimate efficiency effects.

But if exclusivity results in:

fewer sponsors;

higher advertising prices;

reduced team funding;

lower innovation;

exclusion of rival tournaments;

the competitive harm becomes more significant.

36. Legitimate Business Justifications

Esports organizers may legitimately claim that exclusivity:

1. Protects sponsor investment

A sponsor may pay a premium only for exclusivity.

2. Prevents brand confusion

Competing brands may create conflicts.

3. Improves event financing

Guaranteed sponsorship can make tournament organization possible.

4. Protects commercial rights

Exclusive rights may be part of the organizer's legitimate property or contractual rights.

5. Improves production quality

Long-term sponsorship can finance better broadcasts and events.

6. Creates incentives for investment

Sponsors may invest more when competitors are excluded.

The critical question is whether the restriction is proportionate and genuinely connected to these objectives.

37. When Sponsorship Concentration Becomes More Dangerous

Risk increases where there is:

high market share;

long-term exclusivity;

cumulative exclusivity;

multiple connected markets;

strong network effects;

high switching costs;

control over broadcasting;

control over tournament organization;

control over teams;

control over advertising;

refusal to provide access;

discriminatory treatment;

exclusion of rival sponsors;

anti-competitive communications.

38. Practical Compliance Checklist

For Esports Organizers

Define the relevant commercial market.

Assess market power.

Limit unnecessary exclusivity.

Review cumulative exclusivity.

Avoid unjustified sponsor discrimination.

Use transparent tender procedures.

Document legitimate commercial reasons.

Avoid tying sponsorship to unrelated services.

Monitor agreements across leagues and teams.

Obtain competition-law review for long-term exclusive arrangements.

For Sponsors

Examine exclusivity duration.

Determine what competing opportunities are prohibited.

Check whether exclusivity is category-specific or market-wide.

Review termination rights.

Avoid coordination with competing sponsors.

Do not exchange future sponsorship prices with competitors.

For Platforms

Separate sponsorship from unrelated platform services.

Avoid self-preferencing where market power is substantial.

Maintain fair access policies.

Review data use.

Monitor exclusive advertising arrangements.

39. Short Exam Answer

Esports sponsorship concentration in China refers to the situation where a small number of enterprises control a substantial proportion of esports sponsorship, advertising, tournament, team or commercial rights.

High concentration is not automatically unlawful. Chinese competition law requires examination of the relevant market, market power, exclusivity, foreclosure, competitive effects and legitimate business justification.

The most important directly analogous authority is the CSL sports-event image exclusive authorization case, Supreme People's Court (2021) Zui Gao Fa Zhi Min Zhong No. 1790. The Court held that lawful exclusivity inherent in a sports commercial right is not itself an abuse of dominance, particularly where exclusive rights are awarded through genuine competitive tendering. (IPC Court)

Other useful authorities include Qihoo 360 v Tencent, Weihai Water Services, Maoming Concrete, Cement Association, Camphor API, General Motors and the DOTA2/Douyu dispute.

Formula

Relevant Market → Market Power → Sponsorship Exclusivity → Cumulative Foreclosure → Competitive Effects → Justification → Liability

40. Conclusion

The central Chinese competition-law issue is not whether esports sponsorship is concentrated, but how that concentration is created and exercised.

A tournament organizer can legitimately grant exclusive sponsorship rights, particularly where those rights arise from lawful commercial ownership and are awarded through a competitive process. The Chinese Supreme People's Court's sports-event exclusivity case strongly supports this distinction. (IPC Court)

However, competition concerns become stronger where a dominant esports platform combines:

Tournament Control + Broadcasting Control + Team Control + Sponsorship Exclusivity + Advertising Control + Platform Data

and uses that combination to prevent competing sponsors, rival tournaments or competing platforms from obtaining meaningful market access.

Therefore, the key legal distinction is:

Commercial exclusivity that results from legitimate competition is different from exclusionary exclusivity used to suppress competition.

In esports, the most important factors are market definition, network effects, cumulative exclusivity, duration, access to premium audiences, vertical integration, sponsor switching opportunities, broadcasting rights and objective commercial justification.