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US: Appeal court decision could cripple anti-cartel enforcement

 |  May 19, 2014

The US Department of Justice, Federal Trade Commission and the American Antitrust Institute are speaking out against a recent US Court of Appeal decision that antitrust insiders say could undercut regulators’ ability to curb cartel abuse.

The US Court of Appeals in Chicago ruled last March that US antitrust law cannot crack down on foreign price-fixing cartels that have merely an “indirect effect” on US commerce. The decision stems from a dispute introduced by Motorola Mobility over whether multinational LCD screen price-fixing collusion harmed Motorola in the US, or just its foreign units.

The court ruled the collusion harmed only those foreign subsidiaries. Further, it decided, Motorola assumed its own risk by doing businesses where no competition policy is enforced.

The appellate judges found that exerting US antitrust law on those jurisdictions would harm foreign relations and negatively affect those nations from being able to independently regulate commerce.

But the DOJ and AAI say that ruling has serious, negative implications for the ability of authorities to fight cartel abuse. The appellate court decision “could be crippling,” according to AAI general counsel Richard Brunell. “it would severely undercut anti-cartel enforcement,” he said.

Following that March ruling, the DOJ and FTC quickly asked the appeals court to reverse its own decision. In a filing last month the regulators said the ruling is “likely to constrain the government’s ability to effectively prosecute cartels that substantially and intentionally harm US commerce and consumers.”

Now, the AAI and DOJ have asked for a rehearing before the appeals court panel, reports say. The appeals court has also asked for the US Commerce and State departments to comment on the matter.

Full content: Bloomberg

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