In this issue:

In Motorola Mobility, the Seventh Circuit is readying to rehear a lawsuit that will (hopefully) clarify the extent of U.S. antitrust law’s reach outside of the United States. The issue concerns the Foreign Trade Antitrust Improvements Act, which was ostensibly passed to clarify the reach and limits of the Sherman Act for U.S. companies doing business abroad. However, given divergent court opinions, matters have become quite messy. This issue will bring you up to date on the history, the issues, and the significant ramifications at stake. As Eleanor Fox writes in her article, this situation raises the possibility that “U.S. law is in danger of creating a void in the reach of U.S. antitrust law to reprehend anticompetitive acts by foreigners abroad destined to raise the price of goods and services to U.S. consumers.”

The FTAIA and the Sherman Act: Motorola Mobility and Other Cases

Joseph Harrington, Sep 17, 2014

Motorola Mobility and the FTAIA: A Deterrence-Based Definition of “Direct” Effect

Potentially even more detrimental to the cause of preventing harm to U.S. commerce, the Seventh Circuit’s definition of “direct” effect would seem to provide a vertical disintegration loophole for avoiding liability. Joseph E. Harrington, Jr. (Wharton, Univ. of Pennsylvania)

Eleanor Fox, Sep 17, 2014

Extraterritoriality and Input Cartels: Life in the Global Value Lane—The Collision Course with Empagran and How to Avert It

There is a looming danger that judge-made exceptions from U.S. antitrust law for foreign conduct are swallowing the proscriptions of the Sherman Act against modern-style international cartels. Eleanor Fox (NYU School of Law)

Randy Stutz, Sep 17, 2014

Comity, Domestic Injury, and the Metaphysics of the FTAIA

Why is it unreasonable to apply [the antitrust] laws to foreign conduct insofar as that conduct causes domestic harm that is dependent on the foreign harm that gives rise to the plaintiff’s claim? Randy M. Stutz (American Antitrust Institute)

David Barth, Sep 17, 2014

Deterrence and Efficiency Considerations Warrant an Expansive Reading of the FTAIA

A ruling benefiting defendants would increase the incentives foreign firms have to engage in cartel behavior, and it would create new incentives to change otherwise efficient supply chain behavior. David Barth (Bates White Economic Consulting)

James Martin, Sep 17, 2014

Fermat’s Principle and the FTAIA: What Courts Can Learn From Optics

The much simpler, and mathematically sensible, approach would be to acknowledge that the cartelists’ guilty pleas and jury verdict already established that the Sherman Act applies to the conduct. James R. Martin (Dickstein Shapiro)

Robert Connolly, Sep 17, 2014

Repeal the FTAIA! (Or At Least Consider It as Coextensive with Hartford Fire)

Besides having some unpleasant side effects, the FTAIA is simply unneeded. Robert E. Connolly (GeyerGorey)