The EU and the FIA Settle Anti-Trust Case

Announcements made today by the European Union and the FIA, disclose the two sides are close to finalising a settlement on the anti-trust investigation the EU has been running against the FIA and the Formula One Administration. This settlement includes, among other, the total separation between the FIA and Bernie Ecclestone's companies, including the resignation of Ecclestone himself from the position of head of promotions at the FIA.

Following a meeting today with Max Mosley, President of the FIA, and Bernie Ecclestone, CEO of Formula One Administration, European Competition Commissioner Mario Monti announced that very significant progress has been in the case, which involves issues relating to the management and governance of motorsport in general, as well as specific issues relating to the broadcasting and related rights for Formula One motor sport.

In July 1999, the Commission, on a preliminary basis, objected to a number of features of the previously existing arrangements. In particular, the Commission objected to what it saw as a conflict between the legitimate role of the FIA as the regulator of international motor sport and its interests in the commercial side of motor sport. These arrangements resulted, in the view of the Commission, in Formula One Administration (FOA), the company which markets the rights to Formula One races, being able to impose restrictive contracts with third parties.

Following lengthy discussions with FIA and with FOA which began in Spring 2000, substantial modifications to FIA's rules and commercial arrangements have been made and further changes agreed to in principle. As a result, the Commission said it is satisfied that the FIA's role in future will be limited to that of impartial motorsports regulator. FOA has sold its interest in Rallying and all other forms of motorsport other than Formula One, and has agreed to make a number of changes to the current arrangements relating to the marketing and broadcasting of Formula One races.

The announcement stipulated that changes already adopted, together with those agreed in principle, "will benefit all citizens interested in motorsport, as well as the sport's participants. The continued role of FIA as the regulatory authority will ensure that the existing high safety standards for participants and spectators will be maintained. At the same time, the changes allowing the introduction of new and competing forms of motor sport and creating new possibilities for circuits and broadcasters, will bring more choice to consumers both as spectators and as television viewers."

Commissioner Monti himself stated that, "the new rules, together with the significant number of undertakings offered by the parties and changes to the marketing and broadcasting arrangements, seem to us to amount in principle to a satisfactory solution. Accordingly, I intend to ask my services to prepare an Notice which will be published in a few weeks' time and which will invite third parties to submit their comments to the Commission."

In the light of this progress towards the resolution of a long running and difficult case, and as all complaints have now been settled, the Commission said it is in a position to give its preliminary approval to the modified rules and arrangements. However, before giving its final approval, the Commission said it wishes to give third parties the opportunity to comment.

The following are the main elements of the changes agreed by FIA and FOA:

The FIA has amended its regulations to strengthen the rights of motorsport organisers, circuit owners and participants, and to make it clear that FIA will act impartially as between all forms of motor sport for which it is the regulator;

The FIA will no longer have a commercial interest in the success of Formula One and the new rules will remove any obstacle to other motorsports series competing with Formula One;

The FIA will retain its rights over its championships and the use of the "FIA" name and Trade Marks, but has removed from its rules any claim over the broadcasting rights to events that it authorises and has agreed to waive any claim to broadcasting rights under the relevant clauses in the Formula One agreement (the "Concorde Agreement");

The FIA has made it clear that its decisions will always be reasoned, and that those decisions may be challenged before national courts;

The FOA group of companies has sold its interest in all forms of motorsport including Rallying, and will therefore only have an interest in Formula One. Mr Ecclestone himself will no longer handle the FIAls promotional affairs and will also reduce his role in FIA in other ways.

The FOA has agreed to limit the duration of its free-to-air broadcasting contracts (to five years in the case of host broadcasters and three years in other cases) and has removed provisions which penalised broadcasters which wanted to broadcast other forms of open wheeler racing.

In a separate statement by the FIA, Mosley and Ecclestone were said to welcome the settlement and the statement made by Monti.

"Over the past six months the FIA has changed its rules and commercial arrangements and will now take further measures to carry out its role as regulator of international motor sport without any commercial involvement," Mosley said. "This will eliminate all possibility of future conflicts of interest.

"The constructive dialogue we have been able to establish with the European Commission brings to an end a long-running and difficult dispute and will provide stability for all international motor sport, including Formula One. This is good for motor sport enthusiasts world-wide and for all those who work in one of the most popular of modern sports."