Because you dont get given yellow cards for over-exaggeration of contact
Right or wrong morally, going by the rules the referee handled it the way he had too
I respect your opinion but honestly i dont agree, worst that the red card given to Pepe ( i repeat that i dont like him too and he shouldnt do that kind of things) was the provocative reaction by Muller without yellow card, that has nothing to do with the standards of a professional player, this has to be for both sides, Pepe isnt satan and Muller an angel, if u get my point, sorry for my bad english.
