In October 2024 the Court held that a governing body's rules on compensation, sporting sanctions and the transfer certificate are precluded by free movement unless shown to be necessary and proportionate, and amount to a decision by an association of undertakings prohibited by Article 101(1).
A sports governing body is not above EU law
On 4 October 2024 the EU Court of Justice ruled on the transfer rules of the body that regulates football worldwide. It tested those rules against two parts of the EU treaties: the right of workers to move freely between countries, and the ban on agreements that restrict competition.
The result is what matters for anyone advising a club, an agent or a player. Rules written by a governing body are measured against the treaties like anyone else's, and it is the governing body that has to justify them.
The three rules in question
The Court looked at three connected rules that apply when a professional player is treated as having ended their contract without good reason:
The new club pays too. The player and the club that signs them are both liable for the compensation owed to the old club — worked out on criteria the Court described as sometimes vague or discretionary, sometimes with no real connection to the employment, and sometimes disproportionate.
A sporting penalty on the new club. If the player signs during a protected period under the old contract, the new club is banned from registering new players for a time — unless it can prove it did not push the player to break the contract.
The transfer certificate is withheld. Simply because a dispute exists, the old club's national association does not issue the international transfer certificate the player needs to be registered at the new club. So the player cannot play.
What the Court decided
On free movement of workers, the Court held that such rules are not allowed — unless it is shown that, as they are interpreted and applied in the EU, they go no further than necessary to keep club competitions running properly while keeping some stability in squads.
On competition law, it held that such rules are a decision by an association of businesses, prohibited outright, and cannot be exempted unless every condition for an exemption is proved with convincing arguments and evidence.
Two things in that wording carry the practical weight. The aim itself is accepted as legitimate — the ruling does not say squad stability cannot be protected, it says the means have to be shown to be necessary and proportionate. And the burden of showing it sits with the body defending the rules, not with the player or club challenging them.
What it changes in practice
Compensation formulas have to be defensible. Vague, discretionary criteria with no connection to the employment are exactly what the Court picked out. A compensation clause you cannot explain by reference to the contract itself is exposed.
Automatic consequences invite scrutiny. A penalty that applies unless the new club disproves something, and an administrative step withheld just because a dispute exists, both bite before anyone has decided who is right.
Where a dispute is heard matters. This ruling reached the Court through a national court asking it a question — which is how association rules get tested against the treaties in the first place. So the forum is part of the strategy, not an afterthought.
Where to be careful
The judgment interprets the treaties. It does not itself rewrite any governing body's rulebook, and what has been changed since in response is a question of fact to check against the current rules rather than assume. And whether a particular clause survives depends on how the rules are interpreted and applied in practice — the Court left that to the national court.
For a club or player in Latvia, the national procedure, the employment law that applies and the governing body's current regulations are the parts to confirm locally. What the judgment settles is the standard those rules have to meet.