Moving the goalposts: Tondela – no-poach agreements and sporting rules
On 30 April 2026, the Court of Justice of the European Union (ECJ) delivered its judgment in Tondela, the first ruling of the EU's highest court on the application of competition law to a standalone no-poach agreement. The ruling is also significant for sporting rules, adding to the growing body of case law from the ECJ concerning the application of the EU competition rules to sport.
What you need to know
- The ECJ has confirmed that no-poach agreements will generally restrict competition by object under Article 101 of the Treaty on the Functioning of the European Union (TFEU).
- However, context is key: specific circumstances can prevent a by-object classification – here, the Covid-19 pandemic together with specific characteristics of sport.
- The more obviously harmful a restriction is, the less contextual analysis is required to determine whether it is a by-object restriction.
- The Wouters / Meca-Medina test does not apply to restrictions by object. Where that is not the case, the test provides a way for a restriction to avoid the prohibition in Article 101(1), provided it pursues a legitimate objective in the public interest, and is necessary and proportionate to achieving that objective.
- Ensuring the regularity of sporting competitions is a legitimate objective in the public interest, which includes rules aimed at maintaining of a certain degree of stability in player rosters.
Background
On 30 April 2026, the ECJ handed down its judgment in Tondela (Case C-133/24). This is the first ruling of the EU's highest court on the compatibility of a standalone no-poach agreement with Article 101 TFEU. It comes just under a year after the European Commission's first fine in respect of a no-poach agreement in its Delivery Hero / Glovo decision (see our June 2025 update).
The Tondela case concerns an agreement concluded among Portuguese football clubs, with the support of the Portuguese Professional Football League (LPFP), during the Covid-19 pandemic. The clubs agreed not to recruit players who unilaterally terminated their contracts due to pandemic-related difficulties (Agreement). The Portuguese Competition Authority (AdC) fined the clubs and the LPFP, finding that the Agreement breached Article 101 and its national equivalent.
Broadly following the opinion of its Advocate General, Nicholas Emiliou, the ECJ held that no-poach agreements are comparable to horizontal agreements on the sharing of sources of supply, specifically listed in Article 101(1)(c), and "must be categorised as an agreement having as its object the restriction of competition" unless an analysis of their content, legal and economic context, and objectives indicates otherwise.
While it is ultimately for the referring court to determine whether the Agreement at hand presented a sufficient degree of harm to competition to qualify as a restriction by object, the Court suggested that such a finding is unlikely. It emphasised the unique context in which the Agreement was adopted and the fact that it pursued a pro-competitive objective – that of ensuring the stability of player rosters. These factors weighed against a by-object characterisation.
The Court went on to confirm that the Meca-Medina test would then apply to determine whether the Agreement could fall outside Article 101(1). Again, this will be for the national court to determine. However, in this context, the Court confirmed, following previous case law, that ensuring the regularity of sporting competitions is a legitimate objective in the public interest which may justify rules intended to ensure stability in the player rosters of football clubs.
This article analyses the Court's reasoning, and considers the ruling's broader implications for no-poach agreements and sporting rules in the EU, and the impact of extraordinary circumstances on the application of competition law.
Kicking-off the Tondela case: the effects of the pandemic
The Covid-19 pandemic devastated the global economy, and professional football was no exception. In Portugal, the LPFP suspended the First and Second Divisions on 12 March 2020 with ten fixtures left to play. By April 2020, regulatory bodies across the EU were emphasising the need for flexibility and the possibility of extraordinary measures to address difficulties related to the pandemic.
In this context, the LPFP and the football players' union (SJPF) agreed to extend employment and loan contracts until the end of the season. Separately, the LPFP announced an agreement between the clubs to refrain from hiring players who had unilaterally terminated their contract citing difficulties caused by the pandemic. The clubs argued that this Agreement was intended to preserve the integrity and stability of the league competition amidst the unprecedented circumstances of the pandemic.
On 26 May 2020, the AdC imposed interim measures, suspending the Agreement. In April 2022, it fined the clubs and the LPFP approximately EUR 11.3 million, concluding its first enforcement action in labour markets. The AdC found that the arrangement constituted an agreement having as its object the restriction of competition in the market for recruiting players eligible to play in the First and Second Divisions.
