A Single Call: The Need to Amend the Parent-Subsidiary Relationship under the Ftaia in View of Motorola Mobility
2016; The MIT Press; Volume: 21; Issue: 4 Linguagem: Inglês
ISSN
1532-303X
Autores Tópico(s)ICT Impact and Policies
ResumoINTRODUCTIONBeginning as early as 1998, and continuing through 2006, conspirators secretly agreed fix liquid crystal display (LCD) panel prices.1 LCD panels, unlike other cellular telephone inputs, have no utility apart from their component value.2 3 The result of this price-fixing was highly effective cartel that consistently inflated LCD prices.1 The conspirators accomplished this price-fixing scheme through targeted sales of those inflated LCD panels Motorola Mobility, LLC (Motorola), an American mobile cell phone company that held top share of the United States market and sold more phones in the United States than anywhere else.4 Like many American companies, Motorola developed manufacturing operations in Asia take advantage of lower production costs.5 However, all aspects of Motorola's business began and ended in the United States: they designed the phones, selected the parts, determined the prices, and dictated the terms on which finished products were imported and sold Motorola's customers in the United States.6On the other hand, the conspirators did not sell the LCD panels directly into the United States. First, the conspirators sold the inflated LCD panels Motorola's wholly owned foreign subsidiaries in China and Singapore, where the panels were incorporated into the mobile cell phones.7 The subsidiaries then imported their LCD products into the United States for sale at higher cost.8 Through this avenue, the conspirators' anticompetitive conduct reached United States commerce.9 This price-fixing conspiracy affected well over $23.5 billion worth of LCD panels imported into the United States, and enabled the conspirators impose overcharges of more than $2 billion on those imports.10 But because these antitrust activities took place abroad, all parties seeking bring suit had first bring their case within the confines of the Foreign Trade Antitrust Improvements Act (FTAIA).* 11 The indirect purchasers in the United States, in this case Motorola's parent company, if not confronted with the indirect purchaser doctrine, might have standing if the company was able show that a direct, substantial, and reasonably foreseeable on United States commerce gave rise their claim.12The above facts explain the background of recent Seventh Circuit case: Motorola Mobility v. AU Optronics Corporation,13 The Seventh Circuit's treatment of the parent-subsidiary relationship in Motorola Mobility, as compared other antitrust doctrines, is the focus of this Note. While several antitrust doctrines, such as the intra-enterprise conspiracy doctrine and indirect purchaser doctrine, treat parent and its wholly owned subsidiary as one entity, the Seventh Circuit declined follow similar approach in Motorola Mobility.14 In fact, the Seventh Circuit refused collapse Motorola's70fbcorporation and their foreign subsidiaries into one economic unit, arguing corporate formalities should be respected unless one of the recognized justifications for piercing the veil, or otherwise deeming parent and subsidiary one, is present.15 The inconsistent treatment of the parentsubsidiary relationship under the FTAIA and other antitrust doctrines under the Sherman Act is perplexing; there is no legitimate rationale for the difference.16In Motorola Mobility, the Seventh Circuit decided treat Motorola's parent and subsidiary companies as separate economic units, and dismissed Motorola's Sherman Act claims.17 The court gave three rationales for its decision. First, the court determined that Motorola's antitrust claim failed because Motorola could not satisfy the gives rise to prong of the FTAIA. Is Because Motorola's American parent company was injured abroad when it purchased the price-fixed component, the effect in the United States of the price-fixing was not enough give rise an antitrust claim.14 Second, the court held that Motorola could not satisfy the Illinois Brick doctrine. …
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