pdf

O’Melveny Lawyers Author Law360 Article on 7th Circuit FTAIA Ruling's Effect on Antitrust Claims

April 01, 2014 O’Melveny & Myers partners Ian Simmons and Bo Pearl, counsel Kevin Feder, and associate Qais Ghafary co-authored an article for the March 31, 2014, edition of Law360 titled, “7th Circ. FTAIA Ruling Profoundly Limits Antitrust Claims.”  The piece discusses a recent Seventh Circuit ruling that will narrow the reach of US antitrust laws and render the Sherman Act inapplicable to foreign anti-competitive conduct by establishing that price-fixed products and price-fixed components purchased overseas cannot support a Sherman Act claim.  An exception to this ruling is the domestic effects test, which “allows U.S. antitrust scrutiny of foreign conduct that has a ‘direct, substantial, and reasonably foreseeable effect’ on domestic commerce.”  The article draws an example for the “direct” effect from a price-fixing case involving Motorola in which the Seventh Circuit ruled that the effect of the component price fixing by foreign manufacturers on the price of the product was indirect.  The authors explain, “the decision narrowly construes the domestic effects test where foreign conduct ‘filters through many layers’ before causing ripples in the United States.  As a result, plaintiffs will have greater difficulty navigation around the FTAIA bar when filing lawsuits.”

Simmons is a member of O’Melveny’s Antitrust and Competition Practice, and resides in the Firm’s Washington, DC office.  Pearl is a member of O’Melveny’s Business Trial and Litigation and Antitrust and Competition Practices, and resides in the Firm’s Century City office.  Feder is also a member of O’Melveny’s Business Trial and Litigation Practice, and resides in the Firm’s Washington, DC office.  Ghafary is a member of the Antitrust and Competition Practice, and also resides in the Firm’s Washington, DC office.