The Competition Authority has launched a criminal case under Section 400 of the Penal Code to investigate a possible anti-competitive agreement between Estonian football clubs.

"Evidence is currently being collected and no one has been officially named a suspect. Only after the facts have been clarified will it become clear whether there is reason to launch a more in-depth investigation into anyone's actions," a spokesperson for the Competition Authority told ERR.

"The Competition Authority will not comment on an ongoing investigation. However, if anyone has information that could assist the case, we encourage them to share it with us," added Director General Evelin Pärn-Lee.

Madis Metsmägi, head of youth development at Mart Poom's football club Nõmme United, said that they had been offered an agreement fitting the description — one that restricts the free movement of players and staff between clubs — by Aivar Pohlak, head of the Estonian Football Association. Metsmägi filed a report about the agreement with the Competition Authority earlier this year.

ERR has been seeking comment from Pohlak regarding the alleged agreement since last Friday afternoon. We have called his personal numbers and reached out through the media representatives of both the Football Association and FC Flora, but Pohlak has not responded to any of the inquiries. We will add his comments as soon as they become available.

Metsmägi: Pohlak was representing FC Flora

The proposal to sign a document titled "Good Practice Agreement between Football Club FC Flora and Football Club Nõmme United" was made by Aivar Pohlak during a video meeting on August 8 of last year, Madis Metsmägi told ERR.

The meeting was prompted by a dispute that arose when a youth player from FC Flora wanted to transfer to Nõmme United.

"The player first contacted us at the end of 2021. I informed the player's parent that if they wanted to join us, we would need to notify their current club. I asked them to first talk to FC Flora about their concerns and, if they still wanted to join us, to get back in touch. They contacted me again in the summer of 2024 and were determined to switch clubs," said Metsmägi.

"FC Flora and Aivar Pohlak then tried to block the transfer, but both Mart Poom and I said they had no right to prevent an unsigned youth player from switching clubs. That led FC Flora to suggest a video meeting to clear the air. During that meeting, Aivar Pohlak made the proposal to us," Metsmägi explained.

According to Metsmägi, Pohlak made the proposal as a representative of FC Flora.

"I happened to join the video call with Pohlak before anyone else and asked whether Taavi Trasberg, FC Flora's head of youth development, would also attend. Pohlak said no, that he was representing FC Flora himself. Pelle Pohlak from FC Flora also joined the meeting. That same evening, Aivar Pohlak sent us a written version of the agreement. At first, he wanted to do it verbally, but I wasn't okay with that and asked for it in writing. Pohlak said he generally prefers verbal agreements, but he would send the document anyway — and he did that same evening," said Metsmägi.

"The agreement stated that children of any age could not switch clubs without the consent of their current club, and the same applied to staff, including coaches. I find it bizarre that in modern-day Estonia, an employer decides where a coach is allowed to work. An adult should have the right to choose where they want to work," Metsmägi said.

According to him, the agreement meant that if an FC Flora staff member contacted Nõmme United to ask about open positions, Nõmme United would be required to inform FC Flora. FC Flora would then decide whether or not Nõmme United could even meet with the employee.

"Mart [Poom] and I realized during the video meeting that such an agreement wasn't right. We tried to revise the wording, but the core idea remained that decisions would be made on behalf of players or their parents. If someone wants to change clubs, that's their decision and they should have the right to do so. These kinds of decisions shouldn't be made behind closed doors. And that's where it ended — we didn't sign the agreement," Metsmägi said.

In a casual conversation last November with an acquaintance, sworn attorney Rauno Kinkar of the WIDEN law firm, Metsmägi learned that the agreement was illegal.

"You're not allowed to sign or even offer something like that," Metsmägi said.

Lawyer: The agreement smells of market sharing

"If the agreement emailed by Pohlak stipulated that one football club cannot take on players or employees from another without that club's consent, there's strong reason to suspect this constitutes market sharing," Margus Reiland, a sworn attorney and partner specializing in competition law at the law firm WIDEN, told ERR.

"This agreement raises a significant suspicion of market sharing. The Competition Act clearly states that market sharing is prohibited," Reiland said.

According to him, the Competition Authority should investigate how many such agreements have been made and between which clubs.

"If such an agreement is already circulating, that alone raises the suspicion of market sharing," he said.

The attorney added that it makes no difference whether the agreements are written, verbal or based on a mutual understanding — any form of agreement falls under anti-cartel prohibitions.

Under current law, such cases are treated as criminal offenses. After the adoption of the new Competition Act, they will be classified as misdemeanors.

