The former West Germany midfielder, who also played for and managed Real Madrid, accused Neil Lennon's men of being too negative in their Group G clash with the Catalan giants which ended in defeat when Jordi Alba scored an injury-time goal for the home side.
Celtic were widely praised for their display but Schuster was quoted in the Scottish Sun as saying: "I'm fed up of seeing these type of matches.
"There should not be teams like Celtic in the Champions League.
"We saw it last year with Chelsea. It was a very bad example for football and it is regrettable that they became European champions.
"You see Celtic defending with 10 men and almost snatching a point - that is not fair.
"I believe the coach of Celtic viewed many times the video of Chelsea last season against Barcelona.
"He decided to repeat the system, but the ultra-defensive system is not football.
"Chelsea have now generated a school for teams like Celtic to study. It would have been unjust if a team that defended with 10 men had taken one point in the home of the best club in the world.
"UEFA needs to change this phase of the competition if they want to breathe life into the Champions League.
"Celtic do not merit their place if they are going to play in this style."
Chelsea won the Europa League on Wednesday. The Blues defeated Benfica 2-1 on injury time goal from Ivanovic.
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