A bipartisan group of U.S. senators seeks an investigation into FOM’s refusal of Andretti-Cadillac’s F1 bid.
A bipartisan group of U.S. senators has called for an investigation into the FOM’s refusal to accept Andretti Global and Cadillac’s bid to join Formula 1 in the coming years.
The senators are concerned that FOM may have violated U.S. antitrust laws, given that the team was rejected by a decision-making group that included its potential competitors.
The project had received approval from the FIA, but FOM, along with existing teams, decided to reject Andretti’s application. The governing body cited reasons such as Andretti not adding enough value to Formula 1 and not being a competitive team.
Minnesota Democratic Senator Amy Klobuchar, Utah Republican Senator Mike Lee, and Indiana Republican Senator Todd Young have requested the DOJ to investigate this rejection, deeming it unusual. Their letter has been signed by several other senators.
This isn’t the first warning for FOM, as the U.S. Congress had already addressed the issue last month. Besides the DOJ, approached via Assistant Attorney General Jonathan Kanter, the senators are also appealing to the Federal Trade Commission, addressing the letter to its chair, Lina Khan.
Below is the full text of the letter:
Assistant Attorney General Kanter and Chair Khan,
We write to express our concerns that Formula 1 is acting at the behest of its independent teams and other key stakeholders, including foreign automakers, to exclude the team formed by the partnership of Andretti Formula Racing, LLC with General Motors (“Team Andretti-Cadillac”) from the Formula 1 championship. Such a refusal to deal, particularly if orchestrated by a collective boycott, could potentially violate U.S. antitrust laws.
Current F1 Championship Series Composition
The current Formula 1 (“F1”) championship series comprises ten teams, none of which field cars made in the United States with American-made components and driven by an American. There were eleven teams in F1 in 2016 and twelve in 2012. In February 2023, the Fédération Internationale de l’Automobile (“FIA”), the governing body of F1 and other motorsports, initiated a comprehensive application process to allow potential teams to fill vacant grid spots in F1. Among the applicants, only the Andretti-Cadillac team met the stringent criteria set by the FIA.
Following this approval, the commercial terms for Andretti-Cadillac’s participation in F1 were to be negotiated with Formula One Management (“FOM”). Instead of negotiating these terms, FOM unilaterally rejected Andretti-Cadillac’s application. FOM claimed that Andretti-Cadillac would not benefit F1 financially and would not be competitive, “especially for podiums and race wins.” This stands in stark contrast to the technical approval given prior to commercial negotiations. Moreover, the majority of F1 teams do not win races in a given season. In 2023, one team won all but one race, and half of the F1 teams have not won a race in the past four seasons combined. This competitive imbalance has not been a hallmark of F1, and adding a team backed by a major American automaker is likely to enhance competitiveness rather than diminish it.
FOM also expressed concerns about Andretti-Cadillac obtaining a “power unit” (engine), despite acknowledging that “GM has the resources and credibility to be fully capable of meeting this challenge.” Indeed, there are only four engine manufacturers, and the entry of GM would increase competition in this highly specialized market.
FOM’s Determination and the U.S. Market
The most striking aspect, however, has been FOM’s insistence that the inclusion of the Andretti-Cadillac team in F1 would not add value to the championship. Despite not currently having an American team, F1 is committed to expanding its presence in the U.S. market. In recent years, more than a million Americans have watched each F1 race, a figure that has more than doubled over the past few seasons. Last year, F1 held three races in America—in Miami, Las Vegas, and Austin—whereas no other country hosted more than one race. Even individual teams, like Red Bull, are courting American fans by hosting events in U.S. cities to “bring the marvel of F1 engineering up close and personal, gathering F1 fans.” Clearly, there is a financial incentive to add an American team to the F1 roster, and there is no reason for the Andretti-Cadillac team to be blocked unless FOM is attempting to shield its current partners from competition.
Given these facts, we strongly suspect that the rejection of the Andretti-Cadillac team is based on a desire to exclude a competitor from the circuit, marketing opportunities, and the prestige that participating in F1 can confer on an automaker looking to sell cars globally. While FOM claims it did not consult current teams before rejecting the Andretti-Cadillac team, it did refer to consultations with “key stakeholders,” which likely include team sponsors, notably automakers who directly compete with General Motors and Cadillac. The possibility that F1 stakeholders may have engaged in concerted action to exclude the Andretti-Cadillac team, especially after it met all technical requirements to join F1, warrants an investigation.
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