Diarra Case: EU Court Finds FIFA Transfer Rules In Violation of EU Law

The European Court of Justice (ECJ) ruled on Friday that certain FIFA regulations on international player transfers are incompatible with EU law, asserting that they limit players’ freedom of movement within the union. This decision came in response to a legal challenge from former French footballer Lassana Diarra, who contested FIFA’s rules following a 2014 dispute with Russian club Lokomotiv Moscow.

Diarra joined Lokomotiv Moscow in 2013 but had his contract terminated a year later, allegedly due to dissatisfaction over pay cuts. In response, Lokomotiv sought compensation from FIFA’s dispute resolution chamber, while Diarra filed a counterclaim for unpaid wages. However, the Court of Arbitration for Sport (CAS) sided with the club, ordering Diarra to pay €10.5 million ($11.2 million).

Diarra further challenged FIFA, arguing that the organization’s rules impeded his efforts to join a new club. He claimed that the strict transfer regulations led to a canceled deal with Belgian club Charleroi, resulting in his filing for damages and lost earnings of €6 million.

The EU Court’s Ruling

The ECJ highlighted that FIFA’s Regulations on the Status and Transfer of Players (RSTP), which require compensation if a player ends their contract “without just cause,” obstruct the freedom of movement for professional athletes. The ruling also addressed the regulation stipulating that both a player and new club may be held jointly liable for compensation, which the court found to be overly restrictive.

“The possibility of recruiting trained players is essential to professional football,” the ECJ statement read. The court described FIFA’s policies as akin to a “no-poach agreement,” implying that they limit players’ ability to freely transition between clubs.

This landmark ruling may impact the global transfer system and labor practices in sports. Some observers have drawn parallels with the Bosman ruling, which allowed players to transfer freely upon contract expiration, transforming football’s transfer landscape in 1995. While the Diarra case returns to the Belgian courts for further proceedings, the decision could pave the way for increased player freedom in changing clubs.

FIFPro, which supported Diarra’s legal challenge, welcomed the decision, stating on social media: “The ECJ has just handed down a major ruling on the regulation of the labor market in football…which will change the landscape of professional football.” FIFA and Diarra have not yet issued statements regarding the ruling.

Also read: EU Approves Tariffs on Chinese Electric Vehicles Amid German Opposition