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Friday, September 20, 2024

Senators urge DOJ and FTC probe into exclusion of Andretti-Cadillac from Formula One

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Senator Todd Young, US Senator for Indiana | Official U.S. Senate headshot

Senator Todd Young, US Senator for Indiana | Official U.S. Senate headshot

On May 21, 2024, U.S. Senators Todd Young (R-Ind.), Amy Klobuchar (D-Minn.), and Mike Lee (R-Utah) urged the Department of Justice Antitrust Division and the Federal Trade Commission to investigate the exclusion of Andretti Formula Racing, LLC (“Team Andretti-Cadillac”) from entering the Formula One (F1) Championship series. The American racing team, backed by General Motors, met all requirements set by the Fédération Internationale de l’Automobile (FIA) but was denied entry by F1's commercial arm.

The senators expressed concerns that F1’s members and sponsors might have excluded Andretti-Cadillac to protect themselves from competition. "We write because we are concerned that Formula One is acting at the behest of its independent teams and other 'key stakeholders,' including foreign automakers, to exclude Andretti Formula Racing, LLC’s partnership with General Motors (GM) ('Team Andretti-Cadillac') from entering the Formula One Championship series," they wrote. "It is possible that such a refusal to deal—especially if orchestrated through a group boycott—could violate U.S. antitrust laws."

Senators Gary Peters (D-Mich.), Debbie Stabenow (D-Mich.), Alex Padilla (D-Calif.), and Mike Braun (R-Ind.) also signed the letter.

In February 2023, FIA opened an application process for prospective teams to fill vacant spots on the F1 grid. Among applicants, only Team Andretti-Cadillac met FIA's criteria. However, instead of negotiating commercial terms as expected, Formula One Management (FOM) rejected their application on grounds that it would not benefit F1 financially or be competitive.

The lawmakers highlighted inconsistencies in FOM's reasoning, noting that many current F1 teams do not win races regularly and that adding a team backed by a major U.S. car manufacturer could enhance competitiveness. They also pointed out that while GM has resources to develop a power unit, FOM raised concerns about this aspect.

Moreover, they questioned FOM's claim that adding Team Andretti-Cadillac would not "add value to the Championship," especially given F1's growing presence in the U.S., where viewership has more than doubled recently.

"Given these facts," they concluded, "we have serious concerns that the rejection of Team Andretti-Cadillac was based on a desire to exclude a rival from the racetrack, marketing opportunities, and prestige that competing in F1 can lend to a car manufacturer competing to sell cars across the globe."

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