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F1 rebel teams withdraw their complaint to the EU, what next?

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F1 rebel teams withdraw their complaint to the EU, what next?
Jan 25, 2018, 3:51 PM

Back in 2015 two rebel F1 teams, who were on the wrong side of the financial model of Formula 1, pulled the trigger and launched an official compla...

Back in 2015 two rebel F1 teams, who were on the wrong side of the financial model of Formula 1, pulled the trigger and launched an official complaint to the EU Competition commissioner Margrethe Vestager.

Today they dropped it.

The argument put forward back then by Sauber and Force India was that the system of F1 governance (F1 Strategy Group) and bonus payments, which favoured the top teams at the expense of the smaller ones, amounted to a 'cartel', which is anti-competitive.

These measures and payments were put in place by Bernie Ecclestone when he successfully managed to break up the F1 Teams Association (FOTA), which was threatening to use the solidarity of the F1 teams to upset his business model.

He made Ferrari and Red Bull a financial offer they couldn't refuse, they quit FOTA, which subsequently collapsed. Mercedes, McLaren and Williams took advantage of their historical involvement in the sport to benefit to varying degrees in the criteria for the bonus payments, but now new owners Liberty Media are trying to create a new model for the period after December 31 2020, when these agreements end.

Today both Sauber and Force India issued a joint statement saying:

"We have decided to withdraw the complaint we lodged with the European Commission in 2015 on the subject of anti-competitive practices in the sport of Formula 1.

"We have been greatly encouraged by the dialogue that has been introduced following the appointment of Chase Carey as Executive Chairman and CEO of the Formula 1 commercial rights holder and his new management team. Their approach has brought a new culture of transparency to the sport and illustrates willingness to debate fundamental issues such as the distribution of the prize fund monies, cost control and engine regulations.

"We are encouraged and reassured by the even-handed and fair negotiating approach taken by the new management of Formula 1 to all the teams and their issues.

"While the concerns leading to the compliant were fully justified, we believe this new approach provides the necessary degree of assurance that our concerns will be looked at objectively, and we prefer to resolve the issues facing the sport through dialogue rather than a legal dispute.

"We want to support this transformational process in Formula 1 and thus have resolved to withdraw our complaint with immediate effect."

Monisha Kaltenborn Bob Fernley

What is behind this and what happens next?

Colleagues in other media working on the Brussels EU beat maintained that Vestager was never very interested in the F1 matter, having some much bigger ticket items on her plate such as cases against Apple and Google.

There had been little evidence that the EU was going to launch a serious probe into F1 and many suspect that there was behind the complaint an attempted ruse to make any sale of F1 harder to achieve. However it didn't prove a hurdle to Liberty completing the acquisition in January 2017.

Tuesday (Jan 23rd) marked the 12 month anniversary of Liberty taking over and removing Ecclestone from his role as CEO.

The most interesting aspect of this development is that Sauber is now very much under the influence of Ferrari, while the same is true to a much lesser extent with Force India and Mercedes.

Sauber is still controlled by the Longbow Finance and its Swedish connections with the Rausing family that backs Marcus Ericsson, but over the winter Ferrari chairman Sergio Marchionne moved in; the team is now Alfa Romeo branded, it benefits from significant technical support from Ferrari and will run its star protege Charles Leclerc (above) this season.

Monisha Kaltenborn (above), who made the 2015 complaint on Sauber's behalf, has left the team and now Fred Vasseur is in charge.

While the Sauber statement makes lots of positive noises about Liberty Media, such as "Their approach has brought a new culture of transparency to the sport and illustrates willingness to debate fundamental issues such as the distribution of the prize fund monies, cost control and engine regulations.

"We are encouraged and reassured by the even-handed and fair negotiating approach taken by the new management of Formula 1 to all the teams and their issues," and so on, Marchionne is currently at loggerheads with Liberty over their vision for F1 after 2020 and is not ready to compromise on the technical level of the engine and of the bonus payments Ferrari receive.

Liberty also want to bring in a budget cap to level the playing field between teams. Ferrari does not want to be treated the same as other teams and the same is true, to some extent, with Mercedes.

The end of this EU complaint will be positively received by Carey and the new F1 leadership and is a positive step generally for progress. It is in the interests of teams like Sauber and Force India to contribute to a positive environment for discussions on the way forward, but some very tough negotiations lie ahead.

All photos: LAT Images

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Series Formula 1
Teams Ferrari Shop Now , Sauber