Analysing CAS decision on the prortionality of the FIFA Football Agents Regulation

Analysing CAS decision on the prortionality of the FIFA Football Agents Regulation~E.U Olubor Esq.

The subject of this dispute bother on the fundamental question, whether FIFA can extend its regulatory powers beyond the task of governing the sport of football itself and cover peripheral economic activities, particularly the market of football agent service which it did with the establishment of the FFAR

The Panel in reviewing Article 15(2) of the FFAR which imposes a service fee cap on service charges to be paid to football agents. The panel in assessing its compatibility with article 101TFEU.

The panel concurs with the position of PROFAA that FIFA is an association of undertakings which holds a dominant market position within the definition of article 101& 102 of the TFEU respectively and also relying on the decision in Piau where the EU General Court specifically confirmed that FIFA holds a “collective dominant” position under Article 102 TFEU in the relevant market of football agent services

The panel, relying on the ancillary legal framework set out in the case of wouter, Mecca/ Medina stated that FIFA enjoys certain margin of appreciation in deviating from the competitive market rules set out in 101&102 of the TFEU so long as they are appropriate and proportionate and it's meant to serve public interest.

The Panel analyses FIFA's claim of pursuit of legitimate objectives, by analysing FIFA's claim that the transfer market is integral to team composition, which, in turn, is a significant factor determining the performance of teams in national and international competitions. FIFA furnished the Panel with a data showing market failures as a result of activities of Agents, for instance: (i) the increase in the number of international transfers, (ii) the increase in spending on international transfer compensation, and (iii) the disproportionate increase in service fees paid to football agents, particularly following the 2015 de-regularisation of the football agents market, as well as evidence of (iv) conflicts of interest and (v) abusive, unethical and illegal practices 

The panel agrees with the claims of FIFA that article 15(2) FFAR seeks to ensure the proper functioning of the transfer system and protect the integrity of the sport, by ensuring: a) quality of the service of agents at fair and reasonable service fees that are uniformly applicable, (b) limiting conflicts of interest and unethical conduct, (c) improving financial and administrative transparency, (d) protecting players, (e) enhancing contractual stability between players, coaches and clubs, (f) preventing abusive, excessive and speculative practices, and (g) promoting spirit of solidarity between elite and grassroots football.

Even though the panel agrees with the arguments canvassed by FIFA, it also highlighted the fact that PROFAA failed to robustly demystify the connection between (i) regulating football agent services in the transfer market and (ii) the sport of football itself. I am forced to agree with this assertion. FIFA and its undertakings (i.e. football Clubs and National Associations) hold a dominant position in contractual negotiations. There is nothing to show that they are unduly influenced by football agents, neither is there any fiduciary relationship between these undertakings and Football agents, as a matter of fact, these undertakings have the financial capacity to higher the most qualified experts in ensuring they are not taking advantage of by football agents during negotiations. In my opinion, the FFAR is only an attempt to scapegoat football agents for the inflation that has greeted the transfer market in recent years, without considering the fact that this might be caused by the fact that there is a lot of money chasing few players and some of these monies are not generated from sporting engagements but from private individuals and governments spending their own resources on the purchase of players.

With regard to the provisions of Article 12(8) -(9) of the FFAR, which deals with multiple representation. The panel agrees with the position of FIFA that the said provision does not amount to an abuse of the dominant position. This is based on the fact that the engaging entity and the transferred individual in principle have a joint interest in negotiating a lower transfer fee in order to free up more funds for the transferred individual’s salary, but this is not the case in the following situations:

(i) dual representation by a football agent of the releasing entity and the engaging entity because the former seeks to maximize the transfer fee, whereas the latter seeks to minimize the transfer fee; (ii) dual representation by a football agent of the releasing entity and the transferred individual because the former seeks to maximize the transfer fee, whereas the latter seeks to maximize its individual remuneration, (iii) triple representation by a football agent of the releasing entity, the engaging entity and the transferred individual because this creates the two conflicts (i)-(ii) above. 

Also, the Panel agrees with the position of FIFA that Article 15(2) FFAR, and any other provisions thereof, do not constitute a restriction or an obstacle to the freedom of agents to provide cross-border services within the EU under Article 16 of the Services Directive because the FFAR establish a harmonised regime that applies uniformly throughout the EU (and beyond). Therefore, Article 15(2) FFAR does not create any obstacles for football agents to provide cross-border services within the EU.

The Panel notes that Article 19 FFAR is a general, incomplete and vague provision. FIFA provides more detail in its written submissions. In particular, FIFA explains that the processing of personal data pursuant to Article 19 FFAR seeks to improve financial and administrative transparency. By improving transparency, Article 19 FFAR aims to fulfil the general aims of the FFAR, namely to (i) raise professional and ethical standards, (ii) ensure the quality of the services provided by Football Agents, (iii) protect players, (iv) enhance contractual stability and (v) prevent abusive, excessive and speculative practices.  

Nevertheless, the Panel invited FIFA to (i) integrate in the text of Article 19 FFAR all relevant details regarding the disclosure of agents’ personal data, particularly the sets of data that will be shared, with which particular stakeholders and under what conditions or channels, and (ii) ensure that the data published is strictly necessary and proportionate to attain the legitimate objectives of the FFAR.  

In conclusion, the Panel dismissed the case of the claimant i.e. PROFAA, and agrees almost entirely with the Case of FIFA with the exception that it should throw more light on article 19 of the FFAR.