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Abstract

This Note seeks to establish that the Seventh Circuit should have held in Motorola Mobility that the FTAIA’s “direct . . . effect” requirement is satisfied when a foreign subsidiary suffers a harm due to anticompetitive activity abroad and there exists a reasonably proximate causal nexus between that harm and the domestic effect in the United States. Furthermore, the “gives rise to” requirement of the FTAIA sufficiently accounts for concerns of international comity and, under the facts of this case, causes Motorola’s claim to fail. Part I explores the history of the Sherman Antitrust Act and its international application before and after the FTAIA, beginning with American Banana Co. v. United Fruit Co. and extending through Hartford Fire Ins. Co. v. California. Part II describes the statutory language of the FTAIA. Part III discusses the consensus of the circuits that, after Arbaugh v. Y & H Corp., the FTAIA goes to the merits of a plaintiff’s claim. Section IV.A will discuss the recent circuit agreement regarding the second prong of the FTAIA—when an injury “gives rise to” a claim under the Sherman Act. Section IV.B will analyze the two competing tests for determining whether the “direct . . . effect” requirement—the first prong of the FTAIA—has been satisfied and will argue that the “reasonably proximate causal nexus” test is the appropriate standard. Part V will apply this standard to the facts in Motorola Mobility and will ultimately conclude that the “direct effects” requirement was satisfied but that the domestic effect failed to “give rise to” a Sherman Act claim, with the conclusion that the Seventh Circuit should have administered its holding in accordance with this reasoning.

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