The AdC's decision was appealed before the Tribunal de Concorrência, Regulação e Supervisão, which stayed the proceedings and referred three questions to the ECJ for a preliminary ruling, seeking clarity on whether:
- the Agreement constituted a rule of sporting interest pursuant to Meca-Medina case law;
- it was appropriate and proportionate under the Meca-Medina test; and
- it should be classified as a restriction by object.
The European Commission intervened in support of the AdC, contending that the agreement restricted competition by object "irrespective of the economic context", and that the clubs had attempted to exert market power over their employees during a time of crisis.
The playing field: EU competition law and sport
The Tondela decision arrives at a time of intense judicial activity surrounding the application of competition law to sport. In recent years, the ECJ has rendered a series of landmark rulings, including a trio of Grand Chamber judgments in December 2023 (International Skating Union, European Superleague, and Royal Antwerp) and the Diarra judgment in October 2024. Several other cases are pending before the Court, in particular two cases relating to the regulation of football agents, in which Advocate General Emiliou delivered his opinions on the same day as his opinion in Tondela, in what has been described as his "sports trilogy." (Case C-209/23, RRC Sports and Case C-428/23, Rogon).
The ECJ has consistently held that EU competition law applies to sport as a matter of principle. There is no broad sporting exception, only a limited exception for rules "adopted solely on non-economic grounds and which relate to questions of interest solely to sport per se". The Court considers such rules to include the exclusion of foreign players from the composition of national teams, or ranking criteria used to select athletes eligible to participate in sporting competitions.
Other sporting rules can, however, escape the prohibition in Article 101 if they meet the conditions set out in the Wouters/Meca-Medina case law (Wouters / Meca-Medina test). This requires that:
- they pursue a legitimate objective in the public interest;
- the restrictive effects resulting from them are inherent to the pursuit of that objective; and
- the restrictive effects do not go beyond what is necessary to achieve that objective.
In its December 2023 rulings, the ECJ established that the Wouters / Meca-Medina test does not apply to restrictions of competition by object, leaving the more stringent Article 101(3) as the only "escape route" for such restrictions.
For no-poach agreements, this is a distinct disadvantage: the European Commission has previously indicated that an Article 101(3) exemption for no-poach agreements is likely to be difficult as the net efficiencies of such agreements are "at best uncertain" (Competition Policy Brief, No 2/2024, see our May 2024 update). Thus, whether an agreement restricts competition by object or by effect is a critical threshold question, since it determines whether the Wouters / Meca-Medina test is available.
It is against this backdrop that the questions referred to the ECJ in Tondela take on their full significance: if the Agreement restricted competition by object (as considered by the AdC and the European Commission), Wouters / Meca-Medina could not apply, and the only way to escape the prohibition would be through Article 101(3).
Half-time whistle: the ECJ's assessment
The starting point: no-poach agreements as by-object restrictions
The Court took the view that no-poach agreements are comparable to horizontal agreements on the sharing of sources of supply, specifically listed in Article 101(1)(c), which control a specific parameter of competition (the recruitment of workers) and must, as a general rule, be categorised as having the object of restricting competition.
However, repeating its oft-cited mantra, the Court emphasised that the content of an agreement is not sufficient to determine whether a restriction of competition is by object: its legal and economic context and its objectives must also be examined.
Building on previous case law and citing its Advocate General, the Court distinguished between two categories of conduct for this assessment:
- collusive conduct liable to constitute a type of coordination that is particularly harmful to competition, "such as horizontal cartels leading to market-sharing", which requires only a limited contextual analysis; and
- other types of conduct which are not necessarily equally harmful to competition (and may not fall into well-recognised categories of harmful conduct), but which may nevertheless present a sufficient degree of harm to competition to support a by-object classification: such conduct requires an in-depth analysis of its economic and legal context, including the nature of the products or services concerned, the real conditions of the structure and functioning of the sector(s) or market(s) in question and, where necessary, the relevant regulatory and institutional framework.
In short, the more obviously harmful a restriction is, the less contextual analysis is required to determine whether it is a by-object restriction.
