Skip to main content
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Find a Lawyer

More Options

Motorola's Price Fixing Antitrust Claims Mostly Fail

By Gabriella Khorasanee, JD on April 07, 2014 | Last updated on March 21, 2019

Motorola has been involved in antitrust litigation for the past five years with AU Optronics, and other defendants, who are part of an alleged foreign price fixing cartel. In one fell swoop, Judge Posner eliminated 99% of Motorola's claim -- what will happen next remains to be seen.

The Sherman Act Claims

Motorola claims that it purchased over $5 billion worth of LCD panels to incorporate them into cell phone manufactured either by Motorola, or its subsidiaries. The breakdown of the claim is as follows: 1 % were bought by and delivered to Motorola in the U.S.; 42% were bought by Motorola foreign subsidiaries and incorporated into products that were shipped to Motorola for resale in the U.S.; and the remaining 57% were bought by foreign subsidiaries and never even entered the U.S. The only sales at issue are the 42%, and Motorola received a little benchslap from Posner when he noted that the inclusion of the 57% was "a frivolous element of Motorola's claim."

Motorola alleged antitrust price fixing violations of the Sherman Act, and on motion for summary judgment, the district court held that the 42% were barred by the Foreign Trade Antitrust Improvements Act ("FTAIA"), and this interlocutory appeal followed.

The panel of the Seventh Circuit agreed that the FTAIA barred Motorola's claim because the alleged conduct must be "direct, substantial, and [have a] reasonably foreseeable effect on trade." Here, Judge Posner distinguished an earlier Seventh Circuit opinion and stated, "The effect of component price fixing on the price of the product of which it is a component is indirect ...". He further noted that the present case is one that would be precluded by the FTAIA: "[a] situation in which action in a foreign country filters through many layers and finally causes a few ripples in the United States."


This case can have a wide-reaching effect if other circuits adopt a similar position in our global manufacturing economy. It's likely other circuits will take heed, just as Judge Posner did, of the Supreme Court's warning that "rampant extraterritorial application of U.S. law 'creates a serious risk of interference with a foreign nation's ability independently to regulate its own commercial affairs.'"

Related Resources:

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:
Copied to clipboard