Football rules that force players to pay compensation for quitting a club violate European Union law, the bloc’s top court ruled, upending sanctions that underpin how the sport trades key players.
The Court of Justice backed Lassana Diarra, a player who argued that football’s governing body FIFA went too far in preventing him from taking a new job with a Belgian club after his contract with Lokomotiv Moscow was terminated.
Under FIFA’s rules, players must pay compensation to clubs when their contracts are terminated without just cause. Any team they sign with is also liable to pay up.
Judges said the rules “impede the free movement of professional footballers” and “are similar to a no-poach agreement.” While some restrictions could be justified, these “do not appear to be indispensable or necessary,” they 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,” the court said in a statement.
They also “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,” it said.
“The possibility of competing by recruiting trained players plays an essential role in the professional football sector,” it said.
“Rules which place a general restriction on that form of competition, by immutably fixing the distribution of workers between the employers and in cloistering the markets, are similar to a no-poach agreement,” it said.
FIFA said the ruling “only puts in question two paragraphs of two articles” of its transfer rules and that it would analyze the decision before making any further comment.
Diarra’s former club had sought €20 million compensation from him when it ended his contract in 2014. A new job offer from Belgium’s Sporting du Pays de Charleroi was withdrawn because FIFA refused to give him a license to play.
Diarra went to a Belgian court to seek compensation from FIFA and the Belgian football union in a challenge backed by players’ union FIFPro. FIFA appealed that decision and the Belgian court handling that has asked the EU court to clarify whether FIFA’s rules comply with EU law. Final decisions on the compensation will be made by the Belgian tribunal.
The case is C-650/22 FIFA.
This article has been updated with comment from FIFA.