The Seventh Circuit heard oral arguments in Motorola Mobility v. AU Optronics, on Wednesday, November 12, 2014. The panel was U.S. Circuit Judges Richard A. Posner, Ilana Diamond Rovner and Michael S. Kanne. There is such a strong interest in this case, and the Foreign Trade Antitrust Improvements Act (“FTAIA”) generally, that I thought I’d share the link to the publicly available audio recording before adding a few quick thoughts of my own. The argument can be heard here.
Before you Listen
I have read many FTAIA cases and articles (and written a few) and I’m not ashamed to admit that I always go back and re-read this confusing statute before re-engaging with the FTAIA. In 1982 Congress sought to limit and define the extraterritorial application of the Sherman Act. The FTAIA says:
“Sections 1 to 7 of this title [the Sherman Act] shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless —
“(1) such conduct has a direct, substantial, and reasonably foreseeable effect —
“(A) on trade or commerce which is not trade or commerce with foreign nations [i. e., domestic trade or commerce], or on import trade or import commerce with foreign nations; or
“(B) on export trade or export commerce with foreign nations, of a person engaged in such trade or commerce in the United States [i. e., on an American export competitor]; and
“(2) such effect gives rise to a claim under the provisions of sections 1 to 7 of this title, other than this section.
“If sections 1 to 7 of this title apply to such conduct only because of the operation of paragraph (1)(B), then sections 1 to 7 of this title shall apply to such conduct only for injury to export business in the United States.” 15 U. S. C. § 6a.
The Supreme Court has explained: “This technical language initially lays down a general rule placing all (nonimport) activity involving foreign commerce outside the Sherman Act’s reach. It then brings such conduct back within the Sherman Act’s reach provided that the conduct both (1) sufficiently affects American commerce, i. e., it has a “direct, substantial, and reasonably foreseeable effect” on American domestic, import, or (certain) export commerce, and (2) has an effect of a kind that antitrust law considers harmful, i. e., the “effect” must “giv[e] rise to a [Sherman Act] claim.” §§ 6a(1), (2). F. Hoffmann-La Roche Ltd v. Empagran SA, 542 US 155 (2004).
Empagran involved the worldwide vitamin cartel. The cartel injured (i.e. overcharged) consumers in many countries. The vitamin cartel led to higher vitamin prices in the United States and independently also to higher vitamin prices in other countries. The Court concluded that, in this scenario, a purchaser in the United States could bring a Sherman Act claim under the FTAIA based on domestic injury, but a purchaser in Ecuador could not bring a Sherman Act claim based on foreign harm.
But, on to ….
The Argument (Recap): [Read more…]