Thursday, the Justice Department filed a proposed consent decree to prohibit the National Collegiate Athletic Association (NCAA), the largest national organization regulating intercollegiate athletics, from enforcing the Transfer Eligibility Rule, from enforcing the Rule of Restitution against anyone in connection with the Transfer Eligibility Rule and from implementing rules imposing similar restrictions between Division I colleges and universities.
On Jan. 18, the Justice Department’s Antitrust Division joined a civil lawsuit under the Sherman Act against the NCAA to end the NCAA’s Transfer Eligibility Rule. The department alleged that the rule limited competition for college athletes and restricted their ability to transfer to colleges and universities that provided better educational and athletic opportunities for them. The amended complaint, filed by the Justice Department, 10 states and District of Columbia, also alleged that the NCAA’s Rule of Restitution was anticompetitive because it deterred college athletes from challenging anticompetitive rules in court.
The proposed consent decree, if approved by the court, enjoins the NCAA from enforcing the Transfer Eligibility Rule and from adopting any similar rule in the future. In order to remedy harms caused to college athletes by the Transfer Eligibility Rule, the proposed consent decree requires the NCAA to issue an additional year of eligibility to certain qualifying college athletes who were previously deemed ineligible to participate as a result of the Transfer Eligibility Rule for a season or any portion of a season.
“Free from anticompetitive rules that unfairly limit their mobility, Division I college athletes will now be able to choose the 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 alleged that the NCAA’s one-time-transfer rule unreasonably restrained competition in the markets for athletic services in men’s and women’s Division I basketball and Football Bowl Subdivision (FBS) football, as well as for athletic services in all other men’s and women’s Division I sports. The rule forced college athletes who transfer more than once to sit on the sidelines for an entire season before they were eligible to compete in NCAA athletic competitions at their new school. The amended complaint further alleged that the restriction limited college athletes’ bargaining power and harmed both their educational and athletic experiences. The NCAA’s Division II, which had a similar Transfer Eligibility Rule, has already revised its rule to remove a year-in-residence requirement for transfer students.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person should submit written comments concerning the proposed settlement within 60 days following the publication to Chief, Media, Entertainment & Communications, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 7000, Washington, D.C. 20530. At the conclusion of the public comment period, the U.S. District Court for the Northern District of West Virginia may enter the final judgment upon finding it is in the public interest.
Anyone with information about anticompetitive conduct in college sports or any other violations of the antitrust laws is encouraged to contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or [email protected].
