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European Commission appears to dismiss anti-competition claim

NEWS STORY
07/01/2015

Europe's competition commissioner appears to dismiss F1 anti-competition claim made by British MEP.

In November 2014, British politician Anneliese Dodds, Labour MEP for the South East England region, and just a few months into her new role, wrote to Europe's competition commissioner Margrethe Vestager, calling on her to investigate two questionable moves made by the FIA.

The first was the FIA's acceptance of a 1% stake in the F1 Group which runs F1, a deal that could be worth as much as $120m should CVC, which controls the F1 Group, successfully reach its $12bn target when selling the business.

The second move, being questioned by Ms Dodds, concerned the formation of the Strategy Group, which the FIA agreed to in return for a payment of $40m.

Controversially - and isn't everything in F1 at this level mired in controversy - the Strategy Group, which consists of three main parties - the F1 Group, the FIA and six 'leading' teams - has immense power, witness its vetoing of the $200m budget cap which would have gone some way to levelling the playing field and might - just might - have saved Marussia and Caterham and the hundreds of jobs that went with them.

In November, Dodds called on the European competition commissioner to "look into this possible breach of competition rules as a matter of urgency and take whatever action is necessary to ensure that the undertakings made by the FIA are being observed as originally intended."

The response was not encouraging.

"Commissioner Vestager has asked me, as a Head of Unit dealing with antitrust enforcement in the sports sector, to reply to your letter of 20 November 2014 concerning Formula One motor racing," replied Krzysztof Kuik, an antitrust head at the European Commission (EC). "She has also asked me to thank you for the opportunity to meet you in Strasbourg on 25 November 2014 where you spoke about the issues raised in your letter.

"The Commission monitors possible anticompetitive market practices and abusive conduct," the letter continued. "This includes behaviour by operators active in the sports sector. We are aware of the recent allegations regarding Formula One's governance, as described in your letter and the recent press reports. I appreciate it that you have provided information about those issues and have taken note of your concerns."

The response, which has all the markings of a 'thank you for your interest in the position...' or a 'your views are important to us' sound-bite, is all the more surprising because, in Marussia's case, other than the jobs lost, there is also the loss of almost $18m of public money as the Banbury based team will only be able to repay (at most) $2.4m of a $20.2m loan given it by Lloyds, a state-owned British bank.

Clearly not one to be fobbed off, Ms Dodds has written to Ms Vestager again.

"What are the steps that the Commission intends to take next in this case?" she demands. "Does the Commission intend to open an own initiative investigation into these allegations? If not, why not? What information would the Commission require in order to open such an investigation, and what would the trigger be? Does the Commission believe that its current sports industry policy is suitably up to date and still adequate, given the pace at which the industry keeps growing within the EU market?

"I would be very grateful if either you or Mr Kuik could answer those questions and explain in a bit more detail exactly what the Commission is doing to look into this matter, and what you expect the next steps to be," she continues. "If there is any more information that you require from me, or anything more that I can do to be of assistance, then please do not hesitate to let me know."

Unbeknown to Ms Dodds, it is claimed by The Times that Kuik has already 'interviewed' representatives from Force India, Lotus and Sauber, the three teams most vocal about F1 costs in the wake of the demise of Caterham and Marussia and who were said to be considering boycotting the United States Grand Prix, though two of the teams now deny this action was ever considered.

Interestingly, it is further claimed that; "two more figures, whose names have been withheld, have given critical accounts of the way F1 is run".

As we await news of whether the EC believes there is a case to answer, it's worth noting that the last time a complaint concerning F1 was lodged was in 2009 and concerned the selection process for the new teams entering the sport in 2010 and, in particular, the fact that those selected would have to use Cosworth engines.

While little more was heard of the complaint, the three teams, and Cosworth, are no longer in the sport.

Chris Balfe

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READERS COMMENTS

 

1. Posted by kiwi2wheels, 09/01/2015 0:12

"That's what you would expect from a Labour MEP.........

Exterminate Liblabcon, vote UKIP !"

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2. Posted by Vinicius, 08/01/2015 19:04

"Someone should have 100% control of Formula One. And I'm not talking about FIA neither teams nor manufacturers."

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3. Posted by Jonno, 07/01/2015 17:30

"Perhaps Bernie has already sent them the £100m, to save on the court expenses.
"

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