F1 soon in the sights of the European Commission?
The European Commission could look into the case of Formula 1, notably concerning suspicions of anti-competitive practices raised by the way the discipline operates.
Will Formula 1 face an investigation by the European Commission regarding possible anti-competitive practices?
The possibility exists after a British European parliamentarian, Anneliese Dodds, sent a letter dated November 20 to the Commissioner for Competition, the Dane Margrethe Vestager, to highlight some issues regarding the management of discipline.
Two aspects have been highlighted. First, regarding the involvement of the Fédération Internationale de l’Automobile. Indeed, Forbes revealed this Monday that the FIA held 1.06% of the shares in Delta Topco, the holding company that owns the commercial rights of F1. However, this seems to contravene an agreement between the Federation and the European Commission dating back to 2001, following the negotiation of the Concorde Agreements of the time, which stipulated that « the role of the FIA would be limited to that of a sports regulator, without any commercial conflict of interest » and « to prevent conflicts of interest, the FIA sold all its shares in the Formula 1 World Championship. »
Anneliese Dodds wrote in her letter that « the Federation has acquired a direct commercial interest in the championship. This seems to be in contradiction with the terms of the 2001 agreement. »
Then, the other aspect mentioned is the governance of Formula 1. The decision-making process involves several bodies, the main one being the Strategy Group, which equally brings together representatives from the FIA, the commercial rights holders, and the teams. However, only six teams—the most powerful and oldest ones: Mercedes, Red Bull, Williams, Ferrari, McLaren, and Lotus, whose mandate will end at the end of the season—are represented there.
This situation had been raised by more modest teams such as Force India or Sauber a few weeks ago – Bob Fernley, deputy director of the Indian team, even speaking of a cartel – in the context of the significant difficulties faced by Caterham – in administration since October – and by Marussia – in liquidation since November. The problem particularly affects A. Dodds, as she writes in her letter: “Many F1 teams and related companies are based in my constituency in the southeast of England,” adding that the disappearance of two teams will lead “to a loss of jobs in a highly skilled sector of the British industry.” The failure of these companies occurred at a time of concerns that small teams had been treated unfairly while being excluded from the rule-making process in F1.
« It is astonishing that the FIA currently seems powerless to ensure that all F1 teams are treated fairly. In fact, it appears that last year, the FIA agreed to a dilution of its regulatory authority in a new deal with the F1 promoters, » added the Briton.
A meeting between the two women took place in Strasbourg this Tuesday. A source close to the matter indicated that Dodds was encouraged to see that the commissioner was interested in the issue and had promised to look into it more closely. The commissioner said she would formally respond to Anneliese’s letter to express the Commission’s view on this, the source indicated. Story to follow, then.
