EU court rules FIFA transfer laws contradict free movement

The European Union’s top court has ruled that FIFA’s transfer regulations, which require compensation when players break contracts without just cause, are in conflict with the EU’s laws on free movement. The ruling arose from a case involving former French footballer Lassana Diarra and could significantly impact the structure of player transfers across Europe.

In its decision, the Court of Justice of the European Union (CJEU) in Luxembourg highlighted that FIFA’s rules restrict the ability of professional footballers to move freely and pursue new career opportunities within the EU. Under FIFA’s current Regulations on the Status and Transfer of Players, players who terminate their contracts prematurely without legitimate reasons must compensate their former clubs, with the new club also held liable for part of the payment.

The Court acknowledged that some regulations within the transfer system could be justified if proven essential for the organisation of football competitions. However, it expressed doubt that the current system satisfies these criteria.

The case was brought before the EU court after a Belgian judge raised concerns about whether Belgian club Charleroi would have to pay compensation to Russian club Lokomotiv Moscow for acquiring footballer Lassana Diarra, despite the fact that Diarra had terminated his contract with Lokomotiv without just cause.

This ruling could force FIFA to revise its regulations governing player contracts in Europe. It could also mean a potential shake-up of the transfer market, as the court’s decision challenges existing structures that control player mobility and financial compensation between clubs.

The ruling could have a significant impact on Belgium’s football, where the transfer system is a vital part of the football business model. Belgium’s top clubs, such as Genk, Club Brugge, and Anderlecht, rely heavily on acquiring players at low costs and selling them for profit. The potential dismantling of the current transfer system could therefore be dramatic for the Belgian league, as well as other leagues benefitting from player imports and exports (such as the Netherlands and Portugal). 

^{Real Madrid's Lassana Diarra and Standard's Eric Bokanga pictured during a friendly soccer match between Standard and Real Madrid © BELGA PHOTO MICHEL KRAKOWSKI - VIRGINIE LEFOUR}