The legal dispute between FIFA and player agents is entering the next round. In the end, the European Court of Justice will probably have to decide whether the world football association can cap consultants’ commissions. And also about whether FIFA will bring the billion-dollar transfer business under its control.
In the isolated association cosmos of world football Gianni Infantino In the end there is hardly any resistance to be feared. It took the Dortmund regional court to curb the FIFA patron’s circles in one of his heart projects: the Dortmund judges had issued an interim injunction in May 2023 and prohibited Infantino’s world football association from applying its new player agent regulations.
Fines for FIFA and DFB
Several German players’ agents had protested against the “FIFA Football Agent Regulations” FFAR for short. They saw the restrictions imposed by the world association, including the disclosure of transfer payments and a cap on commissions, as a violation of antitrust law. The district court in Dortmund ruled in favor of the intermediaries and declared the key points of the FFAR to be anti-competitive.
But that’s not all: FIFA and the German Football Association (DFB), as the national association responsible for implementing the FFAR regulations, received fines of 150,000 euros from the judges. They were also threatened with further legal penalties if they continued to impose the FFAR restrictions on the player agents or did not adequately inform them about them.
FFAR suspended for the time being – next round before OLG Düsseldorf
FIFA then gave in – and last December instructed the national associations to stop applying the controversial advisor regulations for the time being. At the same time, the world association appealed together with the DFB to the Higher Regional Court in Düsseldorf: a decision is now to be announced there on Wednesday (March 13, 2024).
It is the next round in a legal dispute between football associations and the intermediary industry that has been taking place in courts around the world for several years. The DFB had already approved the first set of regulations for player agents in 2015. This required, among other things, a general registration requirement for advisors and the recognition of association jurisdiction as well as a ban on commissions for subsequent transfers of a player.
The FIFA rules for the consulting industry went even further in parts by setting upper limits for agent commissions: up to six percent of a player’s annual salary, or in the case of a transfer a maximum of ten percent of the transfer fee. The DFB, which would have to implement these regulations for the German market, did not want to comment on Sportschau’s request and referred to the ongoing legal proceedings.
814 million euros – player agents collect Record commissions
At first glance, tightening control over the business conduct of player agents appears to be a sensible concern: According to FIFA, last year the clubs paid 814 million euros in advisor fees for international player transfers alone, more than ever before. The German clubs paid commissions amounting to 82 million euros to player agents.
Club managers, but also many fans, have long complained that the advisors exercised too much power. The unhealthy dynamics in the transfer market and the continued price gouging, which at the same time cements the dominance of a few large clubs, have also been blamed on the busy “star advisors” in the past.
FIFA under Cartel suspicion
However, the clubs, especially FIFA, are part of the billion-dollar game. For that reason alone, it seems suspicious when Infantino’s world association of all people wants to get money from the consultants.
Legally, in the antitrust sense, it actually represents a real problem: sports associations like FIFA are companies that are not allowed to abuse their dominant market position, says Dr. Björn Christian Becker, antitrust law expert from the University of Würzburg: “As corporate associations, they are not allowed to make decisions that restrict competition. If FIFA sets up regulations for other market participants, for example players’ agents, and prescribes a certain behavior for them, this can very quickly become a restriction of competition.“
Becker followed the legal disputes surrounding the FFAR and also wrote an expert opinion for a plaintiff brokerage firm. Particularly problematic, according to the business lawyer, is the setting of prices, such as the maximum remuneration for player agents set by FIFA. In this context, Becker speaks of “Hardcore antitrust violations“.
Clearing house for transfers – FIFA as treasurer
Another FFAR passage that could further strengthen FIFA’s position of power is considered particularly explosive: According to Article 13, all remuneration payments to players’ agents should in future be made through a central clearing– Position at the world association. FIFA boss Infantino would thus become the top treasurer in the transfer business.
For sports law expert Dr. Philipp Wehler, who is also dealing with the ongoing cases, said this would cement FIFA’s global market power: “If you control financial flows, you control the market comprehensively. FIFA can withhold amounts; all disputes go through FIFA committees. The market players would be completely tied to the FIFA system. There is a great danger in this.“
Players’ agents also took this to court in several countries, from England, Spain, the Netherlands to Brazil. Only once, during a hearing before the International Court of Arbitration for Sport (CAS), were the FIFA rules not objected to. In the majority of the remaining court cases, the judges ruled in favor of the players’ agents or referred them to the European Court of Justice.
Player agent-Regulations before the European Court of Justice
A final decision will probably be made there in the end. There are already two cases before the ECJ for a so-called preliminary ruling: one concerns the FFAR regulations, the second the DFB regulations for players’ agents. Germany’s best-known player agent Roger Wittmann had sued against this.
A decision from the ECJ is probably not expected until the end of 2024 at the earliest. Experts are also cautious about making predictions. Whether the strict antitrust requirements apply to all areas of commercial sport is controversial among lawyers.
Super League decision with a signal effect
However, last December the ECJ made several rulings on antitrust disputes in professional sports, including on Super League, which are likely to serve as a signal for the legal dispute over the FFAR: Until now, when it came to the question of whether sports associations could be exempt from the cartel ban, the so-called Meca Medina judgment from 2006 was the reference model. At the time it was about the IOC’s anti-doping regulations, which also represent an inadmissible interference under antitrust law. However, the ECJ allowed it to apply because it valued the integrity of sporting competition more highly.
ECJ only allows sporting goals to be valid to a limited extent
In the decision on the Super League, which also dealt with possible antitrust violations, the ECJ judges now set their sights a little sharper: Accordingly, market interventions that objectively have the purpose of restricting competition can no longer be weighed up against potentially legitimate ones , sporting goals.
Such interventions in competition are then considered inadmissible in most cases. Lawyers speak of “intended to restrict competition“This, according to antitrust law expert Becker, usually also included price agreements, such as the upper limit for remuneration provided for in the player agent regulations.
When opening the appeal proceedings, the Düsseldorf Higher Regional Court also expressly referred to the most recent ECJ decisions. At the first meeting in mid-February, the presiding judge Jürgen Breiler left it open to what extent he would take the submission from Luxembourg into account in his decision.
Regardless of this, the OLG already indicated that it could follow the arguments of the lower court in Dortmund: According to the presiding judge, it could not see what the regional court could have done wrong.