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U.S. Court Rejects Motorola Mobility Price-Fixing Appeal

U.S. antitrust law doesn't apply in LCD pricing dispute among foreign companies, says panel.

A federal appeals court on Wednesday rejected Motorola Mobility’s attempt to hold several Asian suppliers liable under U.S. antitrust law for fixing prices of mobile phone displays sold to its foreign units.

The 7th U.S. Circuit Court of Appeals in Chicago said Motorola Mobility, a unit of Lenovo Group, could not invoke U.S. antitrust law because its foreign subsidiaries had been the “immediate victims” of a conspiracy to boost prices on liquid crystal display screens.

“Motorola’s foreign subsidiaries were injured in foreign commerce — in dealings with other foreign companies,” Circuit Judge Richard Posner wrote for a three-judge panel. “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.”

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

Motorola Mobility’s case, which began in 2009, drew added attention because of concern that the company was trying to obtain U.S. antitrust protections while shifting its tax burdens to other countries, an accusation it has denied.

“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. “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 Mobility spokesman Will Moss said: “We disagree with the decision, and are considering our options.”

Lenovo bought Motorola Mobility for $2.91 billion in October from Google, which had purchased the company two years earlier.

Motorola Mobility said it paid the LCD makers more than $5 billion during a price-fixing conspiracy that ran from 1996 to 2006.

The 7th Circuit had ruled against Motorola Mobility in March but agreed to a rehearing after the Obama administration said the ruling threatened its ability to police global price-fixing.

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

(Reporting by Jonathan Stempel in New York; Additional reporting by Dan Levine in San Francisco and Lawrence Hurley in Washington, D.C.; Editing by Jeffrey Benkoe and Lisa Von Ahn)

This article originally appeared on Recode.net.