Google Inc. (GOOGL)’s Motorola Mobility unit won a second chance to revive allegations it was the victim of a conspiracy to fix the prices of liquid crystal display panels.
A U.S. Court of Appeals panel in Chicago today said it was vacating its decision upholding the dismissal of most of Motorola Mobility’s antitrust claims against display-makers including Sharp Corp. (6753) and Samsung Electronics Ltd. (005930) and will hear the case again. The court didn’t give a reason.
The mobile-phone maker claimed it was hurt by the defendants’ fixing of prices for displays bought by Motorola affiliates overseas. The appeals court, led by U.S. Circuit Judge Richard A. Posner, in March ruled that the affiliates that made the contested purchases were based outside the U.S. and beyond the reach of American antitrust laws, upholding the trial court’s finding.
“If Motorola’s foreign subsidiaries have been injured by violations of antitrust laws in the countries in which they do business, they have remedies,” Posner said at the time. “If the remedies are inadequate, or if the countries don’t have or don’t enforce antitrust laws, these were the risks that the subsidiaries (and hence Motorola) assumed by deciding to do business in those countries.”
The March decision upheld a January ruling by U.S. District Judge Joan B. Gottschall, who found the contested transactions “overwhelmingly” foreign in nature.
Motorola Mobility’s bid for rehearing was supported in a brief filed by the U.S. Federal Trade Commission and the independent American Antitrust Institute.
The Korea Fair Trade Commission joined the display makers in opposing the rehearing bid, while Taiwan’s Ministry of Economic Affair submitted a letter endorsing the appeals court’s decision.
Before Gottschall, Motorola Mobility claimed the LCD panel makers engaged in a decade-long conspiracy to inflate their prices. Citing defense filings, the judge said more than 99 percent of the display purchases at issue were made by Motorola’s foreign affiliates.
Motorola Inc. filed the lawsuit in 2009, then later spun off its mobile-phone making business as Motorola Mobility and changed its own name to Motorola Solutions Inc. Motorola Mobility, later acquired by Mountain View, California-based Google, is slated to be sold to Beijing-based Lenovo Group Ltd. (992)
The case is Motorola Mobility LLC v. AU Optronics Corp., 14-8003, U.S. Court of Appeals for the Seventh Circuit (Chicago).
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