An Update on the Legal Case Against the New FIFA Football Agent Regulations
Introduction
In our previous blog on the legal proceedings around the new FIFA Football Agent Regulations we outlined the legal basis of the cases, how they may develop, FIFA’s defences, possible outcomes and the wider effect it may have upon football agents and football itself.
Since then, there have been significant developments in major court cases in different jurisdictions and preliminary decisions have been made by national courts whilst an overall judgement from the higher European courts is still ongoing and may take any length of time. In this blog we will revisit the background of the legal cases as well as explaining the conclusions that have been drawn so far and the impact these decisions could have on the final outcome.
The Legal Basis
To remind you as to why there is such a legal dispute over the new FIFA Football Agent Regulations, the foundations of these proceedings relies on the facts that agents strongly believe that there are areas of the new regulations that are incoherent and contradictory to wider areas of European and National Law and hence, they should be deemed invalid and unenforceable. FIFA are not immune or excused from local and international laws and the new agent regulations must be compliant and compatible with these legal systems. Within the legal proceedings against FIFA, it must be shown that this is the case or the risk is that FIFA’s regulations will be dismissed and declared unenforceable.
For the purpose of explaining the decisions made so far, let’s revisit the fundamental legal grounds for the dispute against FIFA:
- Competition Law? Agents and their legal representatives have argued that FIFA have breached European Competition Law and that it is facilitating an anti-competitive industry. The commission cap is the biggest contradiction against Competition Law as it prevents agents conducting their business competitively against other agents. Smaller agents and agencies will be unable to financially maintain themselves against larger agencies and the industry will become monopolised by a select few large agencies. Furthermore, this could also be an illegal restriction of trade and limits the earning potential of agents.
- Abuse of Dominance? FIFA are the governing body that makes, amends and removes rules and regulations within the sport and across the world, their regulations are implemented on a national level. The case against FIFA has set out to show that the dominant organisation (FIFA) has abused their position. For it to be said that the regulations are an ‘abuse’ of their position in the football industry, the cases have aimed to argue that the new agent regulations were created without a regard for impacted stakeholders, are damaging to market competition as well as to the general well-being of the industry. Additionally, the agents’ case is trying to prove that any alleged attempts of FIFA to avoid abuse of dominance, such as the “consultation” process they conducted with agents, were futile.
- Reasonableness, Proportionality and Chance of Success? FIFA has implemented the new agent regulations in the hope of achieving an overall improvement to the agent industry and to football in general. This has arisen following widespread criticism of a lack of transparency in the agency industry and the significant outflow of money out of the game as clubs pay large commission sums. The cases against FIFA are aiming to successfully show that the new regulations, as they currently are, are not reasonable, proportionate, nor stand a tangible chance of achieving the aims of FIFA. For example, a reasonably expected consequence of the new regulations is that agents and clubs will find different methods of paying agents ethically, and if not, it is the player that is burdened rather than the clubs. Hence, if courts conclude that the regulations are therefore unlikely to achieve their aims of creating a more transparent and ethical industry, then it is possible that the FIFA Regulations will not be upheld.
There are then several legal issues that are being considered in the courts surrounding the aspect of the new regulations and the FIFA Clearing House requiring agents to publicly declare their earnings. The concerns around this are not only based on the right to privacy of agents but also the dangers this may present to agents in certain parts of the world. Agents hope that courts will consider breaches to privacy and an effect on the safety of agents to be a valid argument against this part of the new regulations.
Ultimately, agents feel as though at least some parts of the new FIFA agent regulations, particularly the commission cap, are unfair. If the regulations were to be ultimately upheld as valid by the courts, agents that aren’t in the top bracket of earners are likely to be driven out of business and this could have drastic consequences for players in lower leagues and the wider football landscape. However, ‘unfairness’ is often not enough, the cases brought to different legal systems globally are relying upon evidence and well thought-out arguments that the regulations undermine national and international laws.
What has happened so far?
As we discussed previously, the reaction of agents was one of unity with many agent ‘unions’ coming together to initiate a mass approach against the new FIFA Football Agent Regulations in the hope of gathering strong enough financial and social support to bring a robust and successful case to courts across the world.
The cases are gradually ascending through the national and international legal systems. Many proceedings began in national courts such as in the Netherlands, Belgium, Germany and beyond. However, cases are also ongoing and are being heard in courts such as the Court of Arbitration for Sports.
In Germany, the national court has already passed a significant ruling in favour of the case of football agents. After a German Agency sued against the German Football Association (DFB), an injunction has been issued by the national court ordering that the FIFA Football Agent Regulations are not to be implemented or enforced until a final ruling is given by the European Court of Justice which the case had previously been escalated to although this final decision may take a long period of time to be concluded. This follows from the ruling in the Mainz District Court referring their ruling on the regulations to the European Court of Justice back in April and encouraging the consideration of a temporary injunction.
The Dortmund-based German Court have now reiterated that they agreed with the legal objections that the new regulations undermined the principles of competitiveness in common law. This is a positive preliminary outcome for agents and perhaps gives an indication as to how the major courts are likely to resolve the case. It is also a point of concern for FIFA who will now be unable to enforce their previously ‘universal’ laws in Germany. The injunction, for now, is only within the German jurisdiction but may complicate matters such as international transfers in and out of Germany in the summer window if the regulations are enforceable in the other relevant country.
In a separate case, the Netherlands Central Court, although also acknowledging the need to wait for the decision of the highest European Court (the ECJ) before a conclusive and universally binding ruling is given, offered a slightly different verdict from the Dortmund court. The court demanded that the European Football Agents Association and Pro Agent groups pay the legal fees due for the proceedings and denied that an injunction would be a suitable solution in the circumstances. Perhaps this gives the impression that the final outcome of the court proceedings is not a foregone conclusion and agents cannot be complacent in believing their case against FIFA will be successful.
It is expected that the Court of Arbitration for sport (CAS) will provide a ruling by the end of July this year, specifically addressing the compatibility of the FIFA Football Agent Regulations with substantive EU law.
The Best Possible Outcome
In general, many agents are supportive of the concept of new industry regulations, particularly if they would be successful in improving the quality of those in the industry as well as increased ethical behaviours. Hence, it is assumed that agents do not want to achieve complete immunity from regulation as a result of challenging the new Regulations in court. Aspects such as the exam and a formal, universally applicable licensing system are positive barriers to entry into the industry, whilst other aspects raise points of discussion around fairness and practicality, as well as legal connotations. In reality, the aim of battling against FIFA is to protect the agency profession and ensure that the allegedly unfair and legally problematic regulations that are currently being implemented are deemed to be unenforceable.
Instead of total deregulation, the desired outcome is for feasible, reasonable and practical regulations. The hope is that under the rulings of international courts, FIFA will be legally ordered to amend their new regulations. The best possible outcome is to find a ‘middle-ground’ compromise that still achieves the enhanced transparency in the agency and football industries but does not have damaging consequences for the game as a whole and for the livelihoods of working professionals, especially for players.
Summary
The most obvious conclusion that can be drawn from the court rulings that have arisen so far is that there is a considerable degree of uncertainty, even within national courts, as to whether the new regulations ought to be deemed legally invalid and unenforceable.
The common ground of both cases so far is that national courts are waiting for the decisions of the European Court of Justice as well as the Court of Arbitration for Sport to give a more comprehensive and universally-applicable ruling. There are also expected to be significant decisions and rulings given as a result of additional cases proceeding in England, Belgium and Switzerland. However, until the higher European Court of Justice provides a definitive conclusion as the final say and preliminary injunctions are not instated, the FFAR will be applied and enforced in many countries. We will continue to monitor this!