The Formula One Teams Association was created at a meeting in Maranello on 29 July 2008. Its founding purpose was to give the teams a collective voice in negotiations with the FIA and the Formula One Group over the terms of the Concorde Agreement, the commercial contract governing the championship. Ferrari Chairman Luca di Montezemolo initially led the association.
In May 2009 the FOTA teams announced they would not enter the 2010 championship unless the FIA withdrew or substantially modified its proposed regulations. The central grievance was the introduction of a 40 million pound budget cap. Most FOTA members regarded the cap as unworkable and incompatible with their commercial structures. Williams and Force India broke ranks as the 29 May deadline approached, lodging their 2010 entries independently and being promptly suspended from FOTA membership.
With negotiations stalled, FOTA announced on 18 June 2009 the formation of a rival Grand Prix World Championship series, threatening to stage their own independent championship from 2010. Williams and Force India indicated they would not join any breakaway because of their contractual obligations to the FIA. Within days the threatened split dissolved: on 24 June 2009 FOTA reached an agreement with the FIA on the 2010 season rules and abandoned the breakaway plan.
The dispute then entered a second phase. On 8 July 2009 the eight FOTA teams walked out of a meeting at the Nurburgring convened to discuss 2010 regulations, accusing the FIA of putting the sport in jeopardy. FOTA claimed that Charlie Whiting had informed them that all eight member teams were not entered in the 2010 championship, despite having been included on the FIA's own accepted entry list as endorsed by the World Motor Sport Council and announced in an FIA press statement on 24 June. FOTA had requested a postponement of the 8 July meeting, which the FIA rejected on the grounds that no new Concorde Agreement would be concluded without unanimous approval of the 2010 regulations. The FOTA representatives, finding themselves unable to exercise their rights in the Technical Working Group, terminated their participation.
The parties reached a comprehensive settlement at a meeting of the FIA World Motor Sport Council on 31 July 2009. A new Concorde Agreement was signed, along with agreed resource restrictions and revised sporting and technical regulations for 2010. All FOTA teams signed the agreement except BMW Sauber, which had announced its withdrawal from Formula One two days earlier for unrelated reasons.
On 9 September 2009 FOTA held a meeting at Monza and readmitted Williams and Force India to full membership. By 26 November 2009 the final two new teams for the 2010 season had also joined, making all twelve 2010 entrants FOTA members. The association continued to function as a forum for team interests and participated in discussions about future Formula One regulations under new chairman Martin Whitmarsh, who replaced Montezemolo in December 2009. Hispania Racing left in December 2010 following a dispute over the association's internal politics, while Red Bull Racing, Scuderia Ferrari, Sauber, and Scuderia Toro Rosso all departed by early December 2011 as individual team agreements ahead of a new Concorde Agreement made the collective body redundant. FOTA was formally dissolved in February 2014, citing lack of funds and an inability to agree a revised mandate.