Andretti F1: Liberty Media run-ins with Department of Justice go way further back

Liberty Media is currently facing an investigation by the Department of Justice’s antitrust division regarding F1’s denial of Andretti Global’s team entry.

Mass media conglomerate Liberty Media is the owner of the Formula One Group, which has placed it at the center of a current antitrust investigation initiated by the Department of Justice due to F1’s rejection of Andretti Global’s team bid.

However, this is not Liberty Media’s first run-in with the DOJ. The American company has faced other investigations by the DOJ’s antitrust division, which we’re discussing in order to provide context regarding the American legal justice system.

Liberty Media, Andretti F1 bid, and the DOJ

Liberty Media is an American mass media company founded by billionaire John C. Malone in 1991. By the end of 2024, the company will have four major divisions based on its assets: the Formula One Group, Sirius XM, Live Nation Entertainment, and Dorna Sports, which is the owner of MotoGP.

However, the company was first started as a spin-off of a US cable television group called Tele-Communications Inc., before merging back with Tele-Communications in 1994. This move kicked off the company’s first run-in with the DOJ’s antitrust division.

Antitrust laws are federal laws that regulate commerce in the United States in order to promote competition and prevent massive monopolies. There are three major antitrust statutes that dictate American business: the Sherman Act, the Clayton Act, and the Federal Trade Commission Act.

In effect, these three acts prevent things like price fixing or the operation of cartels, while it also regulates mergers and acquisitions that may reduce competition and/or create a monopoly. This is because monopolies stifle the free trade of the American economic ethos; a monopoly means there are no competitive options for customers looking to access a certain service, and so the company can charge customers an exorbitant amount for those services.

Liberty Media’s first DOJ run-in came with the aforementioned merger with Tele-Communications Inc., which the DOJ investigated in the event that it were to violate Section 7 of the Clayton Act, which is designed to prevent monopolies.

Effectively, the DOJ wanted to investigate the likelihood that Liberty Media and Tele-Communications Inc. would partner together with the intention of exerting total control over the multichannel television subscription market.

The initial complaint was filed in April of 1994, with the final judgement coming in August. The DOJ determined that the merger was legal so long as it did not discriminate against independent programmers, and it proceeded as normal.

This, though, was not Liberty’s only involvement with the DOJ.

More on Liberty Media and its F1 involvement:

 F1 owners accused of ‘cartel-type behaviour’ as US Congress demand answers to three Andretti questions

 Huge twist in Sergio Perez saga as Liberty Media involvement rumours arise

Its next run-in came in the late 1990s, when AT&T became the successor to Tele-Communictions Inc.; that judgement was terminated when TCI agreed to sell part of its ownership stake of the Sprint Corporation.

Later, in 2009, Liberty Media head John C. Malone faced an additional investigation when he violated the notice and waiting requirements of the Hart-Scott-Rodino Act; basically, he purchased voting securities of Discovery without filing any notifications with the DOJ or the Federal Trade Commission. Malone was ordered to pay a $1.4 million penalty.

It is important to note here that these are fairly standard investigations; they do not indicate that Liberty Media is anything other than a large business operating on a large scale.

When it comes to the situation with Andretti Global, we are still largely in the dark. The Department of Justice declined to comment on the nature of the investigation.

However, six US Senators filed a letter with the DOJ asking for this investigation; here, their argument stemmed from the fact that Formula 1 is “acting at the behest of its independent teams… including foreign automakers” when it comes to banning Andretti and Cadillac.

The antitrust implications here rest in the fact that the Formula One Group — which is owned by Liberty Media and which is responsible for the promotion of F1 and for exercising its commercial rights — could have been influenced to reject Cadillac by the likes of foreign automakers: Ferrari, McLaren, Aston Martin, Mercedes, and more.

Because Liberty Media is an American company, it will have some element of responsibility in enduring it does not effectively create a monopoly that prioritizes foreign automakers over an American automaker like Cadillac.

However, it is unclear to what extent the Andretti Global team can play into the ongoing investigation, as the US Senators wrote to the DOJ that they were also concerned about “key stakeholders” denying Andretti Global its entry.

Read next: Andretti F1 twist as Department of Justice launches Liberty Media antitrust probe