FFAR – The Court of Arbitration for Sport
Background
The CAS’s consideration of the FIFA Football Agents Regulations (FFAR) was instituted by the Professional Football Agents Association (PROFAA), a body claiming to represent certain football agents from around the world. PROFAA argued that the FFAR was contrary to a wide range of national and EU laws, including Swiss, Italian and French law, EU competition law, the EU Services Directive and the EU GDPR.
PROFAA’s claims were dismissed in their entirety. However, it is the claims under EU competition law that have prompted the most scrutiny, particularly in light of the injunction imposed by the Dortmund Regional Court.
The 3% Cap: Restricting competition?
PROFAA argued that the 3% cap amounts to a restriction on agents’ ability to compete on price, and that it deters newcomers by putting up barriers to entry into the market.
However, in contrast to the German Court, the CAS panel found that Article 15(2) FFAR (which imposes the cap on commission) does satisfy the Meca-Medina criteria and therefore does not contravene EU competition law.
First, the CAS found that Article 15(2) pursues a legitimate objective because it seeks to ensure the proper functioning of the transfer system and thereby protects the integrity of the sport.
Secondly the CAS panel accepted that Article 15(2) is related to the pursuit of those goals because it ensures that agents provide services at fair prices and limits conflicts of interest and other unethical or abusive practices. The CAS found that Article 15(2) therefore protects players by aligning their interests with the interests of agents.
Thirdly, the panel concluded that (i) it is open to agents to charge for “Other Services” (which are not subject to the cap), and (ii) other proposed methods of achieving these objectives would not have been effective. It therefore considered Article 15(3) to be proportionate.
The 3% Cap: Abuse of a Dominant Position?
PROFAA also argued that FIFA holds a dominant position in the market of football agent services and that the 3% cap amounts, effectively, to price-fixing and discrimination against larger agents (because agents working on smaller deals, where the player earns less than $200k p.a., are not subject to the same cap).
Whilst the CAS panel found that FIFA does hold a dominant position in the market of football agent services, it found that PROFAA did not provide enough evidence that the 3% cap was unfairly low and did not relate to the economic value of the services provided by agents.
Again, applying the Meca-Medina criteria, the CAS rejected PROFAA’s arguments and found that (i) the 3% cap did not amount to price-fixing because agents were free to compete at levels under 3%, and (ii) the difference between the 3% cap and the higher cap for agents working on smaller deals, did not amount to discrimination. Accordingly, the CAS found that the 3% cap did not contravene EU competition law.
Comment
Immediately following the CAS decision, the European Football Agents Association issued a striking statement, saying the decision came as “no surprise”, that it was “orchestrated by FIFA itself”, and that “using the facade of PROFAA for advancing their own regulations was a clear political move of FIFA”.
Regardless of whether these criticisms are fair, the CAS decision does not by any means represent a blanket approval for the FFAR. The German Courts have already prevented the implementation of the FFAR in Germany, and the English challenge under FA Rule K is ongoing. The ECJ itself is also considering whether the FFAR are compatible with European Competition Law next year.
If the FFAR cannot be implemented in either England or Germany, two of the game’s biggest markets, FIFA will face a difficult task in standing behind its current iteration of the FFAR.