The end of the FIFA Agents Cap and the beginning of a less restrained standard of competition review in sport?

The FA has just published the long-awaited written reasons[1] in one of the most significant sports law cases for a while: the successful legal challenge brought by football agents (CAA Base, Wasserman, Stellar and Areté Management) against The FA’s plans to introduce the new FIFA Football Agents Regulations (‘FFAR’). Nick De Marco KC, who was part of the wider legal team behind the challenge, discusses the decision and its likely future impact on the future of the FFAR as well as sports law more generally.

The agents’ challenge focussed on four key parts of the new FFAR (the ‘Proposed Rules’):

1. the most controversial 3% fee cap on agents’ commission (‘Fee Cap’),
2. the rule that agents’ commission must be paid over the life of a player’s contract (‘Pro Rata Payment Rules’),
3. the rules prohibiting payments being made on behalf of the player (‘Client Pays Rules’) and
4. the rule against dual or multiple Representation (‘Dual Representation Rule’).

The agents won with respect to the first two rules (the Fee Cap and the Pro Rata Payment Rules). Their challenge to the other rules did not succeed. The Arbitral Award is final and binding. There is no appeal. It means the most controversial aspect of FIFA’s regulations, the Fee Cap (as well as the Pro Rata Payment Rules) are unlawful in English law and cannot be enforced by The FA in England. The reasoning strongly suggests, as some other European courts (in Germany and Spain) have already found at a preliminary stage, that the Fee Cap is unlawful under European competition law. The short point is that, in the author’s opinion,  FIFA’s Fee Cap is now most certainly dead, given it is unlikely to be enforceable in most of the biggest football transfer markets in the globe.

The written reasons are both thorough and lengthy (110 pages), from a most distinguished Tribunal with significant experience and seniority: two former Justices of the Supreme Court, Lord Collins, the Chair, and Lord Dyson (who is also a former Master of the Rolls and Head of Civil Justice) along with Christopher Vajda KC, a former Judge at the Court of Justice of the European Union. For a proper understanding of the decision, it is strongly recommended to read the written reasons in full. This article summarises the key findings and wider lessons for sports lawyers.

• The basis of the legal challenge
  • Do the Proposed Rules prima facie (“on first impressions”) infringe competition law?
  • Do the Proposed Rules escape competition rules under the Wouters/Meca-Medina principle?
  • Do the Proposed Rules prevent, restrict or distort competition by object of effect?
  • Are the Proposed Rules exempt pursuant to Section 9 of to the 1998 Act and/or objectively justified?
  • Does The FA have a dominant position in one of more relevant markets and if so would the Proposed rules amount t an abuse of that dominant position?
  • Whether the Proposed rules are an unreasonable restraint of trade at common law?
• Comment
  • End of the fee cap
  • Key points for FIFA and The FA’s loss
  • Survival of the common law restraint of trade jurisdiction
• Conclusion