Landmark ruling from top EU court says some FIFA rules on transfers are contrary to EU law

Some FIFA rules on player transfers are contrary to European Union legislation relating to competition and freedom of movement, the EU’s top court said on Friday.

The ruling will likely lead to a shakeup of the soccer market's global regulations and could change the sport's economy.

The European Court of Justice's ruling came after former France international Lassana Diarra legally challenged FIFA rules following a dispute with a club dating to a decade ago. Diarra argued that FIFA's restrictions meant he was unable to find a new club after his contract with Russian club Lokomotiv Moscow was terminated in 2014.

FIFA's rules state that if a player terminates his contract without “just cause," the player and any club wishing to sign him are jointly liable for paying compensation to the previous club.

“Those rules hinder the free movement of players and competition between clubs,” the court said in a statement. “The rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club.”

The ruling is seen as crucial because it could make it easier for players to terminate their contracts and join another team — potentially leading to a scenario where bigger clubs could more easily poach players from smaller rivals.

The global players’ union FIFPro, which supported Diarra's case, said the ruling “will change the landscape of professional football.”

However, it could take a couple of years before any changes to the system go into effect as Friday’s ruling is part of a Belgian court case that is still ongoing.

Although the ruling was seen as a defeat for FIFA, the court recognized that the transfer regulations can also be necessary to help maintain stability within professional squads and guarantee the regularity of competitions.

“It is important to clarify that today’s decision does not change the core principles of the transfer system at all,” FIFA chief legal officer Emilio Garcia said.

Diarra's lawyers called the ruling a “total victory.” He signed a four-year contract with Lokomotiv Moscow in 2013 but the deal was terminated a year later after Diarra was unhappy with alleged pay cuts.

Lokomotiv Moscow applied to the FIFA dispute resolution chamber for compensation and the player countered seeking compensation for unpaid wages.

The Court of Arbitration for Sport ruled in favor of the Russian club and the player was ordered to pay 10.5 million euros ($11.2 million). Diarra claimed his search for a new club was hampered by FIFA's rules stipulating any new side would be jointly responsible with him for paying Lokomotiv.

The former Real Madrid player also argued that a potential deal with Belgian club Charleroi fell through because of the FIFA rules, and sued FIFA and the Belgian federation at a Belgian court for damages and loss of earnings of six million euros ($7 million). With the lawsuit still going through Belgian courts, the case was referred to the ECJ for guidance.

In Friday's ruling, the court added that current rules “impose considerable legal risks, unforeseeable and potentially very high financial risks as well as major sporting risks on those players and clubs wishing to employ them which, taken together, are such as to impede international transfers of those players.”

It was not immediately clear what impact the ruling will have on players and leagues more broadly, but some analysts have compared it to the ECJ’s 1995 decision on Belgian footballer Jean-Marc Bosman.

That ruling removed restrictions placed on foreign EU players within national leagues and allowed players in the bloc to move to another club for free when their contracts ended.

That ruling ultimately skewed the player trading market in favor of wealthier clubs in western Europe who could lure free agents with big salaries and avoided paying transfer fees that many smaller clubs relied on.

If FIFA introduces rules making it easier for players to terminate their contracts and join new clubs when they want, the whole system of transfers largely based on transfer fees could be challenged, with clubs less tempted to invest millions in players with more freedom to leave.

But it could also give more power to the richest clubs capable of luring players with gigantic salary offers.

“All professional players have been affected by these illegal rules and can therefore now seek compensation for their losses,” Diarra's lawyers claimed in a statement.

FIFPro added: “Lassana Diarra — like Jean-Marc Bosman before him — has ensured that thousands of players worldwide will profit from a new system which must guarantee respect of their employment rights. This ruling is not only important for Lassana Diarra but all players, both active and retired.”

The Diarra case went through FIFA judicial bodies before the 2016 election of FIFA president Gianni Infantino, who has made it a priority to modernize transfer market rules. FIFA has indicated it is open to a wide-ranging consultation with unions, clubs and leagues to address the courts’ opinions.

FIFA said the ruling “only puts in question two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to consider.”

The court slammed FIFA's rules for restricting and preventing cross-border competition between European clubs.

“The Court recalls that the possibility of competing by recruiting trained players plays an essential role in the professional football sector and that rules which place a general restriction on that form of competition, by immutably fixing the distribution of workers between the employers and in cloistering the markets, are similar to a no-poach agreement," it said.

