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Race Cartels: How Constructor Collaboration Is Curbing Innovation in Formula 1

Posted by on Tuesday, May 25, 2021 in Notes, Volume 23, Volume 23, Issue 4.

Chandler C. Gerard-Reimer | 23 Vand. J. Ent. & Tech. L. 855 (2021)

Formula 1 is in the midst of a copycat scandal: technology has made it possible for teams to reverse engineer clones of competitors’ race cars. This is a less than ideal state of affairs for the championship series, which prides itself on being the pinnacle of motorsport and automotive innovation, thanks in large part to the cars’ rapid rate of technological advancement. In order to address this problem, the Fédération Internationale de l’Automobile (FIA), Formula 1’s governing body, must increase independent innovation efforts by amending the technical regulations to restrict the extent of presently allowed inter-team collaboration. Worried that the sport was becoming a “copying championship,” the FIA adopted new measures that ban extreme reverse engineering methods. Because these new FIA regulations do not limit the degree of coordinated conduct between teams, this approach will likely fail to remedy the sport’s copying problem because team plagiarism is an anticompetitive side effect of this collusive behavior.

The FIA addresses the copying problem as one of trade secret misappropriation. By contrast, this Note approaches the issue as one of unregulated anticompetitive conduct. Analyzing the technical partnerships in Formula 1 under antitrust law elucidates their harmful effects on the racing series. This Note urges the FIA to adopt measures that limit Formula 1 teams’ ability to collaborate, before the “A-B team” phenomenon further diminishes the sport’s innovation efforts.

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Chandler C. Gerard-Reimer