Sion is likely to appeal, prolonging uncertainty before the Europa League group stage kicks off on Sept. 15.
Sion can appeal Friday’s ruling to UEFA, then the Court of Arbitration for Sport.
Celtic played both legs of the clubs’ playoff last month under protest.
The teams drew 0-0 in Glasgow before Sion won the return 3-1. Pascal Feindouno, one of Sion’s disputed signings, scored twice.
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