Standing in the Way of the FTAIA: Exceptional Applications of Illinois Brick

In 1982, Congress enacted the Foreign Antitrust Trade Improvements Act (FTAIA) to resolve uncertainties about the international reach and effect of U.S. antitrust laws. Unfortunately, the FTAIA has provided more questions than answers. It has been ten years since the Supreme Court most recently interpreted the FTAIA, and crucial questions and circuit splits abound. One of these questions is how to understand the convergence of the direct purchaser rule (frequently referred to as the Illinois Brick doctrine) and the FTAIA. Under the direct purchaser rule, only those who purchase directly from antitrust violators are typically permitted to sue under section 4 of the Clayton Act for treble damages. There are several court-created exceptions to this rule that allow indirect purchasers to sue under section 4. This Note addresses the open question of whether courts should apply these exceptions in the FTAIA context. The Seventh Circuit recently discussed this question in Motorola Mobility LLC v. AU Optronics Corp., implying that courts should not recognize Illinois Brick’s exceptions in the FTAIA context. This Note argues for a different interpretation of the case—one that supports the effective deterrence of antitrust violations while vindicating the need to compensate American consumers who are foreseeably, substantially, and directly damaged by foreign anticompetitive conduct. Based on an analysis of the purpose of the Illinois Brick doctrine and the text of the FTAIA, this Note concludes that when an exception to Illinois Brick would permit indirect purchasers to sue in the domestic context, U.S. courts should also allow indirect purchasers to sue under the FTAIA