These days the World Trade Organization (WTO) is facing many challenges. To say that it has fallen out of favour with the Trump Administration would be an understatement. The US is currently actively working to undermine the dispute settlement process of the WTO by blocking new appointments to the organization’s Appellate Body, on the grounds that it does not like the fact that a number of WTO decisions have gone against the United States for its use of unilateral trade remedy actions against other WTO members (despite the fact that over the years the US has won far more WTO dispute cases than it has lost). In addition, since the launch of the Do’ha Round of multilateral trade negotiations in 2001, the members of the WTO have been unable to resolve significant differences between developed and developing countries over whether and how to bring new areas of trade and subsidies under WTO disciplines. As a result, the Do’ha Round has stalled, undermining the WTO’s credibility. To add to the WTO’s current woes, recently its Director-General, Roberto Azevedo, announced his early and unexpected retirement, further throwing the Organization into crisis.

Despite all these trials and tribulations, however, the WTO remains an essential component of the international trading system and continues to play a critical role in adjudicating international trade disputes. With the effective temporary demise of the WTO Appellate Body as a result of US actions blocking appointments of new members, a number of WTO members have agreed to bypass the statutory appeals process by establishing a contingency appeal arrangement whereby these members (the EU, Australia; Brazil; Canada; China; Chile; Colombia; Costa Rica; Guatemala; Hong Kong, China; Mexico; New Zealand; Norway; Singapore; Switzerland; and Uruguay) can continue to exercise their right to a review of WTO panel decisions by an appeal body when the disputes are among themselves. Moreover, the WTO continues to establish panels of experts on a case-by-case basis to adjudicate trade disputes between WTO members, and these cases are proceeding. It’s also worth noting that not all WTO panel decisions are appealed (over the years, the rate of appeal of panel decisions has varied between 40 and 100%).

So what does this history of the WTO dispute settlement process have to do with copyright issues? If you are a sports rights-holder (such as those who own the rights to the broadcast of major European soccer leagues) who has licensed content to the Qatar-based sports broadcaster BeIN Sports, and whose content has been openly pirated by the Saudi-based broadcaster BeoutQ, the answer is “everything”.

As I documented in a blog posting (Content Piracy as Hybrid Warfare) last year, the Saudi regime has been pirating BeIN’s signal as a form of non-traditional warfare against the Qatari government, which also happens to own the Al-Jazeera news network, a perennial thorn in the side of the Saudis. Despite pressure from the US through the US Trade Representative’s annual report on global intellectual property issues, which specifically called out the Saudis on this issue, a thin veil of deniability and obfuscation was maintained by Riyadh. Now, thanks in large part to the role of the WTO, this has been stripped away and the situation is changing.

BeIn Sports, unable even to hire legal counsel in Saudi Arabia to pursue its claims of piracy owing to Saudi obstruction, appealed to the Qatari government for help and Qatar filed a case against Saudi Arabia in the WTO, with a number of other WTO members (Australia, Bahrain, Brazil, Canada, China, EU, Japan, Norway, Russia, Singapore, Ukraine, the UAE and the US) joining and submitting briefs as interested third parties. Only WTO members, not companies, can bring WTO cases.  On June 16, a WTO panel found that Qatar had clearly established that the pirated BeoutQ network was operated by individuals within the criminal jurisdiction of Saudi Arabia and that the Kingdom had not only failed to take any action against them but had prevented a Qatari company (i.e. BeIN Sports) from exercising its rights to civil enforcement of its IP rights. The WTO carefully skirted the issue of exactly who was responsible for BeoutQ’s piracy but it is clear that the service is well connected to the Saudi political elite. While the panel partially upheld the Saudi argument of national security as a reason for preventing BeIN Sports from accessing legal counsel, a ruling trumpeted by Saudi media sources, the panel ruling confirmed there was a clear violation of WTO rules by Saudi Arabia.

The panel rejected the Saudi argument that it had no jurisdiction owing to Saudi Arabia’s invocation of the WTO national security exception based on the fact that it had severed diplomatic relations with Qatar. All of the third country interventions related to the Saudi national security argument, with almost all opposing this for one reason or another. Among the third party intervenors, only Bahrain and the UAE, who are allied with the Saudis against Qatar, and the United States, supported the Saudi’s national security argument. In the case of the US, it takes the position that national security is whatever a country defines it to be (self-judging), regardless of circumstances. The panel rejected this position and concluded by recommending that “Saudi Arabia bring its measures into conformity with its obligations under the TRIPS Agreement.” (TRIPS deals with intellectual property disputes under the WTO framework).

Saudi Arabia must now decide whether it will appeal the WTO panel finding, and given the current suspension of the Appellate Body’s proceedings, this could drag out for a considerable period of time. Ultimately the Saudis could refuse to adopt the panel’s decision, in which case Qatar could seek compensation through authorized trade retaliation. However, the situation is unlikely to come to this and while it will be loath to admit culpability, there are signs that Saudi Arabia is finally recognizing the need to deal with the sports broadcast piracy issue.

Certainly not coincidentally, on June 22 the Saudi Authority for Intellectual Property (SAIP) announced that it would be blocking 231 websites that violate the intellectual property law including a number that distribute Illicit Streaming Devices (ISDs), a prime means of facilitating sports content piracy. BeoutQ’s direct satellite broadcast service was shut down late last year, but continued to be available through ISDs via the internet. In addition, the President of the Saudi Arabia Football Federation has written to UEFA, European Football’s governing body, the English Premier League (EPL), international football federation FIFA and the International Olympic Committee acknowledging that Saudi Arabia has a responsibility to fight broadcast piracy and respect intellectual property rights.

This sudden conversion is linked not just to the unfavourable WTO decision but also to the desire of the Saudis through their sovereign wealth fund, whose Chairman is Crown Prince Mohammed bin Salman, to purchase a major EPL team, Newcastle United. The EPL’s broadcast deal with BeIN Sports was threatened by BeoutQ’s piracy, and EPL, UEFA and others had tried unsuccessfully to bring suit in Saudi courts. For its part, BeIN Sports had lobbied the EPL to block the Saudi purchase of the English team. The Newcastle ownership bid, which must be approved by the EPL, is certainly not unrelated to the apparent change of course, but there is no doubt that pressure from the WTO decision (first unofficially released in May) is an important factor.

While shutting down BeoutQ will not end the standoff and the ongoing sniping between the Saudi and Qatari regimes, the broader Saudi interest in establishing itself as a major investor in premier sports leagues, combined with the pressure of an unfavourable WTO panel finding (and bilateral pressure from the US and EU) will hopefully lead to an end to widespread, state-tolerated if not state-sponsored content piracy in the Middle East. The WTO demonstrated its value by playing an important part in bringing trade, moral and legal pressure on the Saudi authorities to change their behaviour. This is precisely why a robust and effective rules-based WTO dispute settlement process is still very much needed to help the world navigate and resolve international trade issues.

This article was originally published in Hugh Stephens Blog.