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Belgium, Japan to 7th Circuit: Don’t interfere with our antitrust enforcement!

Our regular readers know that we have been carefully following the developments in Motorola Mobility LLC v. AU Optronics Corp., currently pending in the Seventh Circuit. (Read our September 4September 11, and October 9 posts.) The case addresses the reach of the Foreign Trade Antitrust Improvements Act (“FTAIA”), and will join recent decisions issued by the Second Circuit and Ninth Circuit earlier this year. (Read our prior coverage of the Ninth Circuit’s decision here.)

This week, Belgium and Japan have sought leave to file amicus briefs in the appeal. These briefs join statements by the Korea Fair Trade Commission and Ministry of Economic Affairs for Taiwan filed in May 2014.

The Belgian Competition Authority notes that the “enforcement of Belgian competition law is impacted by other governments’ extraterritorial application of their laws” and that it thus “has a substantial interest in ensuring that companies acting within Belgium and the EU comply with Belgian and EU competition laws, and ensuring that U.S. antitrust laws . . . do not interfere with Belgian and EU enforcement efforts.” Belgium argues that the FTAIA should be interpreted to avoid unreasonable interference with the sovereign authority of other nations, and points to two potential interactions between Belgian and U.S. law:

● Belgium has adopted a leniency program as part of its enforcement regime that is affected by extraterritorial application of U.S. antitrust laws. If U.S. antitrust law is applied extraterritorially it may undercut Belgium’s enforcement efforts: if seeking leniency and acknowledging wrongdoing in Belgium expose the company to civil suits in the U.S., there is little incentive to apply for leniency in Belgium.

● Belgium encourages settlements by offering a 10 percent reduction in the antitrust fine for companies that settle early. If companies that settle early in Belgium are later exposed to U.S. antitrust penalties, that may discourage early settlement.

The Ministry of Economy, Trade and Industry of Japan also opposes the assertion of extraterritorial jurisdiction that would interfere with its sovereign authority. Japan argues that “in civil lawsuits based on injuries alleged to have been incurred as a result of foreign anti-competitive activities, plaintiffs often tend to insist on the remarkably enlarged scope of extraterritorial application.” In particular, Japan notes that its laws do not provide for treble damages awards in antitrust claims. Japan is thus concerned that the applicability of treble damages will be expanded through extraterritorial application of U.S. competition law, interfering with Japan’s ability to regulate its own markets.

In a March 27, 2014 decision, the Seventh Circuit expressed concern that an “expansive interpretation” of the FTAIA could “creat[e] friction with many foreign countries[.]” Although that decision has since been vacated, it remains likely that the Seventh Circuit will consider the views expressed by foreign jurisdictions.