Game Changer: CJEU Declares FIFA's Player Transfer Rules Unlawful

On 4 October 2024, the Court of Justice of the European Union in Luxembourg issued a judgment that might change the game for European football clubs.

The decision was made following a request for preliminary ruling of the Court of Appeal of Mons, Belgium. Lassana Diarra, a French former professional football player took FIFA to court stating that its rules prevented him from entering into a contract with a Belgian football club.

The Court of Justice decided that FIFA’s international transfer rules for football players (Regulations on the Status and Transfer of Players or RSTP) are incompatible with two EU law principles: the free movement of workers and the prohibition of anti-competitive agreements.

The RSTP contain sanctions in case of premature termination of a contract by a player without just cause. Both the player and the new club are severally liable to pay compensation to the former club. The player will also not be able to obtain the International Transfer Certificate from their former football association as long as a contractual dispute is ongoing. Finally, the new club can be subject to a sporting sanction, namely that they cannot register new players for a certain period.

After his termination at Lokomotiv Moscow, Lassana Diarra received an offer from Belgian sporting club Charleroi. However, the club subsequently refused to sign with Diarra because they risked being held liable to pay compensation to Lokomotiv Moscow in application of the RSTP. The court in first instance held in favour of Diarra and decided the FIFA and the Belgian FA must pay compensation for preventing him to join Sporting Charleroi. The decision was appealed and referred for preliminary ruling by the Court of Appeal of Mons.

The Court of Justice held that the RSTP are in fact contrary to EU law on two levels.

The Court stated that the rules entail high legal, financial and sporting risks for clubs and players and thus impede international transfers of players and the free movement of workers. The Court stated that rules restricting free movement may be justified, for example to ensure the stability of players in football clubs and the regularity of interclub football competitions. However, the rules in question seem to go beyond what is necessary to achieve this objective. The Court of Appeal of Mons will verify whether the rules are disproportionate, and will decide if Diarra receives damages from FIFA and the Belgian FA.

The Court of Justice also held that the RSTP restrict cross-border competition between EU football clubs. The rules prevent clubs from unilaterally recruiting players that are already under contract with another club, as well as players who terminated their contract allegedly without just cause. The Court states that the ability of clubs to compete by recruiting top players is essential to the professional football industry. These rules again seem to be disproportionate to their objective. The Court of Appeal of Mons will verify this.

Similar to its predecessor, the Bosman-judgment of 1995, this judgment significantly enhances football players’ rights. Known as the Diarra-judgment, it will be of great importance to the interpretation of EU rules on free movement of workers and will have far reaching effects on the football transfer industry in the EU. It remains to be seen how FIFA will draft new rules to replace the current RSTP.

Source: CJEU 4 October 2024, C‑650/22, FIFA v. BZ and others, ECLI:EU:C:2024:824