Dear Assistant Attorney General Kanter and Chief Khan,
We write because we are concerned that Formula 1 is acting at the request of its independent teams and other “key stakeholders,” including foreign automakers, to exclude the team formed by Andretti Formula Racing, LLC in partnership with General Motors (“Andretti-Team Cadillac) from entering the Formula One Championship Series and such a refusal to deal – especially if organized through a mass boycott – could potentially violate US antitrust laws.
The Formula One (“F1”) Championship Series currently has 10 teams; However, neither team drives an American-made car with American-made components driven by an American. Eleven teams competed in Formula 1 until 2016 and 12 competed in 2012. In February 2023, a comprehensive application process was opened by International Automobile Federation (“FIA”), the governing body for Formula 1 and other motor sports, to allow potential teams to fill vacant places on the Formula 1 grid. Of the applicants, the Andretti-Cadillac team was the only one that met the stringent criteria set by the FIA.
Following approval, commercial terms for the Andretti-Cadillac Team's participation in Formula 1 were to be negotiated with Formula One Management (“FOM”). Instead of negotiating commercial terms, FOM unilaterally rejected the Andretti-Cadillac team's request. The FIA assumed that the Andretti-Cadillac team would not benefit Formula 1 financially and would not be able to compete, “especially for podiums and winning races.” This is in stark contrast to the technical approval granted prior to commercial negotiations. Furthermore, the vast majority of Formula 1 teams fail to win races in a given season. In 2023, one team has won all but one race, and half of the teams in Formula 1 have failed to win a race in the past four seasons combined. This competitive balance has not been the hallmark of Formula 1 racing, and the addition of a team backed by a major American automaker would likely enhance, not diminish, competitiveness.
FOM also expressed concern about the Andretti-Cadillac team needing to secure the “power unit” (engine), although it was stated that “GM has[s] the supplier[s] And the credibility to be more than capable of attempting this challenge [of developing a power unit]“It is worth noting that there are only four manufacturers that make power units, and the addition of GM will increase competition in this very niche market.
But what is most striking is the FOM's determination that bringing the Andretti-Cadillac team into Formula 1 will not “add value to the championship”. While Formula 1 does not currently have a team based in the United States, Formula 1 is determined to increase its presence in the American market. Over the past few years, more than a million Americans have tuned into every Formula 1 race, more than doubling over the past few seasons. Last year, Formula 1 hosted three races in America, in Miami, Las Vegas, and Austin, while no other country hosted more than one race. Even individual teams, such as Red Bull, are courting American fans by hosting events in American cities “to get up close and personal with the marvel of Formula 1 engineering, bringing Formula 1 fans together.” There is clearly a financial incentive to add an American team to the Formula 1 roster, and there is no reason why the Andretti-Cadillac team could not be held unless FOM tries to isolate its current partners from the competition.
Given these facts, we have serious concerns that the Andretti-Cadillac team's rejection was based on a desire to exclude a competitor from the racetrack, the marketing opportunities, and the prestige that competing in Formula 1 would give an automaker competing to sell cars across the world. Earth. While FOM claims it did not consult with existing teams before rejecting the Andretti-Cadillac team, it specifically points to consultations with “key stakeholders,” which likely include team sponsors, including automakers that compete directly against General Motors and Cadillac. Formula 1 stakeholders may have engaged in coordinated actions to disqualify the Andretti-Cadillac team – especially after it met all the technical requirements to join Formula 1 – which is worth investigating.
We appreciate your interest in this important issue.
