CJEU rule that some FIFA international transfer rules for profressional footballers are contrary to competition law

Following a request for a preliminary ruling from the Cour d'appel de Mons (Belgium) Today the Court of Justice of the European Union have ruled in Case C-650/22 FIFA, that some of their international transfer rules hinder the free movement of players and competition between clubs.

A former professional footballer living in France, challenged FIFA's "Regulations on the Status and Transfer of Players" rules in the Belgian courts, arguing that they hindered his ability to be employed by a Belgian football club.

The rules at issue

The rules were applied by both FIFA and the national football associations that are members of FIFA. They require that a player that has terminated his contract early and without "just cause" together with any club hoping to employ him, are joint and severally liable for any compensation due to the former club. In the present case, that sum was €10.5 million. In certain circumstances, the new club can even be subject to a sporting sanction - a ban on registering any new players for a given period. Finally, the national association to which the player’s former club belongs must refuse to issue an International Transfer Certificate to the association where the new club is registered as long as a dispute between the former club and the player concerning the termination of the contract is pending.

Findings of the CJEU

The rules impede the free movement of professional footballers by imposing considerable legal risks, and unforeseeable and potentially very high financial risks, and as such impede the international transfer of players.

More interestingly, at least for this blog, the Court found that the rules at issue amount to a by object infringement of Article 101 TFEU (which prohibits anti-competitive agreements), that where neither necessary or indispensable. The recruitment of players is a key feature of competitive sport, and "one of the main parameters through which clubs can compete" (Opinion of the AG). By "immutably fixing the distribution of workers between the employers and in cloistering the markets" the rules were considered to be similar to no-poach agreements, a current area of focus for the European Commission.

Whilst we wait for the full judgment to be published, we can turn to the Opinion of the Advocate General, which was published on 30 April 2024 for more detail:

The contested provisions are designed in such a way as to have a deterrent effect and send a chill down each player’s spine. The same applies with respect to clubs potentially interested in luring players into new opportunities while the latter are in a running contract. The ‘price tag’ for such an operation would be extremely high.

Thus, by their very nature, the contested provisions limit the possibility for players to switch clubs and, conversely, for (new) clubs to hire players, in a situation where a player has terminated his or her contract without just cause. As expressly recognised by the Court, the recruitment of talented players constitutes ‘one of the essential parameters of the competition in which football clubs may engage’, making players the most important ‘factor of production’ for clubs.

In so doing, the contested provisions, by limiting clubs’ ability to recruit players, necessarily affect competition between clubs on the market for the acquisition of professional players.

This led the AG to conclude that the rules were by-object restrictions, precluding the need to conduct an assessment of their effect.

FIFAPro immediately issued a statement stating that it believes that the decision will have a significant impact:

The European Court of Justice has ruled that a central part of the FIFA transfer system, in place since 2001...which will change the landscape of professional football.