Court of Justice of the European Union (Second Chamber), FIFA v BZ, Case C-650/22, ECLI:EU:C:2024:824, 4 October 2024.
The Court of Justice held that FIFA’s rules on early contract termination and international transfers restricted players’ freedom to work in another EU Member State and competition between clubs. It set out the tests for justification and exemption, leaving the Belgian court to resolve the underlying damages proceedings.
How the dispute arose
The player, identified as BZ in the judgment, signed a four-year contract with Lokomotiv Moscow in August 2013. A year later, the club terminated it, citing his conduct. Lokomotiv sought €20 million through FIFA’s Dispute Resolution Chamber, alleging termination without just cause. BZ counterclaimed for unpaid wages and compensation.
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In February 2015, Sporting du Pays de Charleroi offered BZ employment subject to registration and written assurance that it would not share liability for compensation owed to Lokomotiv. FIFA did not provide that assurance. The Belgian football association, URBSFA, said that registration required an international transfer certificate.
FIFA’s Dispute Resolution Chamber subsequently ordered BZ to pay €10.5 million, dismissed his counterclaim, and ruled that the joint-liability provision would not apply to him in future. The Court of Arbitration for Sport upheld that decision. BZ found employment with a French club in July 2015.
BZ sued FIFA and URBSFA in Belgium for €6 million, alleging that their rules had prevented him working during the 2014/2015 season. The first-instance court upheld his claim in principle and ordered a provisional payment, leaving the remaining amount unresolved. Following an appeal by FIFA, the Court of Appeal in Mons referred questions of EU law to the Court of Justice.
Why the transfer rules mattered
Three features of FIFA’s Regulations on the Status and Transfer of Players operated together. First, a player deemed to have terminated a contract without just cause and the new club were jointly and severally liable for compensation. The calculation could include pay under the old and new contracts and the former club’s transfer-related expenses.
Second, a new club signing the player during the contract’s protected period was presumed to have induced the breach unless it proved otherwise. It faced a ban on registering new players for two consecutive registration periods.
Third, a contractual dispute generally prevented the former national association from issuing the international transfer certificate. Without registration, the player could not play for the new club. These combined risks helped explain why Charleroi’s offer was conditional.
Free movement of workers
Paid professional football is an economic activity. The rules governed employment and participation in competitions, so they were subject to EU law. The fact that BZ’s former club was outside the EU did not remove the cross-border issue: he lived in France and wished to work in another Member State, particularly Belgium.
Article 45 TFEU protects workers’ freedom to pursue employment in other Member States. The Court found that unpredictable financial liability, sporting sanctions and the transfer-certificate barrier could deter clubs from making firm offers and prevent players taking work abroad.
Ensuring the regularity of sporting competitions was a legitimate public-interest objective. Maintaining some stability in club squads could serve that objective, but restrictions had to be proportionate. Contractual stability was a means to that end, rather than a sufficient justification by itself.
Subject to verification by the Belgian court, the rules appeared to go beyond what was necessary. Some compensation criteria were imprecise or unrelated to the terminated employment. Pay under a later contract concerned a different relationship; passing transfer costs onto the player could impose substantial charges negotiated by others.
Joint liability did not depend on the new club’s actual conduct. The presumption of inducement operated without requiring supporting evidence from the former club, and the registration ban could not be adapted to individual circumstances. The Court did not rule out all presumptions or sanctions, but required adequate safeguards and proportionality.
The automatic withholding of a transfer certificate was particularly restrictive: the existence of a dispute could stop the player working and the new club fielding him, without considering their conduct. FIFA’s claimed practice of provisional registration did not cure a regulation that neither provided for nor required that protection.
Competition between clubs
Under Article 101 TFEU, FIFA’s rules were a decision by an association of undertakings. They restricted competition by object, meaning that a separate examination of their effects was unnecessary. Recruiting trained players is central to competition between clubs, but the combined rules made recruitment outside a negotiated transfer extremely difficult.
The Court compared the arrangement to a no-poaching agreement: clubs collectively retained their allocation of players unless they agreed a transfer. Legitimate sporting objectives could not, by themselves, take this restriction outside Article 101(1).
An exemption under Article 101(3) required evidence of all four conditions: efficiency gains, a fair share for users, restrictions indispensable to those gains, and no opportunity to eliminate effective competition for a substantial part of the services concerned. The Court identified serious obstacles to showing indispensability, including the rules’ discretionary and disproportionate features. The Belgian court had to assess the exemption.
Outcome and limits of the ruling
Article 45 precluded the challenged rules unless their application was shown to be necessary to ensure regular competitions while maintaining some squad stability. Article 101(1) prohibited them unless convincing arguments and evidence established every Article 101(3) exemption condition.
The CJEU did not award BZ damages or decide the national dispute. Its interpretation guided the Belgian court’s remaining assessment. The judgment concerned the challenged restrictions; it did not abolish every transfer rule or make contracts freely terminable without consequences.
Source
Full judgment: FIFA v BZ, Case C-650/22, ECLI:EU:C:2024:824. See paragraphs 21–35 for the proceedings, 85–114 for free movement, and 115–158 for competition law.
