The sentence against the two most powerful men in football stunningly highlighted the troubles faced by the world's most popular sport where billions of dollars have been invested in recent years.
Blatter, 79, and Platini, 60, were "immediately" banned from all football activity. Blatter's career is now almost certainly over while Platini's hopes of taking over FIFA are all but finished.
Blatter, FIFA's president since 1998, was fined 50,000 Swiss francs ($50,000/46,300 euros). Platini, the head of UEFA, Europe's governing body and a FIFA vice president, was fined 80,000 Swiss francs.
FIFA court to hear Blatter, Platini cases
A statement by the court said both showed "abusive execution" of their powers.
FIFA had looked into a two million Swiss francs payment authorised by Blatter to Platini in 2011. They said it was for work as a consultant carried out between 1999 and 2002.
While the FIFA court dropped corruption charges against both men, it said both were guilty of a conflict of interest.
It said there was "no legal basis" for the payment in an oral agreement between the two officials in August 1999.
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"Neither in his written statement nor in his personal hearing was Mr Blatter able to demonstrate another legal basis for this payment. His assertion of an oral agreement was determined as not convincing and was rejected by the chamber."
The court said "Mr Blatter's actions did not show commitment to an ethical attitude, failing to respect all applicable laws and regulations as well as FIFA's regulatory framework to the extent applicable to him and demonstrating an abusive execution of his position as President of FIFA".
Platini was also found to be in "a conflict of interest".
The judgement was even more damning of the French football legend than for Blatter.
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"Mr Platini failed to act with complete credibility and integrity, showing unawareness of the importance of his duties and concomitant obligations and responsibilities.
"His actions did not show commitment to an ethical attitude, failing to respect all applicable laws and regulations as well as FIFA's regulatory framework."
The court said Platini was also guilty of "demonstrating an abusive execution of his position as vice-president of FIFA."
Blatter and Platini were provisionally suspended in October after Swiss prosecutors started a criminal investigation into the 2011 cash transfer.
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Blatter is under criminal investigation and Platini is being treated as between a suspect and a witness.
Both strongly deny any wrongdoing. Blatter spent eight hours before a FIFA court last Thursday while Platini boycotted his hearing saying he had been "condemned" in advance.
At the time of the 2011 payment, Blatter was campaigning for a fourth term as FIFA president. Platini later supported his former mentor but has since turned against him.
Blatter and Platini can challenge any ban at a FIFA appeal tribunal, the Court of Arbitration for Sport, and even in a Swiss civil court.
Blatter would be fighting for his reputation. For Platini, the ban rules him out of the FIFA election to be held on February 26.
The deadline for candidates to be registered and pass an integrity check is January 26.
With FIFA's reputation in tatters after the arrest of several top officials, Blatter announced four days after winning re-election to a fifth term in May that he would stand down and call a new election.
Seven FIFA officials were arrested in a luxury Zurich hotel two days before the election congress.
Now US authorities have charged 39 football officials and sports business executives over more than $200 million in bribes for football television and marketing deals.
Swiss prosecutors are in parallel investigating FIFA's management and the award of the 2018 and 2022 World Cups to Russia and Qatar.
Facing pressure from governments and the International Olympic Committee for major reforms, there are currently five candidates to take over FIFA: Asian football head Sheikh Salman bin Ebrahim al-Khalifa of Bahrain, South African politician and tycoon Tokyo Sexwale, former FIFA vice president Prince Ali bin al Hussein of Jordan, UEFA general-secretary Gianni Infantino and Jerome Champagne, a former FIFA assistant general secretary from France.
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