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  • Writer's pictureJoseph Pious

Implementation of FFAR and AIFF Football Agent Regulations; Where does Indian Competition Law stand?

Introduction

In a move to re-regulate football agents internationally, FIFA revoked the 2015 Regulations on Working with Intermediaries (“RWWI”) and proposed a new set of Football Agent Regulations (“FFAR”) [1] which had been planned to come into force on 1 October 2023. While the RWWI took a decentralised tactic towards regulating agents with no systematised licensing system and service fee cap mandates, the FFAR brings in a licensing requirement for agents with a maximum service fee governed through a market monitoring system. However, the scope of these regulations extends only to representation agreements of an international dimension.


Those agent services, transfers, or transactions that fall outside the purview of the international dimension will be governed by the National Football Agent Regulations of which the client is a domicile. The FFAR mandated the Member Associations to implement and enforce such National Football Agent Regulations by September 30, 2023. The Model for National Football Agent Regulations published by FIFA [2] mandated the member associations to keep the new regulations consistent with the FFAR, incorporating certain articles including the mandatory service fee cap under Article 15.


However, since its inception, the FFAR has encountered considerable controversy, prompting the initiation of numerous legal challenges that question the legitimacy of both the FFAR and its implementation. These challenges specifically raised concerns about FIFA's authority in regulating the football agent industry and the compliance of the FFAR with competition law. The primary issue revolves around the fee cap provided for in the FFAR which restricts agents from negotiating their fees from the transfer of a player and acting freely in competition.  

 

Legality of FFAR in various Jurisdictions


In Germany, the Mainz District Court in April 2023 referred a preliminary ruling on the legality of the FFAR to the European Court of Justice (ECJ). Recognising the potential anti-competitive implications of the FFAR and the urgency of the issue, the Dortmund District Court issued an injunction in May, preventing the German Football Association (DFB) from enforcing the regulations until the ECJ made a decision. The Dortmund Court Order contended that the FFAR, beyond being a purely sporting rule, contained elements contrary to competition law as outlined in Article 101 and Article 102 of the Treaty of the Functioning of the European Union [3]. However, the Court of Arbitration for Sport (CAS) upheld the legality of the regulations in July 2023, providing a comprehensive assessment of the FFAR's validity under EU Competition law and FIFA's jurisdiction in regulating football agent activities [4].


On November 6, 2023, the Commercial Court of Madrid imposed provisional measures against the FFAR. These measures directed FIFA and the Spanish Football Federation (RFEF) to abstain from implementing the commission cap. A yet-to-be-published decision from the English Arbitration Tribunal determined that the service fee cap did not align with competition law in England, enjoining the English Football Association (FA) from incorporating the cap into its National Football Agent Regulations [5]. Despite the CAS ruling in favour of FFAR compliance with European competition law, civil courts in Germany and Spain, reached a contrary conclusion, asserting that the FFAR violated European competition law.


The ultimate determination of the FFAR's compatibility with European competition law rests with the ECJ. However, the resolution of this matter is anticipated to take some time. Furthermore, any decision from the ECJ will have applicability solely within EU member countries, leaving room for divergent regulations on player agency services among non-EU nations, similar to the English Arbitration Tribunal’s decision. Consequently, the FFAR may be effective only in specific jurisdictions and not in others.

 

All India Football Federation Football Agent Regulations


Agents in India were governed by the regulations on Working with Intermediaries (2017) enacted by the All India Football Federation (AIFF), the governing body of football in India. The new FFAR meant the AIFF had to implement new regulations to govern the occupation of football agents in India. It published the AIFF Football Agent Regulations [6] on October 1, 2023 in compliance with the FFAR. The new regulations stipulate an eligibility criterion for agents in India. This includes obtaining a license from FIFA in accordance with the FFAR and getting registered with the AIFF in accordance with the AIFF Statutes. However, these regulations do not provide for any exemption to formerly licensed agents pursuant to previous editions of agent regulations. That is, for providing services as a licensed agent in India, every person is required to qualify the Agent Examination conducted by FIFA.


The new regulations also put a cap on the service fees of agents, thereby placing a blanket limit on their income. AIFF has consistently adopted FFAR’s same percentage cap on the service fee keeping the same standard annual player remuneration at USD 200,000, thereby making no difference in the scope of these regulations from the FFAR having an International Dimension. [7]


In light of the legal issues ongoing globally over the anti-competitive aspect of the FFAR, AIFF has implemented the new national regulations making any no significant deviation from the FFAR, and ignoring the competition law of the country. To enforce a complete shift from an unlicensed agent system, especially in the not-so-professional football industry of India is a challenging task. However, the AIFF Football Agent Regulations is nothing but an impetuous draft failing to keep a balance with the Competition Act, 2002.


Competition Law in India and its scope over Sports Governing Bodies

The Competition Act, 2002 (The Act) applies universally across all sectors and industries within India, with the Competition Commission of India (CCI) holding the responsibility of promoting and safeguarding competition in diverse markets. Sections 3 and 4 of the legislation specifically promote fair trade practices while prohibiting anti-competitive agreements and the abuse of dominance. Section 3 explicitly prohibits “anti-competitive agreements” and mandates that “no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of the production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India". [8]


Section 4 of the Act mandates that “no enterprise or group shall abuse its dominant position” [9]. A dominant position is explained under the Act as "a position of strength possessed by a firm in the relevant market”. That is, an enterprise is deemed to have a dominant position when it can operate independently of its rivals and exert influence over both competitors and customers in its favour.


This raises the question as to whether The CCI can exercise its regulatory powers over Sports Governing Bodies (SGBs). The Indian Competition Commission answered the same in the case of Surinder Singh Barmi v. Board of Control for Cricket in India [10]. The Commission determined that the Board of Control for Cricket in India (BCCI) held a dominant position in the market concerning the organisation of private professional cricket leagues/events in India. The commitment made by BCCI in its IPL Media Rights agreement with the broadcasters of the Indian Premier League (IPL), stating that it would not organise, sanction, recognise, or support another professional domestic Indian T20 competition competitive to the league during the rights period, was identified as an exertion of regulatory authority in the pursuit of a commercial agreement. This action by BCCI was deemed to be in violation of Section 4 of the Act.


Part 2 to be released next week...


Bibliography


[3] Preliminary injunction granted by the District Court of Dortmund (Landgericht Dortmund) in the procedure 8 O 1/23 (Kart), https://digitalhub.fifa.com/m/2f039bcadfd47101/original/20230524-LG-Dortmund-Urteil-EN.pdf


[4] CAS 2023/O/9370, Professional Football Agents Association (PROFAA) v. FIFA, https://www.tas-cas.org/fileadmin/user_upload/CAS_Award_9370.pdf


[5] The Guardian, Football agents celebrate FA tribunal victory in fight against Fifa regulations (Nov 30,2023), https://www.theguardian.com/football/2023/nov/30/football-agents-celebrate-fa-tribunal-victory-in-fight-against-fifa-regulations



[7] Article 9.2, The AIFF Football Agent Regulations, 2023; The Football agents fee while representing an Individual or an Engaging Entity is capped at 5 %, if an Individual’s annual remuneration is less than USD 200,000 (or equivalent), and the annual excess above that amount shall be subject to a service fee cap of 3%. The service fee is capped at 6% if they are representing both an Engaging Entity and an Individual (permitted dual representation).


[9] Section 4 of the Competition Act, 2002


[10] Case No. 61 of 2010 of Competition Commission of India, the judgement can be accessed from here,  https://www.cci.gov.in/images/antitrustorder/en/6120101652434795.pdf


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