"At present, market sharing can be prosecuted under criminal law, which carries penalties including fines or one to three years in prison. In the future, it will be handled as a misdemeanor, meaning violators would face substantial administrative fines," Reiland said.

"Under the current system, even offering a cartel agreement can be considered attempted criminal conduct and attempts are punishable in the same way as the offense itself," he added.

"Cartel agreements in the sports sector are particularly harmful because they hurt young footballers, clubs and the industry as a whole. As a result of a cartel, players and staff would be unable to move freely between clubs and clubs wouldn't be able to compete openly for talent. In a fair competitive environment, clubs should compete to offer better conditions to players and coaches. Under a cartel, that dynamic disappears, because one club could simply decide who's allowed to leave and who's not," Reiland said.

In the email accompanying the proposed agreement, Pohlak added a note stating that the agreement was not legally binding and carried no legal weight. The same clause was included in the agreement itself.

According to Rauno Kinkar, a sworn attorney and partner at WIDEN specializing in sports law, such a disclaimer has no legal standing whatsoever.

"If compliance with the agreement is genuinely expected, then it doesn't matter if the agreement says, 'this is not a contract,'" Kinkar said. "It's like someone writing on a bullet that it's not lethal to humans, then shooting someone and being surprised by the corpse. It's legal nonsense," he explained.

"In this case, the immediate harm to Estonian football is obvious. If there was truly an attempt to form such a cartel agreement, then it's a serious and blatantly brazen violation. A coach must have the freedom to choose their workplace. These kinds of backroom deals are completely unacceptable," Kinkar added.

WIDEN does not represent either Metsmägi or Nõmme United in any legal matter.

Agreements with other clubs

Metsmägi said he doesn't know how many Estonian football clubs may have entered into similar "good practice" agreements, but he has reason to believe there are more.

"Pohlak confirmed in writing that he has had precisely this kind of agreement with FC Levadia for 20 years. I know that Tallinna Kalev has been offered the same agreement. I suspect there may be others, but I don't have evidence of that," Metsmägi said.

"Even if these agreements have only been made with the clubs I know about, they would already cover 25 percent of the coaches. I have reason to believe a large portion of these agreements have been made under the table. The market is locked up. Essentially, one person — or a small handful of clubs — gets to decide who works where and who is allowed to move," he said.

This was one of the reasons why, earlier this year, Metsmägi filed a report with the Competition Authority regarding the "good practice" proposal from Pohlak.

"I went to the Competition Authority because it felt like the right thing to do. I know this is a violation of the law. I couldn't solve the situation myself, and since I had indications that this went beyond just one club, I forwarded all the documents to the Competition Authority. They informed me that this may constitute a legal violation and that a criminal investigation would be launched," said Metsmägi.

He added that signing the agreement with FC Flora would have clearly benefited Flora.

"This winter, several young players from FC Flora wanted to join us. They tried to block one of them, but we bought out his registration rights according to the regulations governing player status. After that, several more players wanted to switch to our club — but FC Flora wouldn't allow it. These were players born in 2009 and 2010. In their cases, the response was a flat no," Metsmägi said.

Association in the process of choosing a new head

According to Metsmägi, one reason some clubs want to hold on to talented players is to later secure a higher transfer fee.

"In Estonia, transfer fees for players increase every two years. Or a club might simply expect that a player will stay with them all the way to signing a professional contract. But there are also good examples — clubs that look for ways to ensure talented players can train in an environment with other skilled players," Metsmägi said.

He stated that his hope is for such agreements between football clubs to no longer be made.

Ahead of the Estonian Football Association's leadership elections on June 19 — where incumbent Aivar Pohlak is being challenged by Ragnar Klavan — Metsmägi said he supports Klavan.

"I support Ragnar. I hope he wins. I want to make this information public so that members of the Estonian Football Association understand what kinds of agreements its president is making on behalf of FC Flora. He's creating a situation where the bigger, more powerful clubs entrench their positions at the expense of others — clubs that aren't part of the agreement and to whom he hasn't offered it. It's deeply unfair," Metsmägi said.

In his view, the success of Estonian professional football is partly built on the back of such agreements.

"If players can't switch clubs or are stuck in environments that don't challenge them, and there's no fair market competition among coaches or exchange of experience, then there's no real development. Every attempt at competitive football gets crushed at the first opportunity. Whenever someone tries to rise, they're told it's not acceptable," Metsmägi said.

--

Follow ERR News on Facebook and Twitter and never miss an update!