Today, the Justice Department filed a proposed consent decree to prohibit the National Collegiate Athletic Association (NCAA) from enforcing the Transfer Eligibility Rule and the Rule of Restitution in connection with it. The decree also aims to prevent the implementation of similar restrictions between Division I colleges and universities.
On January 18, the Justice Department’s Antitrust Division joined a civil lawsuit under the Sherman Act against the NCAA to end its Transfer Eligibility Rule. The department alleged that this rule limited competition for college athletes and restricted their ability to transfer to institutions offering better educational and athletic opportunities. The amended complaint, filed by the Justice Department along with ten states and the District of Columbia, also claimed that the NCAA’s Rule of Restitution was anticompetitive as it deterred athletes from challenging such rules in court.
If approved by the court, the proposed consent decree will enjoin the NCAA from enforcing or adopting any similar rule in the future. To address harms caused by these rules, it requires granting an additional year of eligibility to certain qualifying athletes previously deemed ineligible due to these restrictions.
“Free from anticompetitive rules that unfairly limit their mobility, Division I college athletes will now be able to choose institutions that best meet their academic, personal and professional development needs,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “This resolution is a testament to the benefits of federal and state enforcers working together to ensure free markets and fair competition for all Americans.”
The amended complaint argued that NCAA's one-time-transfer rule unreasonably restrained competition in markets for athletic services across men’s and women’s Division I basketball, Football Bowl Subdivision (FBS) football, as well as other sports. It stated that this rule forced athletes transferring more than once to sit out an entire season before competing at their new school. Additionally, it claimed that this restriction limited athletes’ bargaining power and harmed both their educational and athletic experiences. Notably, NCAA's Division II has already revised its similar Transfer Eligibility Rule.
As mandated by the Tunney Act, details of this proposed settlement along with a competitive impact statement will be published in the Federal Register. Public comments on this settlement can be submitted within 60 days following publication to Chief, Media, Entertainment & Communications at Antitrust Division, U.S. Department of Justice.
The U.S. District Court for Northern District of West Virginia may enter final judgment after considering public interest post-comment period.
Anyone with information about anticompetitive conduct in college sports or other antitrust violations is encouraged to contact Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or via email at antitrust.complaints@usdoj.gov.
View documents related to this case [here].
