Game-changing regulations are shaking up the world of football agents. With FIFA’s recently approved Football Agent Regulations set to take full effect on 1 October 2023, players, clubs, and agents are bracing themselves for a new era of oversight and transparency. FIFA’s interests and those of the agents seem to be at odds. With first court decisions on the table, maybe antitrust can take on the role of a referee in this case?
Already back in 2020, FIFA announced its reform proposals concerning football agents with the aim “to protect the integrity of football and prevent abuses”. The association had observed certain abusive and excessive practices, claiming that agents had earned more than USD 650 million in fees in 2019, four times more than in 2015. So, FIFA saw a need to “improve transparency, protect player welfare, enhance contractual stability and also raise professional and ethical standards”.
After years of consultation with the relevant stakeholders, FIFA approved new Football Agent Regulations (FAR) at the end of 2022, set to take full effect on 1 October 2023. Already during the consultation process, agents and various associations raised antitrust concerns and recently started to bring their cases to regulators and courts across Europe. With first court decisions slowly coming in, it is time to explain what the disputes are about and where things currently stand.
New rules for agents
At first glance, the objectives of the FAR seem to be rather uncontroversial. More transparency and better ethical standards should be something various and different stakeholders, such as clubs, players and even agents, can agree on. But to reach those goals, the FAR foresee at least three new elements which immediately caught the attention of various groups:
- Different from the old system, the FAR will require agents to pass an agent exam, a multiple-choice test prepared by FIFA testing knowledge of current football regulations (does not sound complicated, right? Apparently almost half of the candidates that took the test in April failed.)
- Agents will only be able to represent one party to a transaction, i.e., they can either act for the old or the new club or the player.
- The most serious changes are those relating to the fees of the agents. Whilst it used to be common for an agent to take a certain percentage of the contract value, there was no cap. Under the FAR, the agent’s fees will be limited to a certain percentage of the contract value and the percentage will depend on who the agent represents.
Learning from the past
FIFA and its agent regulations are no strangers to European case law: Piau vs. Commission goes back to a complaint to the European Commission by Mr Piau, arguing that FIFA’s agent regulations at the time were in breach of antitrust law. After FIFA amended its regulations, the Commission ended its investigation, yet Mr Piau appealed to the EU’s General Court. The amended rules still required agents to pass an exam and determined that contracts between agents and players should contain a clause on the agent’s fees. The rules only stipulated, however, that if there is no explicit agreement regarding the amount of the fees between the parties, the fees shall be 5% of the player’s salary.
There is a lot to learn from the court decision: The court found that Art. 101 and 102 TFEU are generally applicable. FIFA as an international association of national associations of football clubs was itself an association of undertakings. FIFA’s regulations were therefore a “decision of association of undertakings” in the sense of Art. 101 TFEU (the cartel prohibition). The Court further found that FIFA represented the clubs on the market of services where players and clubs act as buyers and agents as sellers, and that FIFA had a dominant position on that market.
On substance, the court found no breach of antitrust rules mainly because the agent exam requirement was found to ensure objectivity and transparency and the provision regarding fees did not constitute some sort of price-fixing. As to Art. 102 TFEU (abuse of dominance), the Court argued that qualitative requirements for becoming an agent without limiting the overall number of agents did not constitute an abuse.
Another case to keep in mind (as already mentioned here) is Meca Medina, where the European Court of Justice held that rules that are inherent to a legitimate object are not in in the scope of competition law. Under this standard, FIFA could try to argue that capping fees is essential to reach the goals of the FAR which, in the first place, must be legitimate. It looks like it could be decisive whether an agent fee cap is inherently necessary to the goal of protecting players and raising ethical standards.
The best defense is a good offense
Back to today: Stating that agents were not amused by the introduction of the FAR would be a slight understatement. Rafaela Pimenta, one of the most prominent voices in the current agent world, even went a step further saying that the “regulations are an example of totalitarianism”.
As an executive member of the Football Forum, an association of football players and agents, she also plays a role in a complaint filed to the Commission (as reported here). The agents seem to argue that the FAR will restrict competition by fixing purchasing prices and abusing its dominant position by imposing unfair trading conditions. A similar complaint has apparently been filed in Switzerland.
There has also been quite a bit of litigation already. The details of ongoing cases are difficult to grasp, but here is where things seem to stand:
- In April, the Regional Court of Mainz referred a case to the European Court of Justice, seeking clarification on whether the FAR are in compliance with Art. 101 and Art. 102 TFEU.
- At the same time, two groups of football agents were unsuccessful in their attempt to put an injunction on the FAR for antitrust reasons in a Dutch court, as the court said that it will be bound by the decision of the European Court of Justice.
- In contrast, only this week the District Court of Dortmund issued an injunction against the FAR being implemented by the DFB as they contain anti-competitive elements.
- Commenting the decision of the Dortmund court, FIFA confirmed that the FAR were currently being assessed by the CAS with a ruling expected by the end of July.
Overall, FIFA seems to rely on the argument that the football transfer system is not comparable to a normal market and as the sport’s governing body, it has the responsibility to regulate this system. It will be interesting to see how the Commission and Courts will perceive this argument in the next round of disputes.
Picture from Bruno Aguirre on Unsplash
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