On 10 October 2014, the Belgian Competition Authority ("BCA") submitted to the US Court of Appeals for the Seventh Circuit its views as amicus curiae opposing the extraterritorial enforcement of US antitrust law in the LCD (liquid - crystal display) Panel cartel case.
The issue arose in the context of a damages claim lodged by Motorola Mobility ("Motorola") against companies Motorola accused of having fixed the price of LCD panels used in its mobile phones. Importantly, only 1% of the LCD panels concerned were bought and delivered to Motorola in the US; another 42% of the panels were bought by Motorola's non-US subsidiaries, assembled outside of the US and shipped to Motorola for resale in the US. The remaining 57% presented no link whatsoever with the US.
The US District Court for the Northern District of Illinois, Eastern Division, considered that Motorola's claim regarding all but the 1% of the LCD panels delivered in the US was barred by the Foreign Trade Antitrust Improvements Act ("FTAIA"), which provides that US antitrust law does not apply to conduct involving trade or commerce with foreign nations unless: (i) such conduct has a "direct, substantial, and reasonably foreseeable effect" on US domestic or import commerce; and (ii) this effect "gives rise to a claim" under US antitrust law. The Court of Appeals for the Seventh Circuit initially upheld the District Court's ruling, finding that there was no direct effect of the conduct on US commerce. However, on 1 July 2014, the Court decided, at the request of the United States and of the US Federal Trade Commission, to rehear the appeal.
The BCA based its intervention in this appeal procedure on its interest in "ensuring that U.S. antitrust laws and the availability of civil damage actions in U.S. courts do not interfere with Belgian and EU enforcement efforts". Relying heavily on F. Hoffman‐La Roche Ltd. v. Empagran S.A., a case dating back to 2004 in which the former Belgian Competition Council also filed an amicus curiae brief, the BCA's views are essentially two-fold.
First, the BCA considered that principles of comity should limit the scope of US antitrust laws, failing which "conflicting policies may well become a significant obstacle to trade and investment". The BCA noted that "the manufacture and sale of LCDs to Belgian purchasers appropriately calls for the application of Belgian antitrust laws under Belgian competition laws and the FTAIA". The BCA stressed that Belgium also had to acknowledge the jurisdictional limits of its antitrust laws: the BCA referred to the annulment by the Brussels Court of Appeals of the fine it had imposed on a flour mill, Brabomills, as the turnover the BCA had taken into account for the calculation of the fine might have included sales outside of Belgium, which created a risk of double jeopardy.
In addition, the BCA highlighted that an expansive enforcement of US antitrust laws would undermine Belgium's and other nations' enforcement of competition laws. Specifically, the BCA claimed that the proper functioning of its leniency programme requires that "the foreign firms seeking leniency can make an adequate assessment of the potential consequences of alleged infringements, which requires in turn that they may rely on principles of causality and jurisdiction developed in the spirit of comity". The BCA concluded that "[i]f seeking leniency and acknowledging infringement were to expose the foreign firm to the consequence of civil suits in the U.S. courts, such infringers would have little incentive to enter into amnesty programs".
Therefore, the BCA submitted that the District Court's order should be affirmed. The jurisdictional restraint advocated by the BCA in the US LCD Panel cartel case is in stark contrast with the position taken by the General Court in the 27 February 2014 Innolux judgment, which upheld the Commission's decision to calculate the fine on the basis of the value of LCD panels incorporated in China and Taiwan into downstream products sold in the EU (see VBB on Competition Law, Volume 2014, No. 2, available at www.vbb.com). That judgment is currently under appeal before the Court of Justice.