The court in Luxembourg also suggested FIFA's compensation rules seemed to protect the financial interests of clubs.

“FIFA has been continuously improving that (transfer) system for many years — not for its own benefit,” Garcia said, “but for the benefit of players, clubs, leagues and member associations, to ensure that players can train, be developed and have stability, while safeguarding the integrity of competitions.”

AP soccer: https://apnews.com/hub/soccer

Graham Dunbar in Geneva and Lorne Cook in Brussels contributed.

FILE - In this file photo dated Friday, Sept. 14, 2018, Paris-Saint-Germain player Lassana Diarra during a French League One soccer match against Saint-Etienne at the Parc des Princes stadium in Paris. (AP Photo/Michel Euler, File)

WASHINGTON (AP) — The Senate passed legislation early Saturday to boost Social Security payments for millions of people, pushing a longtime priority for former public employees through Congress in one of its last acts for the year.

The bipartisan bill, which next heads to President Joe Biden, will eliminate longtime reductions to Social Security benefits for nearly 3 million people who receive pensions from work in federal, state and local government, or public service jobs like teachers, firefighters and police officers. Advocates say the Social Security Fairness Act rights a decades-old disparity, though it will also put further strain on Social Security Trust Funds.

The legislation has been decades in the making but the push to pass it came together in the final weeks — and was completed in the final hours — that lawmakers were in Washington before Congress resets next year. All Senate Democrats except one, as well as 23 Republicans, supported the push to bring it to a final vote in the Senate. The final vote was 76-20.

Senate Majority Leader Chuck Schumer, D-N.Y., called it “very important for our retired teachers and firefighters and postal workers and police officers and so many other public servants who deserve their full Social Security benefits.”

The bill repeals two provisions — the Windfall Elimination Provision and the Government Pension Offset — that limit Social Security benefits for certain recipients if they receive retirement payments from other sources such as the public retirement program for a state or local government.

“Social Security is a bedrock of our middle class. It’s retirement security that Americans pay into and earn over a lifetime," said Sen. Sherrod Brown, an Ohio Democrat who has pushed for the proposal for years and will leave Congress after losing reelection.

He added that the current restrictions make “no sense. These workers serve the public. They protect our communities. They teach our kids. They pay into Social Security just like everyone else."

People who currently have reductions in their Social Security benefits under the exceptions would soon see a boost in their monthly payments. But those increased payments would also add an estimated $195 billion to federal deficits over 10 years, according to the Congressional Budget Office.

Social Security Trust Funds were already estimated to be unable to pay out full benefits beginning in 2035, and the change will hasten the program’s insolvency date by about half a year. A typical dual-income couple retiring in 2033 would see an additional $25,000 lifetime reduction in their benefits, according to the nonpartisan Committee for a Responsible Federal Budget.

Many of the bill's opponents acknowledged that the current reductions are not fair to public service retirees, but said they could not support the bill when the entire program faces challenges.

“We caved to the pressure of the moment instead of doing this on a sustainable basis,” said Sen. Thom Tillis, a North Carolina Republican who opposed the bill.

The policy changes will also heap more work on the Social Security Administration when the agency is already at its lowest staffing level in 50 years. The agency currently has a staff of about 56,400 — the lowest level since 1972, according to an agency spokesperson — even as it serves more people than ever. The stopgap government funding bill also being considered late Friday did not include increased funding for the agency, which is currently in a hiring freeze.

Still, Republican supporters of the bill said there was a rare opportunity to address what they described as an unfair section of federal law that hurts public service retirees.

“They have earned these benefits. This is an unfair, inequitable penalty,” said Sen. Susan Collins, a Maine Republican.

GOP supporters of the bill also said they would return to work on larger fixes to Social Security. President-elect Donald Trump, however, has said he will not touch the benefits, even as his administration looks to make deep budget cuts elsewhere.

Senate Republicans are nonetheless working on ideas that would put the program on better financial footing, but also inevitably require a scale-back in benefits. One fiscal hawk, Sen. Rand Paul, pushed Friday for a proposal to gradually raise the Social Security retirement age to 70, although a vote to add that provision to the bill only received three votes in favor of it.

“There's so much riding on us getting this right and having the courage to fix Social Security over the next few years,” Tillis said. “We will rue the day that we failed to do it.”

The Capitol is pictured in Washington, Friday, Dec. 20, 2024. (AP Photo/J. Scott Applewhite)