<
>

Brexit, the European Union and Formula One

Christopher Furlong/Getty Images

There has been an awful lot of chatter in the paddock about the UK's forthcoming European Union (EU) referendum, and who wants to Brexit and who wants to Bremain.

Bernie Ecclestone - hardly a man known for mincing his words - said last month that he was in favour of Brexit, but had no intention of casting a vote. "I think Europe has become less important, full stop," the F1 boss said at April's Advertising Week Europe before adding that he thought the UK should "get the hell out".

Asked for their opinions on the impact a leave vote could have on Formula One, the team personnel at Spain's Friday's FIA press conference all neglected to answer, with all those present trotting out variations on the theme of "we don't talk about politics", even though the question asked was not about the politics of the referendum, but of the practicalities of the potential aftermath.

One thing that will not change irrespective of the outcome of the British referendum is the European Commission's interest in our sport, namely the investigation into anticompetitive practices within Formula One and allegations that the sport operates as a cartel.

And according to F1 supremo Bernie Ecclestone, the EU's interest is waxing, not waning. "The European Commission is beginning to be a little more interested in Formula One and whether the competition laws are respected," Ecclestone told Auto Motor und Sport earlier this month. "If they really have doubts, it could mean the contracts must be torn up before 2020."

Sauber and Force India - the two teams who first requested that the European Commission take a closer look at the sport's practices - are based in Switzerland and Britain respectively. Switzerland is not a member of the EU, but is part of the European Economic Area and subject to market rules. If the United Kingdom votes to leave next month, some form of treaty allowing market access in exchange for obedience to market rules will be signed.

As a consequence, any progress that the Commission makes with its F1 investigation will continue irrespective of the result of the British referendum.

There are additional motives, of course. While the EU's active interest in Formula One is probably limited at best, there is also the matter of saving face, as MEP Anneliese Dodds unwittingly revealed when she first pushed for an investigation into the sport's business practices.

"We have already seen the EU getting left behind as the US and Switzerland launched an investigation into FIFA. Following complaints within the sport of F1, the EU must take the lead on a sport loved by many across Europe," Dodds said when the complaint was first launched.

Europe was, to put it crudely, caught with its pants down when US federal prosecutors last year raided FIFA and started arresting officials left, right, and centre. Few on the continent thought that the International Federation of Association Football was operating entirely within the law, but despite the open secret of corruption and alleged dodgy dealings no European agency had taken action against activities taking place on their home turf. Instead, it was up to the FBI and the US Attorney General to indict members of the FIFA hierarchy for charges including wire fraud, racketeering, and money laundering.

When news of F1's EU competition complaint first broke, it was analysed by legal minds on both sides of the Atlantic. Given the differing legal systems in place in Europe and the United States, it is hardly surprising that opinions on the likely outcome differed.

Ankur Kapoor and Richard Pike, both of Constantine Cannon LLP (one based in the US and the other the UK) analysed the complaint in December last year, and determined that "it could be interesting to see what might happen, though, if anyone decided to 'put the pedal to the metal' and pursue an antitrust case in the U.S. courts. U.S. and EU law might look similar on their face but private treble damages claims in the U.S. courts would arguably look a lot more threatening to Formula One authorities, and the leading teams, than any possible investigation by [the European Commission's Competition Directorate]."

Odd as it might seem, it is in the interests of F1's stakeholders to ensure that the European Union finds against them before the Americans decide that it behoves them to get involved...