Withdrawal of the EU complaint - the reasons behind it

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On 25 January it was announced that the Force India and Sauber teams have withdrawn the complaint they lodged with the European Commission on the subject of anti-competitive practices in the sport of Formula 1.

The complaint was filed with the EU in 2015, prior to the takeover of the Commercial Rights of Formula One by Liberty Media. After F1 supremo Bernie Ecclestone did not want to make any changes to the financial model of the sport and the way the income is shared among the teams, Force India and Sauber lodged a complaint with the Brussel-based EU Commission.

The EU institution would have had to investigate whether the leading F1 teams were favoured and whether the allegedly unfair treatment against the smaller teams put them in financial difficulties and therefore their employees in danger.

However, before the officials could have made their decision, the Sauber and the Force India teams have withdrawn their complaint with immediate effect.

“We have been greatly encouraged by the dialogue that has been introduced following the appointment of Chase Carey as Executive Chairman and CEO of the Formula 1 commercial rights holder and his new management team,” read a joint statement from Force India and Sauber.

“Their approach has brought a new culture of transparency to the sport and illustrates willingness to debate fundamental issues such as the distribution of the prize fund monies, cost control and engine regulations. We are encouraged and reassured by the even-handed and fair negotiating approach taken by the new management of Formula 1 to all the teams and their issues.”

The Concorde Agreement is in force until the end of 2020 which means the new contract which will be the eighth edition of the Concorde Agreement could bring a more fair way of the division of the income.

The Concorde Agreement dictates the terms by which the teams compete races and how the television revenues and prize money is divided among them. The first agreement was created back in 1981 which was followed by the 1987, 1992, 1997, 1998, 2009 and the current 2013 agreement. The most important reason for creating this document was the obligation of the teams to participate in every race, hence making the sport more reliable for broadcasters who were expected to invest heavily to acquire television broadcast rights. In return the teams were guaranteed a percentage of the sport's commercial revenue.

The withdrawal of the complaint of the two F1 teams came with surprise and might indicate that they were guaranteed by the new Commercial Rights Holder, Liberty Media that the new Concorde Agreement will see changes which are aimed to help the smaller teams in financial terms, probably in the form of a budget cap.