Why the Motorola Mobility Decision Was Good for Cartel Enforcement and Deterrence

Abstract

In Motorola Mobility, the Seventh Circuit ruled that the US parent (Motorola Mobility) could not seek damages in US court for purchases made overseas by its foreign subsidiaries. I agree with the decision in Motorola Mobility and I also believe that the decision was a fair interpretation that reached the optimal outcome for strengthening international cartel enforcement.

The initial Seventh Circuit holding, that the conduct in question did not “have a direct, substantial and reasonably foreseeable effect” on U.S. commerce, could have seriously jeopardized the enforcement efforts of the Department of Justice’s Antitrust Division (“Division”). The Court could have reached a decision allowing Motorola Mobility to seek damages in U.S. courts for purchases made overseas by a foreign subsidiary, but that could have created resentment of the United States as the world’s only cartel cop that mattered. (See Section II.) The decision to hold only that Motorola Mobility’s claim did not meet the FTAIA’s “gives rise to” requirement was a wise compromise from a policy perspective. This paper explains why I think so.

Keywords: FTAIA, Motorola Mobility, comity