The US Supreme Court on Monday sided with student athletes who brought an antitrust challenge against the National Collegiate Athletic Association in a blockbuster ruling that could reshape the country’s more than $14bn college sports industry.

The top court’s nine justices unanimously upheld a lower court decision that found restrictions set by the NCAA, the US collegiate sports governing body, on education-related benefits — including “scholarships for graduate or vocational school, payments for academic tutoring or paid post-eligibility internships” — to student athletes were unfair.

“By permitting colleges and universities to offer enhanced education-related benefits, [the lower court’s] decision may encourage scholastic achievement and allow student-athletes a measure of compensation more consistent with the value they bring to their schools,” Justice Neil Gorsuch wrote in the court’s opinion.

In a concurring opinion, Justice Brett Kavanaugh questioned the NCAA’s practices more broadly, writing: “The NCAA’s business model would be flatly illegal in almost any other industry in America.”

The ruling is a significant challenge to the business model of American college sports, whose traditions date back more than a century and in some cases serve as the de facto talent pipeline for several top US professional leagues, including football and basketball.

The NCAA case was an amalgam of several lawsuits against the governing body brought by current and former college athletes, who argued that the NCAA had violated federal antitrust law by fixing the price for student athlete compensation.

“Colleges and universities across the country have leveraged sports to bring in revenue, attract attention, boost enrolment and raise money from alumni,” the court wrote in its summary of the case. “That profitable enterprise relies on ‘amateur’ student athletes who compete under horizontal restraints that restrict how the schools may compensate them for their play.”

The NCAA and its member universities maintain that they needed to set parameters for compensation in order to preserve the amateur status of participating athletes, which they deem critical to the appeal of college sports. But the justices said they were not persuaded that the NCAA’s desire to preserve amateurism, based partly on tradition, justified the restrictions.

At issue in the Supreme Court’s ruling was a narrow scope of current NCAA rules, which limit the kind of education-based compensation athletes competing at member universities can receive. The court did not consider broader terms that would potentially allow pay for athletic performance, or for so-called name, image, and likeness marketing rights.

In a statement on the court’s decision, the NCAA noted the limited scope of the ruling and reaffirmed its desire for federal legislation on NIL rights. Several states, including Florida, have passed laws that will take effect on July 1 permitting university students to earn money for their participation in sports.

“Even though the decision does not directly address name, image and likeness, the NCAA remains committed to supporting NIL benefits for student athletes,” said NCAA president Mark Emmert.

“It is our hope that this victory in the battle for college athletes’ rights will carry on a wave of justice uplifting further aspects of athlete compensation,” said Steve Berman, an attorney who represented the athletes in the case. “This is the fair treatment college athletes deserve.”

The NCAA in its statement said that the opinion of the court “repeatedly notes that the NCAA remains free to articulate what are and are not truly educational benefits”.