Is antitrust changing the world of football?

Last week, the Court of Justice of the European Union (ECJ) ruled in a football case that has the potential to bring massive changes in the international football market. Some even compare the case with the famous Bosman judgement of the ECJ from 1995. Similar to Bosman, the case concerns international transfer rules of professional footballers. Spoiler: Some of the current rules breach EU law, but this is not the first time an antitrust infringement is found in the world of football.

The Fédération Internationale de Football Association (FIFA) is the international governing body of football and therefore known by almost everyone – whether one is a football enthusiast or not. FIFA currently consists of 209 members, therefore, has an impact on a worldwide level by inter alia acting as a legislator in all kinds of football activities.

FIFA´s transfer rules – some background on the case

Football cases tend to come in Belgian courts, so in 2022, a Belgian court asked the ECJ for its opinion on FIFA player transfer rules, contained in the FIFA “Regulations on the Status and Transfer of Players”. The rules are not only applied by FIFA, but by its members, the national football associations. In the case at hand, a former professional player claimed that some of the rules led to him not being hired by a Belgian football club.

The player signed a four-year contract with a Russian football club in 2013. The contract was then terminated by the player – according to the club – without “just cause” prior to the regular end of the contract. According to the FIFA rules, this does not only make the player and a potential new club that wants to hire the player liable for compensation to the former club. Moreover, the hiring club can be subject to sporting sanctions and the national association to which the former club belongs must refuse to issue an “International Transfer Certificate” while a dispute between the player and the former club regarding the termination is pending.

FIFA standing offside

As regards antitrust law, the ECJ stated that “the rules at issue have as their object the restriction, and even prevention, of cross-border competition”. The court pointed out that in the football sector it is integral to recruit players in order to compete. Therefore, rules restricting the recruitment of players by severely limiting their ability to move between clubs are comparable to no-poach agreements, restrict competition between clubs and are therefore prohibited by Art. 101 (1) TFEU.

The reference to no-poach agreements makes you prick up your ears: Antitrust in labour markets is currently a hot topic with most regulators. Also, earlier this year, the European Commission published a policy brief stating that no-poach agreements generally qualify as anti-competitive restrictions by object, comparable to buyer cartels (if you want to read more about antitrust in labour markets, see here and here).

Football and no-poach: Not a new encounter

The ECJ is not the first to draw a connection between football and no-poach agreements. In 2022, the Portuguese Competition Authority – Autoridade da Concorrência (AdC) –  imposed a fine of approx. EUR 11.3 million in total on 31 football clubs from Portugal´s top two football divisions and the national football league. This decision was a first for the AdC, having never before sanctioned an anti-competitive practice in the labour market. The conduct included no-poach agreements during the Covid-19 pandemic, which prevented the recruitment of players by first and second league clubs who unilaterally terminated their contract invoking issues caused by the pandemic.

Also outside of the EU, more specifically in Mexico, 17 football clubs of the Liga MX, the Mexican Football Federation and 8 natural persons were found guilty of imposing salary caps and restricting players labour mobility, preventing them from negotiating and signing with other teams. The clubs established a mechanism that prevented male players from freely negotiating and signing with other teams, therefore segmenting the market of male football players. The Federal Economic Competition Commission fined a total of Mexican pesos 177.6 million (approx. EUR 7.6 million) for these no-poach (and wage-fixing) agreements in 2021.

Final thoughts

The fast pace, internationality and, last but not least, the popularity of football make it a special sector with an unusual labour market. This has not gone unnoticed by the regulators and courts, which have begun to monitor player transfer options more closely in recent years. Even though the ECJ “only” drew a comparison to no-poach agreements, the message of both courts and regulators is clear: Football (and) labour markets are in focus.

So, although antitrust is probably not changing the entire world of football, it remains to be seen how exactly the judgment on the FIFA regulations will affect the practice. As David Terrier, president of FIFPRO Europe (a trade union representing professional footballers), said: “This is an important judgement, which – without a doubt – revolutionises football governance in Europe and more particularly the regulation of the labour market.”.

Picture by Rick Barret on Unsplash