Competition – FIFA regulations on occupation of football players’ agents19/06/05 / cata_european-union-news

In its judgment of 26 January 2005 in case Laurent Piau v. European Commission, the Court of First Instance (hereinafter the “CFI”) ruled on compliance of the regulation issued by the Fédération Internationale de Football Associations (hereinafter the “FIFA”) concerning the occupation of football players’ agents with the provisions of the EC Treaty on competition.

Mr Laurent Piau submitted to the European Commission a complaint considering the rules included in the FIFA regulation as imposing discriminatory restrictions on access to the profession, and thus incompatible with the EU competition law, particularly Article 81 of the EC Treaty.

Following the proceedings opened by the European Commission, the FIFA amended its regulation by removing certain provisions potentially restricting competition. Under such amended regulation, performance of the occupation of players’ agents is subject to the following rules:

(i) only an individual (and not legal entity) may perform the occupation of a players’ agent, and this only upon obtaining a licence from the competent national association;

(ii) passing of an examination consisting of multiple choice test is a precondition for obtaining the licence;

(iii) the agent must have a professional liability insurance policy;

(iv) contract concluded between the agent and the player must be executed in writing, concluded for a maximum period of 2 years, which may be renewed, and contain the agent’s remuneration calculated on the basis of the player’s salary (the regulation stipulates that in case of absence of a different agreement between the parties, the amount of agent’s remuneration shall be 5% of the player’s salary);

(v) sanctions including penalties may be imposed to agents, players and clubs in case of breach of the regulation.

Subsequently, the European Commission terminated the proceedings claiming that by the amendments FIFA removed the provisions which might harm the competition rules, and rejected Mr Piau’s application by which he maintained his original complaint claiming that even the amended FIFA’s regulation harm Community competition law. Mr Piau brought an action against the European Commission decision, which is subject of the judgment in question.

In the judgment, the CFI observes that football clubs are undertakings under Community competition rules, and FIFA as an international association of national associations of football clubs, is itself an association of undertakings. The FIFA’s regulation is therefore a decision of association of undertakings envisaged by Article 81 of the EC Treaty.

The CFI states that the activity of football players’ agents constitutes an economic activity, which does not fall within the specific nature of sport, and therefore, is subject to the competition rules.

The CFI further states that its review of the European Commission’s decision can be limited only to the European Commission’s assessment of the alleged infringement to the competition rules, and cannot examine the authority of FIFA to adopt rules regulating occupation of players’ agents.

The CFI approved the European Commission’s opinion that the amended regulation does no more contain anticompetitive features, that the exams to be passed by the agents ensure sufficient guarantees of objectivity and transparency, that the obligation of insurance does not constitute a disproportionate requirement, and that the provisions concerning agents’ remuneration do not constitute fixing of prices within the meaning of competition law.

On the other hand, the obligation to obtain a licence constitutes, according to the CFI, a barrier to access to the market and affects the competition. However, such barrier can be accepted if the conditions for exemption stipulated in Article 81(3) of the EC Treaty are fulfilled. The CFI agrees with the European Commission’s conclusion that such an exemption can apply to this case.

The facts that performance of players’ agents activities is not regulated in the EU Member States (except in France), neither there exist their collective organisations, that professionalism and morality need to be introduced to such activities, and that (as results from the above) the licence system does not eliminate competition, sufficiently justify adoption of the regulation by FIFA.

Upon the request of Mr. Piau, the CFI examined possible abuse of dominant position on the side of FIFA under Article 82 of the EC Treaty. Contrary to the European Commissions opinion, the CFI observes that FIFA represents the clubs on the market of services where players and clubs act as buyers and agents as sellers, and as such has a dominant position on that market. However, since the regulation does not impose quantitative restrictions as to the access to the occupation of agents which would harm the competition, but only qualitative requirements which may be justified, it does not constitute an abuse of the dominant position by FIFA.

The judgment of the CFI may be subject of an appeal to the European Court of Justice, and may not be therefore final.