FFAR – The German Challenge

Background

Courts in Germany have been particularly active in relation to determining the legality of the FIFA Football Agent Regulations (FFAR). Two judgements have been issued, from two different regional courts.

Mainz Regional Court

On 31 March 2023, the Mainz Regional Court lodged a request with the ECJ for a preliminary ruling on the compatibility of FFAR with certain aspects of EU legislation.

This request seeks to establish whether a number of the provisions of the FFAR (including the service fee cap, agents’ reporting requirements and the basis for calculating service fees) are compatible with EU competition law and the GDPR.

Dortmund Regional Court

In the Dortmund Regional Court, FIFA sought to argue (among other things) that the FFAR are exempt from the requirements of EU competition law because the FFAR (i) serve a legitimate purpose, (ii) they are necessarily related to the pursuit of that purpose, and (iii) their restrictive effects on competition are proportionate (known as the Meca-Medina criteria).

The Court rejected this argument on the basis that the FFAR relate exclusively to the economic activities of agents and is not, therefore, a purely sporting rule. Even if the Meca-Medina criteria were applied, the Court held that they would fail the first two tests.

Accordingly, the Dortmund Regional Court issued an interim injunction which prohibits FIFA and the DFB from implementing and enforcing the FFAR in Germany.

What happens now?

FIFA has appealed against the decision of the Dortmund Court.

In the meantime, the FFAR will be suspended in their entirety for all transactions with a link to the German market.

A link will exist as soon as any party to a transfer (agent, club, player or coach) has a link to Germany and, as soon as such a link is established, the suspension of the FFAR will apply to all parties to the transaction, regardless of where they are based.

The DFB’s obligation to implement NFAR is also suspended, although the agent exam on 20 September 2023 still went ahead.

Comment

It is not clear whether FIFA will be able properly to implement the FFAR when one of the major markets for players and coaches is exempt. For example, it is entirely foreseeable that agents will look to structure deals so that there is a “link to the German market” and the FFAR no longer apply (for example, by appointing a German agent on a sub-contracted basis) - theoretically enabling them to charge a higher service fee than the 3% cap applicable everywhere else in the world.

Whether or not FIFA will permit this, or will issue further clarification on the meaning of a “link to the German market”, remains to be seen.