EU Judges Leave Final Decision on Portuguese Football Hiring Pact to National Court

The case centers on a policy introduced in spring 2020, when professional football in Portugal had come to a standstill amid the global health emergency. As uncertainty spread over contracts, league schedules and club finances, teams from Portugal’s first and second divisions agreed not to pursue players who had ended their contracts during the shutdown, according to Courthouse News.

The arrangement was designed to avoid a situation where clubs with stronger financial resources could use the disruption to quickly strengthen their squads before competition resumed. But Portuguese competition regulators later concluded that the agreement crossed legal boundaries by limiting clubs’ ability to recruit and reducing opportunities for players in the labor market, per Courthouse News.

After the national competition authority suspended the policy and issued penalties, the dispute was referred to the Court of Justice of the European Union for guidance on how such agreements should be treated under EU competition rules.

In Thursday’s ruling, judges in Luxembourg said agreements that prevent employers from hiring workers can amount to one of the clearest forms of anti-competitive conduct, particularly in industries where talent acquisition directly affects performance. In football, the court noted, recruiting players is not a side issue but a core element of how clubs compete, according to Courthouse News.

By limiting where certain players could sign, the agreement may have narrowed their professional options while also reducing competitive pressure between clubs for available talent.

At the same time, the court declined to say the arrangement was automatically unlawful. Judges pointed to the extraordinary conditions surrounding the pandemic, including the suspension of the season, expiring player deals and fears that wealthier teams could build stronger rosters before competition restarted.

The court noted that the agreement was intended to preserve “the stability of the composition of the player rosters” while football operations remained frozen.

Still, the judges stressed that exceptional circumstances do not create blanket immunity from antitrust law. “The occurrence of an event such as the Covid-19 pandemic is not per se such as to justify making an exception” to EU competition rules, the court said.

Instead, national judges must now assess whether the restriction went beyond what was reasonably necessary given the disruption facing the sport.

Legal analysts said the ruling confirms that labor-market restrictions remain under close scrutiny in Europe, even when they arise during extraordinary events.

Francisco Marcos, a professor at IE Law School, said the judgment reinforces long-standing competition principles rather than introducing a new legal standard. “A no-poach agreement in football can look like a cartel — and even a pandemic doesn’t automatically save it,” he said.

Portugal’s competition authority also welcomed the decision. Teresa Duarte, communications adviser at Autoridade da Concorrência, said regulators “very much welcome the court’s clear confirmation that so-called ‘no-poach’ agreements constitute restrictions of competition by object,” according to Courthouse News.

Not everyone viewed the outcome as a clear win for regulators. Miguel Sousa Ferro, a partner at Sousa Ferro & Associados and professor of EU law at the University of Lisbon, said the authority may still face difficulties defending its original decision when the matter returns to Portuguese court.

“The AdC is facing an uphill struggle to get its decision confirmed after this ruling,” he said. “But the outcome is still up to the national court and depends on the evidence in the case.”

The dispute now moves back to Portugal’s Competition, Regulation and Supervision Court, which will determine whether the pandemic-era agreement amounted to an unlawful restraint on competition or a narrowly tailored response to an unprecedented crisis in professional sport.

Source: Courthouse News