CJEU: Ending FIFA Transfers Penalty Rule

Nov 8, 2024 Benn-Ibler Rechtsanwälte

Some of FIFA’s rules on international transfers of professional footballers are in breach of EU law. This was recently decided by the European Court of Justice (CJEU), as the rules are an unnecessary restriction on the free movement of players and competition between clubs.

In 2013, a former French professional footballer had signed a contract with a football club which he unilaterally terminated after one year in order to play for a different club. The transfer did not happen, however, because the new club was threatened with heavy sanctions based on FIFA rules where the new clubs are jointly liable in the event of a player’s breach of contract should the player leave the club. The French professional then took FIFA to the Belgian national court, claiming that the transfer rules made it impossible for him to switch clubs.

The national court referred the matter to the CJEU for a preliminary ruling on whether FIFA’s transfer rules violate the fundamental freedom of movement of workers and competition law.

The CJEU has now decided that the rules are likely to hinder the free movement of professional footballers who wish to develop their careers by playing for a new club based in another EU Member State. Those provisions expose players and clubs to significant legal, unforeseeable, and potentially very high financial risks as well as major sporting risks which, taken together, are likely to impede the international transfer of players. However, the CJEU also stressed that restricting free movement could be justified by the legitimate objective of ensuring that football matches run smoothly and guaranteeing a certain stability in the player rosters.

The CJEU is particularly critical of the blanket rule that a club is jointly and severally liable with a player who may have breached their contract. This is because such a rule does not take into account individual cases. On the whole, however, the CJEU concluded that the transfer rules have a serious impact on players’ careers.

In the context of competition law, the Court’s decision found that the rules restrict competition in the sense that they regulate the distribution of employees among employers, thus cloistering the markets.

CJEU Press Release No 172/24 (4 October 2024)