Context always matters
Irrespective of which category the conduct falls into, however, a contextual analysis is always necessary in order to determine whether it presents a sufficient degree of harm to qualify as anti-competitive by object. Indeed, the Court notes that the same conduct may restrict competition by object in some circumstances but not in others, depending on the context. As Advocate General Emiliou put it, "context always matters".
The mere categorisation of an agreement as a no-poach arrangement therefore does not automatically make it a restriction by object if there are specific circumstances that cast doubt on its harmful nature.
In relation to the Agreement at issue, the Court noted that:
- Competition between professional football clubs has specific characteristics: while clubs compete on various markets (such as ticket sales, sponsorships, and the exploitation of rights relating to competitions and players), their position on those markets ultimately depends on their primary, participation in sporting competitions.
- Sporting competitions are based on sporting merit. Their proper functioning and success depend on maintaining a balance and equality of opportunity between participating clubs.
- Given those characteristics, it is legitimate for sporting associations to adopt and enforce common rules relating to the organisation and conduct of competitions and the participation of players, including rules aimed at ensuring a degree of roster stability during a given season (for example by restricting the unilateral termination of employment contracts mid-season).
- While the Agreement was not adopted by a national or international sporting association but rather entered into between football clubs, it was adopted in the presence of the President of the LPFP and could be considered as having been supported, and even endorsed, by the LPFP.
All of these elements are relevant to the contextual analysis that must be carried out (by the referring court) before the Agreement can be classified as a by-object restriction.
As regards the impact of the Covid-19 pandemic, the Court considered that such an extraordinary event was not in itself enough to justify an exception to Article 101(1). However, it must be taken into account as part of the contextual assessment. In particular, in the case before it, the Court noted that the disruption caused to the functioning of football competitions by the suspension of the season meant that player departures could have significantly altered the composition of teams for the remainder of the season if and when it resumed.
Objectives: roster stability as a pro-competitive aim
As regards the third prong of the by-object assessment (an examination of the objectives pursued by the conduct at issue) the Court found that the Agreement pursued, in parallel, both pro-competitive and anti-competitive objectives.
On the one hand, it pursued the anti-competitive aim of restricting competition on the player recruitment market; and, on the other hand, it pursued the pro-competitive aim of ensuring stability of player rosters playing in the First and Second Divisions by limiting participating clubs’ poaching of players whose employment contract was due to expire or was terminated unilaterally for reasons relating to the Covid-19 pandemic.
The Court finds that both sets of objectives (pro-competitive and anti-competitive) must be taken into account in the by-object assessment.
The Court's finding on "by-object"
The examination by the Court of the content of the Agreement demonstrates that it restricted competition between football clubs on the player recruitment market. However, examination of the economic and legal context shows that it was adopted in a sector where competition features specific characteristics and in a unique context. Moreover, the Agreement did not only pursue an anti-competitive aim, but was also aimed at achieving the pro-competitive aim of ensuring the stability of player rosters.
The weighing up of these factors to determine whether, in the specific context, the Agreement was sufficiently harmful to restrict competition by object, is for the referring national court.
The Meca-Medina safe harbour
Turning to the Meca-Medina test (which only applies if the national court concludes that the Agreement does not restrict competition by object) the Court confirms that that case law applies to "any conduct by which an association of undertakings and that association’s member undertakings coordinate amongst themselves, irrespective of what form that coordination may take". Thus, contrary to the position taken by the AdC and the European Commission, it could apply to the Agreement even though it was concluded by football clubs and not by the national football association since it was concluded with the endorsement of the LPFP, it was adopted by undertakings acting in collaboration with an association of undertakings.
As regards the first limb of the Meca-Medina test (legitimate objective), the Court confirmed that ensuring the regularity of sporting competitions is a legitimate objective in the public interest, particularly important in football, and expressly recognised in the Court's case law. Examples of rules that may be justified by this objective include rules on transfer windows and rules intended to ensure the maintenance of a certain degree of stability in clubs’ player rosters.
The Court has left it to the national court to determine whether the second and third limbs of the Meca-Medina test (the requirement that the Agreement must be necessary and proportionate) are met by the Agreement, offering little by way of guidance.
