The European Commission has announced that it is to end its observation of Formula One's business activities, confirming that it is now satisfied that restructuring between the FIA and Bernie Ecclestone has allowed the sport to fall within anti-trust guidelines.

Having decided to keep an eye on how the sport was run following an historic withdrawal from commercial involvement by the governing body in 2001, the EU has revealed that it is now sufficiently satisfied with progress to relax its monitoring of the situation. The FIA reached a deal with EU anti-trust officials to hand over all commercial interests in the sport to Ecclestone in 2001. The FIA also agreed not to restrict the formation of new series and championships.

The arrival of Mauro Monti as competitions commissioner allowed constructive progress to be made in the dispute, with FIA president Max Mosley subsequently offering to separate the FIA from direct financial benefits from the sale of F1's commercial rights, which were leased to the Ecclestone-owned FOA for 100 years. In return, Ecclestone agreed to reduce his role in FIA affairs.

"The Commission is satisfied that the conflict of interests identified in the FIA regulations and the restrictions that had been put on circuit owners, F1 teams and TV broadcasters have been ended," the EU announced in an official statement.

"This assessment comes after a period of monitoring compliance of the settlement reached in October 2001 with international motor racing body FIA and the Formula One companies. FIA's role is now limited to that of a sports regulator. Circuit owners can, if they wish, organise rival championships and car manufacturers will in the future be able to participate in races other than those organised by the Formula One company. Television contracts have also been significantly shortened, which allows broadcasters to bid for coverage of this popular sport at regular intervals.

"The F?d?ration Internationale de Sport Automobile [FIA] and the Formula One Administration [FOA] reached a settlement with the Commission in 2001. This ended a long investigation, triggered by a notification submitted by the parties themselves. The notification had highlighted a number of conflicts of interests and restrictions of competition linked to the commercial aspects of the sport.

"Under the terms of the settlement confirmed in October 2001, the FIA agreed, among other things, to limit its role to that of a sports regulator, to guarantee access to motor sport to any racing organisation meeting the requisite safety criteria and to no longer prevent teams and circuit owners not to participate in other races. The Commission announced it would monitor compliance with the undertakings.

"The Commission is satisfied that the parties have respected the terms of the settlement. They have modified the existing FIA/FOA agreement on the promotion of Formula One competitions to guarantee that FIA has no incentive to favour Formula One vis-?-vis other competition series existing or future. The FIA has also strengthened its internal and external appeals procedure.

"In addition, the FIA and SLEC/FOA, the companies in charge of the commercial exploitation of Formula One, introduced various changes in the commercial agreements concerning Formula One and, particularly, the television rights to the race - an aspect monitored closely by the Commission.

"In the last two years the FOA organised bidding tenders for the free-to-air TV rights, for example in France and in Italy, and reduced the duration of the contracts for the rights to five years for certain hosting broadcasters and to three years for other broadcasters.

"This ensures that broadcasters are given a chance at regular intervals to bid for a sports event that is as popular as the Olympic Games or the World Cup to the benefit of fans.

"The modifications introduced ensure a pro-competitive environment for the development of automotive sport activities within the European Union. The new model of organisation and commercial exploitation of motor sport events has proven to be both efficient and balanced by taking into account the specific character of sport and guaranteeing a reasonable degree of competition at the same time."

 

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