The Laurent Piau case of the ECJ on the Status of Players' Agents.

• Author: Martins, Roberto Branco

1. Introduction

   On 23 February 2006, the European Court of Justice (ECJ) decided on appeal against a decision of the Court of First Instance in the so-called Laurent Piau case. Laurent Piau is a French players' agent who lodged a complaint related to the FIFA Players' Agents regulations with the European Commission. The object of this contribution is to describe the course and outcome of this case. After presenting the judgement of the ECJ, I will explore whether a legal basis exists for FIFA to draft and control the current Players' Agents regulations: was the judgement in accordance with the law? Finally I will research possible alternatives for regulating the profession of Players' Agents, alternatives that promote legal certainty and the limitation of a new legal challenge to the FIFA Players' Agents regulations.

2. Laurent Piau v. FIFA and the European Commission

   Piau's initial complaint--and the starting point for further litigation--of 23 March 1998 focussed on the content and objectives of the FIFA Players' Agents regulations and their incompatibility with the Articles 49 and further of the EC Treaty (free movement of services). Piau objected to the fact that he could only carry out the profession of Players' Agent on the condition that he possessed a compulsory licence. He particularly objected to the necessity of passing a written exam before being able to receive such a licence. His complaint also concerned the necessary financial deposit that a (starting) players' agent needed to make as a type of insurance, FIFA's power to sanction and the fact that the FIFA Players' Agents Regulations did not foresee the possibility of appealing against a FIFA sanction or decision in court. (1) The European Commission received the complaint and intervened.

   The European Commission made the abovementioned grievances clear to FIFA in a statement of objections. (2) FIFA then changed its regulations in such a way that the European Commission authorised the use of the new Regulations now that they were compatible with European Union law. FIFA abolished the compulsory deposit of a considerable amount of money and introduced the conclusion of insurance instead. FIFA also introduced a code of conduct; a model-contract for players' agents and a method for calculating the fee to be paid to the agent. (3)

   Piau upheld his complaint however, and sought a decision from the European Commission on 28 September 2001. (4) He added to his initial complaint the aspects that, in his view, restricted competition: the code of conduct, the model-contract and the fee calculation method.

   The Commission acted upon this complaint as if it was related solely to an action based on Regulation No. 17, therefore only making it possible to approach the complaint from a competition law perspective or, more specifically, using the perspective based on Articles 81 and 82 of the EC Treaty. (5)

   In contrast to Piau's contention, the European Commission did not think the amended FIFA Players' Agents Regulations opposed Article 81 of the Treaty and decided that the Regulations were legitimate.

   Piau then appealed against this decision before the European Court of First Instance (CFI). In most respects the CFI upheld the decision of the European Commission. In its judgement, the CFI decided on the rule-making action of FIFA and the compatibility of the FIFA Players' Agents Regulations with competition law. It concluded as follows: (6)

   "Thus the need to introduce professionalism and morality to the occupation of players' agent in order to protect players whose careers are short, the fact that competition is not eliminated by the licence system, the almost general absence (except in France) of national rules, and the lack of a collective organisation of players' agents, are circumstances which justify the rule-making action on the part of FIFA.

   Possible abuse of a dominant position by FIFA: The Court of First Instance disagrees with the Commission and considers that FIFA, which constitutes an emanation of the clubs, thereby holds a dominant position in the market of services of players' agents. Nevertheless, the FIFA regulations do not impose quantitative restrictions on access to the occupation of players' agent which harm competition, but qualitative restrictions which may be justified, and do not therefore constitute an abuse of FIFA's dominant position in that market".

