Espionage in Formula 1: McLaren vs Ferrari 

McLaren and Ferrari are two of the most successful teams in Formula 1 history. The historic rivals have always been competitive against each other, but things reached a boiling point in the 2007 season.

McLaren accused of espionage

At the 2007 Indianapolis Grand Prix, Ferrari lodged a formal complaint against Ferrari's Head of Team Performance Development, Nigel Stepney, after discovering irregularities at their factory. Soon after, Italian media reported that Stepney had been dismissed following an internal investigation by the Maranello-based team.

The team subsequently announced that it had also taken action against a McLaren employee for the theft of technical information. The employee was later named to be McLaren's Senior Engineer, Mike Coughlan. Ferrari released a press statement regarding the same:

Ferrari announces it has recently presented a case against Nigel Stepney and an engineer from the Vodafone McLaren-Mercedes team with the Modena Tribunal, concerning the theft of technical information. Furthermore, legal action has been instigated in England and a search warrant has been issued concerning the engineer. This produced a positive outcome.

Nigel Stepney. Photo: Mark Thompson/Getty Images.

As a result of the search warrant for Coughlan's home, documents belonging to Ferrari's factory at Maranello were found. Mike Coughlan was suspended by McLaren shortly thereafter.

Ferrari were unaware of the theft until they received a tip from an employee at a photocopying shop. After replicating the documents, the employee saw the pages were marked confidential, which prompted him to contact Ferrari.

In response to Ferrari's announcement, McLaren and Ron Dennis released a statement of their own:

No Ferrari intellectual property has been passed to any other members of the team or incorporated into our cars. In order to address some of the speculation McLaren has invited the FIA to conduct a full review of its cars to satisfy itself that the team has not benefited from any intellectual property of another competitor.

Legal ramifications

On 10 July 2007, a High Court hearing was opened. The court required Coughlan to submit an affidavit.

Coughlan did not comply with the Italian court, instead choosing to reach an agreement with Ferrari. As part of the agreement, Ferrari dropped its criminal case against Coughlan in return for full disclosure of the events around the situation.

Ron Dennis. Photo: Pascal Parrot/Getty Images.

FIA's intervention

McLaren complied with FIA by handing over documents showcasing the development of their car since April, to prove that no components of the car had come from Maranello-based designs. After the British Grand Prix, the FIA summoned McLaren to a World Motorsport Council meeting.

At the hearings, it was established that Coughlan had received technical information from Stepney. In doing so, McLaren breached 151C of the International Sporting Code. However, the FIA found no evidence of the stolen information being used by McLaren and therefore imposed no punishment. The FIA also reserved the right to further investigate if new evidence came to light.

Bernie Ecclestone leaves at the FIA headquarters after the hearing. Photo: Pascal Parrot/Getty Images.

Ferrari were understandably furious with the FIA's decision, and launched an appeal. The appeal led to a $100 million penalty imposed upon McLaren for illegally collecting and holding confidential information to gain a sporting advantage. They were also disqualified from gaining points in all rounds of the 2007 constructors' championship. Additionally, the team would also have to submit their 2008 chassis for scrutiny.

Legacy of the verdict

The $100 million fine remains one of the largest penalties in the history of sports. Ferrari were given justice, both on and off the track, as Ferrari's Kimi Raikkonen won the drivers' championship by a single point over McLaren's Hamilton and Alonso.