Executive Summary
- What’s new: On April 30, 2026, the European Court of Justice delivered its judgment in Case C 133/24, CD Tondela and Others, on whether a no-poach agreement between Portuguese professional football clubs during the COVID-19 pandemic breached EU competition law.
- Why it matters: Restrictions on labour mobility have been an enforcement priority in the US, EU and UK. The Court in CD Tondela held that restricting player recruitment can be contrary to EU competition law. But context is important: Stability of player rosters can be considered a legitimate objective in the sports context because it allows participating clubs to maintain a degree of balance and equality of opportunity.
- What to do next: The ruling is the clearest endorsement of a possible “stability” justification for restrictions between sporting clubs in a sports context in the Court’s case law. While COVID-19 is undoubtedly an important backdrop to the outcome, the Court’s reasoning suggests a stability justification might be more widely applicable. It remains to be seen how the principle may be applied to other contentious sports issues, such as salary caps, contractual terms and fees associated with player transfers.
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During the COVID-19 pandemic, the football season was suspended in Portugal. During this time the first and second division clubs of the Portuguese Professional Football Association (“Liga Portuguesa de Futebol Profissional” or LPFP) agreed not to recruit players terminating their employment contracts due to the COVID-19 pandemic.
The question before the European Court of Justice (Court) was whether this “no-poach” agreement was an a restriction of competition “by object” under Article 101 of the Treaty on the Functioning of the European Union (TFEU).
The Court’s Analysis
The Court confirmed its case law that only a narrow set of practices adopted by sport clubs and associations fall outside the scope of EU competition law. Rules on noneconomic aspects of the sport, such as the rules of how the sport is played, fall outside competition law (paras. 30-31).1
In contrast, rules on the professional mobility of players have a direct impact on the conditions for engaging in economic activity and are within competition law (paras. 33-34). Restrictions on recruitment, transfers and mobility are therefore prohibited under EU competition law, notably Article 101 TFEU, if the rules are anticompetitive “by object” or by effect (para. 36).
No-poach agreements will generally be considered automatic — “by object” — infringements without the need to consider their actual economic effects (paras. 40 and 42). But the “by object” categorization requires consideration of the agreement’s content, economic and legal context, and objectives (para. 43).
CD Tondela and Others (CD Tondela) makes clear that market reality is more important than form, even for agreements that do not require a showing of anticompetitive effects. A detailed examination of the economic and legal context is needed for less clear-cut cases (paras. 47-48).
The Court held that a no-poach agreement, even if limited to COVID-19, “constitutes a manifest restriction of a competitive parameter which plays an essential role in high-level sport” (para. 53). However, the Court also made clear that the need for professional clubs to compete on relatively equal terms can be a justification, which builds upon earlier cases.2
It stated that:
- Clubs’ ability to compete economically, including via player recruitment, is dependent on their ability to participate in a sporting competition (para. 59).
- Sporting competitions “depend on maintaining a balance and on preserving a certain equality of opportunity as between the participating professional football clubs, given the interdependence that binds them together” (para. 60) and “the principle of sporting merit, [which] presupposes that the results achieved by all of the clubs involved in the different phases of a given competition may be validly compared” (para. 84).
- As a result, “it may be legitimate for a sporting association to seek to ensure, to a certain extent, the stability of the composition of the player rosters […] during a given season — for example by proscribing the unilateral termination of employment contracts during the season — or during a given year” (para. 64).
This could justify temporary measures to secure stability during the COVID-19 pandemic. But the Court appeared to contemplate the stability justification as having broader application.
The Court noted that prohibiting unilateral terminations of employment contracts during the season, except for just cause, pursued the pro-competitive objective of ensuring the stability of the player rosters (paras. 85-86).
In the absence of suitable measures, players who unilaterally terminate their contracts could be freely hired by other clubs midseason, which “would have inevitably and significantly altered the composition of the various teams involved, thereby undermining the integrity of competition” (para. 73, see also paras. 76, 82).
The Court left it to the referring Portuguese court to determine whether the pro-competitive objective of roster stability is such that the anticompetitive no-poach requirement can no longer be considered sufficiently harmful so as to justify a “by object” qualification (paras. 88-89).
Without reaching a decision on this point, the Court further suggested that restrictions adopted by a sports association are more likely to be considered permissible than restrictions adopted directly by the clubs (para. 70). Nevertheless, the Court accepted a situation where the restriction was adopted by the clubs but with the endorsement of the association (para. 72). The urgency posed by the pandemic may have played a role in this approach (para. 76).
The Court confirmed that “by object” restrictions can only be justified on economic grounds under Article 101(3) TFEU. In contrast, restrictions that are not sufficiently harmful so as to warrant “by object” treatment can also be justified by noneconomic grounds — so-called legitimate objectives of general interest.
In this respect, the Court indicated that ensuring the proper conduct of sporting competitions — including rules on time limits for the transfer of players during a competition and those intended to ensure the maintenance of a certain degree of stability in clubs’ player rosters — qualifies as a legitimate objective of general interest (para. 96).
The Court left it to the referring Portuguese court to determine the suitability, necessity and proportionality of a no-poaching agreement (paras. 98-99).
Takeaways
CD Tondela confirms that no-poach agreements among professional football clubs are not immune from competition law scrutiny, even when concluded in exceptional circumstances such as a pandemic. At the same time, the judgment builds upon previous Court rulings in seeing stability of player rosters as relevant contextual factors.
These characteristics may take the no-poach agreement outside the “by object” framework and possibly outside the Article 101 TFEU prohibition altogether.
Sports associations and clubs may want to carefully calibrate any measures restricting player recruitment, ensuring they are proportionate to their legitimate objectives and do not go beyond what is necessary. Clubs and associations should also be mindful that no-poach measures adopted directly by clubs will be subject to particularly close scrutiny if not supported by the association.
Knowledge Management intern Rayhane Ricci contributed to this article.
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1 The scope of the competition law carve-out of noneconomic aspects of sports remains the subject of debate, as reflected, e.g., by the ongoing investigation of the Belgian competition authority into technical standards in cycling, notably gear ratio.
2 See Case C-333/21, European Superleague Company SL v FIFA and UEFA, para. 235 and Case C-650/22, FIFA v BZ, paras. 100 and 102.
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