Motorola Mobility's Price-Fixing Appeal Rejected by US Court

Advertisement
By Reuters | Updated: 27 November 2014 10:07 IST
A federal appeals court rejected Motorola Mobility LLC's bid to sue several Asian suppliers under U.S. antitrust law for fixing prices of mobile phone displays sold to its foreign units.

Wednesday's decision by the 7th U.S. Circuit Court of Appeals in Chicago may lessen protections against inflated prices for U.S. consumers who buy cellphones, computers and other products whose components are made outside the country.

Circuit Judge Richard Posner said Motorola could not invoke U.S. antitrust law because the "immediate victims" had been non-U.S. subsidiaries that had bought most of the liquid crystal display screens that carried inflated prices.

Advertisement

While Motorola, a unit of China's Lenovo Group Ltd, claimed it paid the defendants more than $5 billion (roughly Rs. 30,900 crores) during a conspiracy that ran from 1996 to 2006, only 1 percent of the components were shipped to the United States.

"Motorola's foreign subsidiaries were injured in foreign commerce - in dealings with other foreign companies," Posner wrote for a three-judge panel.

Advertisement

"To give Motorola rights to take the place of its foreign companies and sue on their behalf under U.S. antitrust law would be an unjustified interference with the right of foreign nations to regulate their own economies," he added.

The defendants include AU Optronics Corp, Chunghwa Picture Tubes Ltd, HannStar Display Corp, LG Display Co, Samsung Electronics Co, Samsung SDI Co, Panasonic Corp's Sanyo unit, Sharp Corp and Toshiba Corp.

Advertisement

Some LCD makers have pleaded guilty to U.S. criminal price-fixing charges. Wednesday's decision limits the scope of Motorola's separate, civil lawsuit, which also alleged violations of state antitrust and consumer protection laws.

The civil case had also drawn concern from the court that Motorola was trying to obtain U.S. antitrust protections even as it shifted tax burdens to other countries.

Advertisement

Motorola, which is based in Chicago, denied that accusation, saying it repatriated foreign profits and paid U.S. taxes.

Unfriended
"The court's opinion basically says that Motorola can't have it both ways," said Robert Wick, a partner at Covington & Burling who represents Samsung Electronics and argued the defendants' case before the 7th Circuit on Nov. 13. "Motorola can't be a foreign company for purposes of manufacturing phones, but a U.S. company when it comes to asserting antitrust claims."

Motorola spokesman Will Moss said: "We disagree with the decision, and are considering our options."

Posner said Motorola and its customers were only "indirect" purchasers of the LCD screens, and that Motorola's claims were barred under a 1982 law limiting antitrust claims against non-U.S. companies to conduct directly linked to domestic commerce.

Of the screens shipped to non-U.S. factories, 42 percent were used in products sold in the United States, and 57 percent in products sold elsewhere.

The U.S. Department of Justice and Federal Trade Commission had submitted a brief urging that U.S. antitrust law did cover the price-fixing conspiracy.

But Posner said the government stopped short of saying Motorola deserved antitrust damages, and merely sought assurance that U.S. efforts to obtain criminal and civil sanctions against foreign companies for antitrust violations would not be impeded.

"Motorola has lost its best friend," Posner said, referring to the government.

A Justice Department spokesman said the government is pleased the court recognized the "propriety" of its efforts to protect U.S. consumers from non-U.S. price-fixing cartels.

Lenovo bought Motorola Mobility for $2.91 billion (roughly Rs. 17,989 crores) in October from Google Inc, which had purchased the company two years earlier.

The case is Motorola Mobility LLC v. AU Optronics Corp, et al, 7th U.S. Circuit Court of Appeals, No. 14-8003.

© Thomson Reuters 2014

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Advertisement

Related Stories

Popular Mobile Brands
  1. Asus ExpertBook Ultra Debuts in India Alongside New ExpertBook Models
  2. Control Ultimate Edition is Now Available on iPhone and iPad
  3. Motorola Edge 70 Pro Arrives With a 6,500mAh Battery at This Price in India
  4. Sennheiser CX 80U, HD 400U With USB Type-C Connectivity Launched in India
  1. NASA’s Curiosity Rover Finds Crater Filled With Sand, Alters Drilling Plans
  2. Control Ultimate Edition Arrives on iPhone and iPad With Touch Controls, Universal Purchase
  3. Asus ExpertBook Ultra With Intel Core Ultra X7 Series 3 CPU Launched in India Alongside ExpertBook P3, ExpertBook P5 Series
  4. Boat Aavante Prime X Soundbar Launched in India With Dolby Atmos, Wireless Satellite Speakers: Price, Features
  5. Qualcomm CEO Reportedly Visits Samsung Foundry in Korea to Discuss Producing 2nm Chips
  6. Coinbase Announces USDC-INR Trading Services for Users in India
  7. Redmi K Pad 2 Launched With 8.8-Inch 3K Display, Dimensity 9500 Chip: Price, Specifications
  8. Suyodhana OTT Release Date: When and Where to Watch This Telugu Mystry Thriller Online?
  9. OnePlus Watch 4 Launch Appears Imminent as Listing Confirms Snapdragon W5 Chip, OxygenOS Watch 8
  10. Sennheiser CX 80U, Sennheiser HD 400U With USB Type-C Connectivity Launched in India: Price, Features
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.