Football's transfer market under threat after court finds Fifa’s rules go against European Union law

4 October 2024, 14:23

Football’s current transfer market faces significant uncertainty after a court found some of Fifa’s rules to be contrary to the European Union’s laws.

The European Court of Justice decided some of the rules imposed by the global governing body restrict freedom of movement and are anti-competitive.

This has resulted from a challenge by former Arsenal and Chelsea midfielder Lassana Diarra in a long-running legal battle with Fifa over the termination of his contract with Russian club Lokomotiv Moscow in 2014.

The decision could "change the landscape of professional football", according to the world players' union FIFPRO.

The players' body said in a statement posted on social media: "The European Court of Justice has ruled that a central part of the Fifa transfer system, in place since 2001, constitutes a restriction of competition by object and a violation of the free movement of workers.

"The ECJ has just handed down a major ruling on the regulation of the labour market in football....which will change the landscape of professional football."

Meanwhile, Fifa has played down the significance of the ruling, saying it only puts in question the wording of two paragraphs within two articles of the overall rules governing player registrations and transfers.

Diarra has been mired in a series of legal battles since his contract with Lokomotiv Moscow was terminated by the club in 2014.

Following a dispute with manager Leonid Kuchuk, Lokomotiv alleged Diarra refused to appear at training or accept a lower salary, and dismissed him three years before his deal was due to expire.

In 2016 a Fifa ruling - backed up by the Court of Arbitration for Sport - found Diarra liable for breach of contract, ordering him to pay €10m (£8.4m) to Lokomotiv and suspending him from professional football for 15 months.

When Diarra subsequently agreed a deal to join Charleroi, the club sought assurances that they would not be liable to pay any compensation to Lokomotiv.

Fifa then refused to issue Charleroi with an ITC, required by clubs across the world to register a newly signed player, and so the deal collapsed.

Diarra sued Fifa for damages in the Belgian courts, citing two of its rules for the collapse of the move.

The first rule, Article 17.2 of Fifa's Regulations on the Status and Transfer of Players (RSTP), states a new club will be jointly liable for compensation, alongside the player, to be paid to the old club where the player has terminated the contract without just cause.

The second allows the national association of the player's former club to withhold an international transfer certificate (ITC) where there is a contract dispute.

Fifa sources had questioned the significance of the ITC rule prior to Friday's judgement, pointing out that in all cases where a club wishing to sign a player involved in a dispute referred the matter to Fifa, registration with the new club was permitted.

The decision had been billed by some in the lead-up to Friday as the most significant since the 1995 Bosman ruling, which effectively gave out-of-contract players complete freedom at the end of their contracts.

Jean-Louis Dupont worked on that case and represented Diarra in this one, and his firm described Friday's ruling as a "total victory" for Diarra.

The Dupont-Hissel firm statement said the decision would pave the way for a modernisation of governance in the transfer market, "in particular the use of collective bargaining between employees and employers" as are more common in American sports.

Antoine Duval, the head of the Asse International Sports Law Centre in The Hague said on social media the ruling was "massive".

Read more: Two Met police officers sacked over stop-and-search of Team GB athlete Bianca Williams reinstated 'with back pay'

Read more: Football regulator to 'put fan voices front and centre', but Premier League warns against 'weakening competition'

The ECJ ruling will now be handed back to the Belgian appeal court which made the referral for a final decision on the specifics in the Diarra case.

A press release from the ECJ issued on Friday morning said: "The rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club."

The court found that while some restrictions on movement may be justified to regulate competition between clubs and to ensure contractual stability in playing squads, it felt the rules in question went "beyond what is necessary to pursue that objective".

Fifa said: "Fifa is satisfied that the legality of key principles of the transfer system have been reconfirmed in today's ruling.

"The ruling only puts in question two paragraphs of two articles of the Fifa Regulations on the Status and Transfer of Players, which the national court is now invited to consider.

"Fifa will analyse the decision in coordination with other stakeholders before commenting further."

Maheta Molango, the chief executive of English players' union the Professional Footballers' Association, said the ruling could have "far-reaching ramifications" for football.