   Understandably, Piau was not satisfied with this decision and he appealed again, this time before the European Court of Justice. His claims were that the Court should set aside the judgment and annul the decision of the European Commission. In its judgment of 23 February 2006 the Court grouped the pleas and arguments of Piau in three parts: (7) a violation of Article 81 of the EC Treaty; a violation of Article 82 of the EC Treaty; and the violation of other Treaty articles or general principles of law. Piau doubted whether the Court of First Instance had been accurate on the issue of exempting the FIFA regulations from the application of competition law under Article 81 sub 3 EC Treaty. Piau argued that the Court of First Instance had not been able to prove the necessity of such an exemption and that a legal basis for such a decision was lacking. He questioned the conclusion that the FIFA regulations did not impose a quantitative effect. Piau was of the opinion that the Court of First Instance did not use any factual evidence for its decision. The Court of Justice disagreed with Piau. As to the violation of Article 81 the Court first stated that was not in its power to judge on the Court of First Instance's appreciation of facts or evidence; therefore this objection was not be considered by the Court. The decision of the Court of First Instance was upheld and no new appreciation of the facts was carried out.

   The view of the Court of First Instance therefore still stands: it had been proven by FIFA that fair competition is not eliminated. Evidence for this was the fact that FIFA recorded only 214 registered Players' Agents in 1996, when the initial Regulations entered into force, whereas there were around 1,500 Players' Agents in 2003; so the Regulations had a qualitative effect instead of being a quantitative restriction. (8)

   Piau also complained about the fact that the Court of First Instance erred in law as to the non-existence of a Community interest in the case. Unfortunately these arguments were considered to be new arguments upon which the Court of Justice could not decide in the appeal procedure. With regard to Article 82 of the EC Treaty, Piau agreed with the Court of First Instance that a dominant FIFA position exists, but in addition to this he thought that the Court should have ordered a more thorough research into the Regulations' abusive effects. The Court of Justice applied the definition of the abuse of dominance as defined in the Hoffmann La Roche case (9) and concluded that Piau's plea was unfounded. The Court referred to the above-mentioned fact that FIFA did not impose a quantitative restriction but only a qualitative restriction on the profession of players' agent.

   Piau's other complaints focused on the abuse of Articles 39 (free movement of workers) and 49 (free movement of services) EC Treaty. The European Commission did not react to Piau's complaints that were based on these Articles and Piau was of the opinion that this passive attitude resulted in a breach of Article 253 of the EC Treaty. According to this Article the European Commission must give their reasons for decisions, and in the Piau case it had not acted in accordance with this Article. Unfortunately for Piau, the Court of Justice did not share this view. The European Commission had acted on the basis of Regulation No. 17, therefore it only needed to focus on competition law. It did not abuse its rights by not judging and thus not giving its reasons for Piau's complaints on the basis of other than fair competition law articles.

3. The legal basis that allows FIFA to regulate the profession of Players' Agents

   The CFI raised an interesting question in its judgement dealing with the authority of FIFA to regulate the profession of Players' Agents. The CFI mentions specifically in considerations 74-79 of the judgement that "regulations which govern a profession are in principle only legitimate when drawn up by a public authority." An exemption to this rule may arise when an organisation receives a formal mandate, based upon public law. (10) Apart from this, an association has the freedom to draw up rules and regulations for its internal organisation. One final aspect that could lead to an exemption to the rule that a public authority should regulate a profession, is that such regulations could fall under the specificity of sport principle. I shall elaborate on these specific aspects in order to assess whether the CFI came to the right conclusion in the Piau case.

   3.1. The existence of a formal mandate based upon public law

   FIFA has drafted and adopted the Players' Agents Regulations unilaterally. FIFA is not a body of public authority. FIFA is an association of associations, with the national football associations as its members, and its Regulations concerning the profession of players' agent in football, geographically speaking, cover the entire world.

   Thus a formal mandate to regulate the profession of an agent should have been given to FIFA by an international organisation, composed of representatives from national public authorities, through their official and formal channels. Such a mandate does not exist.

   3.2. Internal organisation of FIFA

   The regulations of FIFA are binding upon its members and must be in conformity with national and international public law. The members of FIFA are the national football associations, therefore the FIFA regulations are binding upon these national associations and they 'trickle down' to clubs and players due to their compulsory membership of their national...