Fifa’s transfer rules go against European Union law, rules EU’s highest court

The court of justice of the European Union (CJEU) has said that key Fifa rules governing the transfer system are “contrary to EU law”, which could have potentially explosive consequences for the future of club football.
The resolution of Fifa v the player “BZ” – AKA the former Chelsea, Arsenal and Portsmouth midfielder Lassana Diarra – will cause great uncertainty across the game. It contains two key judgments after the court found that rules relating to the authorisation of transfers for players restrict freedom of movement, a key tenet of EU law, and that current rules requiring buying clubs to cover the cost of compensation for a player who breaks a contract ‘without just cause’ are anti-competitive.
In a statement released by the CJEU, headed – “Some FIFA rules on international transfers of professional footballers are contrary to EU law” – the court laid out the top line judgments which will now be subject to further scrutiny by the Belgian courts, where the case originally began.
“First, 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, established in the territory of another Member State of the European Union,” the statement said. “Those rules impose considerable legal risks, unforeseeable and potentially very high financial risks as well as major sporting risks on those players and clubs wishing to employ them which, taken together, are such as to impede international transfers of those players.”
Secondly, the court said, “as regards competition law, the Court holds that the rules at issue have as their object the restriction, and even prevention, of cross-border competition which could be pursued by all clubs established in the European Union, by unilaterally recruiting players under contract with another club or players about whom it is alleged that the employment contract was terminated without just cause.” These rules, the court said, “do not appear to be indispensable or necessary”.
Fifa will now face serious questions as to how it, as world football’s governing body, adjusts its rules going forward, or indeed whether it can. The possibility of a new environment where players are able to more freely break with a contract in order to move to another club, with that buying club less at risk of facing claims for compensation as a result, now seem much more likely. Fifa has been approached by the Guardian for comment.
The genesis of the case reaches back to 2014, when Diarra was playing for Lokomotiv Moscow. The then-France international was in dispute with the Lokomotiv over his salary. The club decided this amounted to a breach of contract and terminated it. They then took Diarra to Fifa’s dispute and resolution chamber (DRC), seeking damages. Despite a counterclaim from Diarra, the DRC found in Lokomotiv’s favour and fined Diarra €10.5m. At the same time, he received an offer of a contract from the Belgian club Charleroi. It came with a condition: Charleroi wanted confirmation from Fifa that Diarra would be able to move and that they would not be liable for any of the costs owed to Lokomotiv.
Fifa did not give those guarantees, with its rules mandating that an international transfer certificate must be granted by the league a player is leaving before any deal could take place. With no moneys having been paid to Lokomotiv, that permit was not forthcoming. As a result, in December 2015, Diarra brought legal action against Fifa and the Belgian football league, claiming a loss of earnings and starting a long process that has led to this week’s judgment.