Fifa, world football's governing body, and Uefa, its European counterpart, have been told by the European Commission that they must oversee an end to the transfer fee system and nationality restrictions within six weeks - or face the threat of fines and court action.
The Commission reminded the football authorities that both practices, which were declared illegal in the last month's Jean-Marc Bosman ruling by the European Court of Justice, violated European Union law barring agreements that restrict competition.
The Commission also said that it might also investigate relations between European clubs and the rest of the world, and national transfer systems. This is a major new development which will alarm football administrators worldwide, as the Bosman ruling only dealt with dealings between clubs in different EU countries. That judgment was based on an EU treaty article guaranteeing workers the right to move freely within the Union. The Commission's warning comes under separate rules giving it the authority to investigate cartel-like activity.
The Commission has told Uefa and Fifa, in a letter sent this week, that it would open formal legal proceedings against both bodies, and lift their immunity from fines, if they do not give a satisfactory response within six weeks. The Commission has the authority to fine those violating competition rules up to 10 per cent of their annual turnover.
The Commission confirmed that transfer fees and nationality restrictions also violate rules governing the European Economic Area, which groups all the "Common Market" countries, Iceland, Liechtenstein and Norway - and the Comission has rejected a request made last year by Fifa and Uefa for exemption from EU competition rules.
"The cross-border transfer system of football players within the EU could not be be maintained," Sir Leon Brittan, the EU Trade Commissioner, told the European Parliament in Strasbourg. "Nor could the rule... that football clubs may field only a limited number of professional players who are citizens of other [EU] member states."
Uefa was at odds with the Commission this week when it declared it would maintain its "three-plus-two" rule - which limits teams to fielding a maximum of three foreign players and two "assimilated" foreigners - in European club competitions. An assimilated player is one who has lived in the country for five years and has played in that club's youth team. Uefa claimed the Bosman ruling allowed it to maintain that policy, but Brittan a former British Home Secretary, said the Commission has rejected that argument.
Brittan added that the Commission was ready to assist the football authorities in devising new policies for distributing wealth between bigger and smaller clubs - perhaps through income from the Champions' League or television rights.
British clubs had thought that the Bosman ruling only applied to cross- border transfers, and that Britain's internal transfer market was likely to remain unscathed. That may still be the case - British courts will have a say on the domestic significance of yesterday's developments - but the Commission's desire to look beyond the Bosman judgment and use all its powers to influence football's business practices will send shock waves through the game.Reuse content