German Football Association: Antitrust Law limits Regulation of Player Agents

On 2 February 2016, in a suit brought by a commercial player agency against the German Football Association (“DFB”), the Court of Appeal in Frankfurt ruled that the DFB’s regulations on player agents are in part disproportionate and violate antitrust law.

The court invalidated the following provisions of the DFB regulations on the ground that they restrict competition without legitimate justification:

• The DFB may no longer use clauses that: require agents to submit to the complete authority of the football associations; require agents to submit an extended certificate of good conduct; or limit agents’ rights to receive lump sum payments based on a percentage of the transfer fee.
• The Court of Appeal held that the DFB’s requirement that agents comply with the statutes and jurisdictional requirements of all football associations (namely FIFA, UEFA, DFB and its member associations) is disproportionate. According to the Court, it would be impossible for the agents to obtain reasonable knowledge of the multifarious body of regulations; the Court itself identified 35 different statutes and 30 different jurisdictions.
• The Court of Appeal held that agents are not required to submit an extended certificate of good conduct (as required under the German Federal Central Criminal Register Act) because it is not part of player agents' job to come into regular contact with children or juveniles.
• The DFB is not allowed to prohibit agents from receiving lump sum remuneration based on a certain percentage of the transfer fee. In the opinion of the Court of Appeal, this type of remuneration is considered intermediation.

However, the Court of Appeal held that some of the challenged DFB requirements were permissible under antitrust law, namely:

• Contrary to the court of first instance, the court ruled that clubs and football players may not pay agents for the intermediation of an underage player. According to the court, this prohibition is necessary to prevent transfers of underage players for only financial reasons and in particular transfers of foreign young players who have no stable perspective.
• The DFB regulations requiring players and/or clubs to disclose all contracts, agreements and arrangements with agents, including the complete details of all agreed remuneration, are valid because they proportionately facilitate the goal of transparency and plausibility in terms of player recruitment activities.
• The DFB provision prohibiting payments between clubs in connection with a transfer was also upheld because, according to the court, there is a legitimate goal to counteract any influence agents exert on player transfers merely for financial purposes.

Joining the ranks of last year’s cases Pechstein and International Handball Federation, the DFB judgment once again shows that sport associations are also subject to antitrust law if they seek to regulate economic issues.

If you would like more information, please contact Christoff Henrik Soltau.