In this regard, the national court might lean on the opinion of the Advocate General. He took the view that the "necessity" criterion required the referring court to consider three elements: whether the Agreement (i) was entered into in response to an objective need to pursue the objective in question; (ii) genuinely reflected a concern about securing the attainment of that objective in a consistent manner; and (iii) was suitable to achieve that objective, in that it appeared suited to make a meaningful contribution to its achievement.
In the Advocate General's view, the answer to those questions was likely to be positive: the exceptional circumstances of the pandemic created a serious risk that the integrity and fairness of the season could not be ensured such that something had to be done by the football teams and the football associations; and the Agreement appeared to be motivated by the genuine desire of the clubs and the LPFP to achieve a fair and orderly end to the season.
As to proportionality, the Advocate General considered the Agreement to have been devised "so as to limit, as much as possible, the impact on competition between the clubs involved":
- The Agreement had a limited geographic, personal, and temporal scope.
- Given the urgency, uncertainty, and complexity of the situation, equally effective and less restrictive alternative measures were difficult to identify.
- The impact on players was "relatively minor," since they remained free to sign for teams outside Portugal at any time and for any team in Portugal after the end of the season.
Implications beyond the football pitch
The Tondela ruling comes at a time of a rapidly expanding enforcement landscape on both sides of the Atlantic when it comes to no-poach arrangements. Just weeks after Advocate General Emiliou's Opinion in this case, the European Commission issued its first decision on no-poach agreements, fining Delivery Hero and Glovo EUR 329 million for (among other things) no-poach provisions embedded in a shareholders' agreement concluded in the context of a minority-stake acquisition (see our June 2025 update).
National authorities in the EU have also increased their scrutiny of such arrangements. For example, the French Competition Authority recently fined engineering and IT services companies Alten, Expleo and Bertrandt EUR 29.5 million for no-poach agreements; and the AdC recently took action against no-poach agreements in the technology consultancy, employment services and beverages sectors.
In the United States, the U.S. Department of Justice and the Federal Trade Commission issued joint guidelines in January 2025 explicitly targeting no-poach agreements under antitrust laws.
The message from enforcers across Europe and the U.S. is clear: no-poach agreements are an enforcement priority (see our March 2026 update).
Tondela provides regulators with a clear framework for future enforcement: the Court confirms that a no-poach agreement between actual or potential competitors "must be categorised as an agreement having as its object the restriction of competition" unless an analysis of their content, objectives, and legal and economic context indicates otherwise.
However, context is key: a narrowly tailored response to a genuine crisis can attract some flexibility in the application of the competition rules and withstand scrutiny. Nevertheless, while specific circumstances may allow an agreement to escape the prohibition, it will be necessary to ensure that it goes no further than necessary, and that there is no credible less restrictive alternative. It may in practice prove difficult to meet such conditions and the assessment will in any event remain acutely facts-based.
Looking ahead, the Court's ruling in Tondela will be directly relevant to the Lithuanian basketball preliminary reference filed in May 2025, which concerns whether an agreement between Lithuanian basketball clubs not to pay players' salaries during the Covid-19 pandemic constitutes a by-object restriction (Case C-324/25).
As regards sporting rules more broadly, the Court essentially confirms the approach taken in recent judgments. However, one possible nuance arises in relation to how, in considering the economic and legal context, the Court distinguishes the Agreement (adopted by professional football clubs) from rules laid down by sporting associations. In practice, this distinction appears to have had little impact on the Court's ensuing reasoning, since the Agreement was adopted in the presence of, and endorsed by, the LPFP (a fact to which the Court appears to give weight). However, it is not clear from the judgment whether a similar agreement adopted without the support of the competent sporting association would attract similar treatment or face greater difficulty escaping a by-object classification and accessing the Meca-Medina safe harbour.
The Tondela case will now return to the Portuguese court, which will have the ultimate say in applying the ECJ's ruling to the Agreement. As regards sporting rules, the ECJ will have two further occasions to develop its case law, in the upcoming preliminary rulings in RRC Sports and Rogon, involving FIFA's agent regulations.
