On October 4, 2024, the Court of Justice of the European Union (CJEU) ruled [3] that some provisions in FIFA's Regulations on the Status and Transfer of Players (RSTP) [4] are contrary to EU law, finding that they restrict free movement of workers and are anti-competitive. 

The case was brought by Lassana Diarra, a former professional footballer who signed with Russian football club Lokomotiv Moscow in 2013. After the termination of his contract due to alleged contractual breaches, Lokomotiv Moscow filed a claim for compensation before FIFA's Dispute Resolution Chamber (DRC). The DRC ultimately found Diarra liable to pay Lokomotiv Moscow compensation for EUR 10,5 million. Following the termination of his contract, Diarra received an offer from a Belgian football club under the conditions that (i) Diarra could be registered and play in the club's first team in all  FIFA, UEFA, and Belgian Football Association competitions and (ii) the club would not be liable to Lokomotiv Moscow. FIFA and the Belgian Football Association provided no such guarantees, causing Diarra to lose the opportunity. 

Diarra brought proceedings in Belgium and claimed damages from FIFA and the Belgian Football Association, arguing that certain rules of the FIFA Regulations on the Status and Transfer of Players (RSTP) related to transfer and registration infringed his rights under article 45 of the Treaty on the Functioning of the European Union (TFEU) [5]. He also argued that FIFA's regulations breached Article 101 of the TFEU, which forbids agreements that hinder competition. The Belgium Court of Appeals referred the case to the CJEU [6], requesting a preliminary ruling on the compatibility of the FIFA provisions with EU law.

The Court ruled in favor of Diarria, finding the current transfer system under FIFA's RSTP violates both the right to free movement of workers under Article 45 and the prohibition of competition-restricting agreements under Article 101. The CJEU recognized FIFA's legitimate interest as a regulatory body in preserving the stability of soccer competitions and ensuring contractual integrity. However, it stressed that such measures must comply with principles of proportionality and transparency. The Court found that FIFA's transfer regulations imposed significant obstacles to the free movement of workers protected under Article 45 of the TFEU. Assessing the provisions in question against the organization's legitimate aim of safeguarding the integrity of soccer competitions, the Court found them disproportionate. It specifically emphasized that the provisions on unilateral contract termination and related compensation mechanisms heavily favored clubs, placing considerable financial burdens on new employers and discouraging clubs from signing players involved in contractual disputes.

In regards to the claims concerning the compatibility of FIFA's transfer regulations with EU competition law under article 101 of the TFEU, the Court found that the transfer system operated as a "restriction of competition by object" by creating disincentives for clubs to engage in the hiring of players with unresolved disputes, thus functioning as a form of market partitioning. 

The CJEU's decision makes it clear that certain aspects of FIFA's rules governing the compensation obligations and sporting sanctions as they stand now are incompatible with EU law. While amendments will be necessary to ensure these provisions align with EU law, how significant changes will need to be and their practical impact on the football landscape remain to be seen.