The Citizens have appealed after an independent commission found the club guilty of serious breaches of Premier League financial rules.
As quoted by The Sun, Emery argued that similar financial practices extend beyond City, while expressing sympathy for Guardiola as scrutiny intensifies around his success.
“It's an issue that was already known. We all have our restrictions and we have to sell players to comply - so we have to figure out how to draw up contracts with new people,” he said.
“Financial fair play seeks a balance so that what you generate is spent and there isn't inflation. But yes many other clubs have inflated their budgets and now it's coming to light.
“I feel sorry about it, given how that team played. Under Guardiola, there were times when they were unbeatable.”