JUNE 1, 1998
Mosley versus Van Miert
AS we predicted a month ago the FIA is to sue the European Commission for damages resulting from press leaks by the European Competition Commissioner Karel Van Miert and his staff which has harmed the reputation of the sport's governing body and its business transactions. The FIA had been expected to gain as much as $250m worth of shares in Bernie Ecclestone's Formula One Holdings if the flotation had not been blocked by Van Miert.
Ecclestone has been trying to get clearance for the flotation since last September but the European Commission has been blocking the deal because it claims that the agreements include restrictive practices and the abuse of a dominant position. If the flotation goes ahead Ecclestone is expected to make something in the region of $1.3bn while also retaining 30% of the shares in the company. The F1 teams are also expected to get shares worth $250m.
Van Miert said that the announcement of the FIA's legal action was "an attempt at intimidation which will not change anything". He added that his staff was continuing its procedures. Van Miert is protected from legal action against his person because he was acting as a European Commission official when he leaked the disputed documents to the press in Belgium.
Mosley is clearly expecting the legal battle with the European Union to be a bitter one and we understand that the FIA is gearing up to move out of European jurisdiction by relocating its headquarters to Switzerland, which is not part of the European Union. At the moment the FIA is in Paris.
We understand that the governing body is being advised by Justice Sir Anthony Lincoln, a judge specializing in libel and restrictive practices, who was President of the Restrictive Practices Court in London until his retirement. If the FIA decides to pursue the case it will go to the European Court of Justice in Luxembourg.
It is interesting to note that Bernie Ecclestone is not planning similar action and he has been surprisingly quiet in recent weeks about the European Commission. We believe that Bernie has decided to leave the legal fighting to the FIA and try to find a compromise with regard to his own plans to float FOH.
Van Miert is a particularly combative commissioner and to date has shown little trepidation in the fear of such industry giants as Lockheed and McDonnell Douglas. Last week his blocking of a merger between the German TV stations owned by Kirch and Bertelsmann dealt a serious blow to Kirch, which has been struggling to keep its DF1 pay-per-view channel running. This could also be bad news for Ecclestone as DF1 was due to provide a sizeable percentage of F1's digital TV income in the years ahead.
Van Miert was, however, rather less effective when he tried to stop the French government bailing out the disastrous state-owned Credit Lyonnais bank. Last week he backed down in the face of French pressure despite the fact that allowing the French to prop up the lame-duck bank is widely seen as being an anti-competitive move.
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