Brussels accuses F1 motor racing of abusing its dominant position

 

Europe's competition authorities have accused the organisers and promoters of international motor racing of abusing their dominance of the sport.

The initial results of a two-year inquiry by the European Commission could lead to far-reaching changes in the way the multibillion-dollar sport is organised - and undermine plans by Mr Bernie Ecclestone, the motor racing promoter, to float his Formula One business on the stock market.

The inquiry concludes that Mr Ecclestone broke EU competition law when he obtained exclusive television broadcasting rights to world motor racing events.

European Commission insiders said the contracts would have to be renegotiated if the initial findings of a Commission investigation were confirmed.

The complaint is one of a list of objections to the commercial arrangements of international motor racing sent by the Commission yesterday to Formula One Administration (FOA) and International Sportsworld Communicators (ISC), Mr Ecclestone's companies.

The statement of objections was also sent to Max Moseley, head of the Federation Internationale de L'Automobile (FIA), the sport's governing body. Mr Karel Van Miert, the acting EU competition commissioner, began the investigation two years ago after complaints from a German TV production company.

The probe concludes that the FIA abused its dominant hold over motor racing to restrict competition.

It also claims that the FIA abused its dominance to acquire the broadcasting rights to international motor sports events and could not therefore validly assign the rights to Mr Ecclestone's two companies.

Thus FOA and ISC were not entitled to conclude legally enforceable contracts with broadcasters.

Unless the FIA renegotiates its links with Mr Ecclestone and takes steps to loosen its control over the motor racing world, it and the two Ecclestone companies could be punished with fines of up to 10 per cent of turnover.

News of the Commission's objections is likely to unsettle banks and institutional investors involved in Formula One's $1.4 billion (€1.36 billion) bond issue, launched in May.

It was secured against future income from Formula One's exclusive broadcasting rights to world motor racing events.