By Tom Serby of Anglia Ruskin University Law School, Cambridge, United Kingdom
June 2015 the Court of First Instance in Brussels confirmed its ruling to the claimants (football agents Daniel Striani and others, and football supporters including “Manchester City FC Supporters clubs”) in their case against UEFA and the Belgian Football Association
. The court granted the interim measure sought, namely a prohibition on UEFA activating the second phase of the ‘break-even’ rule of the Financial Fair Play Regulations, under which as from the 2015/16 season football clubs would have been limited to a Euro 30 million, rather than Euro 45 million deficit. In addition the Court made a reference under TFEU art 267 to the European Court of Justice for a preliminary ruling on whether the Financial Fair Play Regulations violate the EU fundamental freedoms of free competition (arts 101 and 102 TFEU), free movement of capital and freedom to invest (art 63 TFEU) and free movement of workers and free movement of services. Geey described the ruling: “as a relative victory for Striani to the extent that the Belgian court has not dismissed the case out of hand and decided that it is substantive enough for the European Court of Justice to rule on the principles
UEFA announced it would appeal and commented that "Since an appeal automatically suspends the ruling of the lower court, it means that Uefa can proceed with the next phase of implementation of FFP. Uefa remains fully confident that FFP is entirely in line with EU law, and that the European Court will in due course simply confirm this to be the case.
What is the likely outcome of the reference to the European court?
Competition law has been interpreted by the Court of Justice with contextual nuance. Weatherill
likens the attempt to reduce footballers’ wages through the FFP Regulations to the collective agreements between organisations representing employers and workers considered by the European Court in the Albany case
; commenting that had the court opened up these agreements to competition law it would have ‘unleashed a troubling dynamic in labour market regulation’
. On that occasion the court accepted the anti competitive element but noted that social policy objectives would be undermined if such collective agreements aimed at improving conditions at work and employment were held to contravene competition law.
According to Barnard recent decisions of the CJEU suggest that ‘. . . regulatory autonomy is being undermined to the benefit of greater market integration’,
and sport is not immune from this.
Although sport is considered ‘special’ when European law is applied, clearly there is precedent (the Bosman
case) for the European court to overrule UEFA, and to conclude as did Advocate General Lenz in the context of UEFA’s then transfer rules that they are unlawful as ‘the rules …restrict the possibilities for the individual clubs to compete with each other by engaging players…[and the rules which] replace the normal system of supply and demand’
are not indispensable to achieve their objective. Lenz even added that he did not believe the then transfer rules to be a barrier to access to the market only because ‘Anyone who has sufficient money can therefore create a top team out of a weaker or even insignificant one’,
whereas the primary effect the FFP Regulations is to make this impossible.
The most likely outcome of the ongoing litigation is a gradual political compromise whereby UEFA adjusts the Regulations whether through amendments to the Regulations themselves, or to their enforcement. This process has already commenced. On June 30th
, subsequent to the Brussels court ruling, UEFA announced that its Executive Committee had approved the 2015-18 UEFA Club Licensing and Financial Fair Play Regulations
. According to UEFA the amended Regulations came about as a result of consultation with the European Club Association through a dedicated UEFA-ECA Working Group; (the court’s ruling postdated by over four months the two days of submissions and legal argument made to the court in February, allowing time for UEFA to prepare a considered response). UEFA president Michel Platini, commented that under the amended Regulations by allowing clubs to seek approval from UEFA for a so called “voluntary settlement” under which they would be granted permission to move beyond the strict limits of the ‘break-even’ rule, the revised amendments provide for football clubs to move from “austerity to sustainable growth”, and exceptions would be made for clubs in countries where the market is considered to have structural economic deficiencies.
No doubt, as the court case moves through appeal and onto the European Court of Justice, there will be time for more comment and indeed more changes to the Financial Fair Play Regulations.
Weatherill, S (2013) ‘The legally ambiguous status of ‘Financial Fair Play’’ Soccernomics http://www.soccernomics-agency.com/?p=469
Case C-67/96 Albany International
Barnard, C ‘Derogations and Justifications’ Ch 6 in Bernard, C “The Substantive law of the EU: The four Freedoms”
Lenz, Advocate General Opinion Bosman para 262 http://curia.europa.eu/juris/showPdf.jsf?docid=99458&doclang=EN
N 7 para 263