The Motorola Mobility LLC lawyer, Thomas Goldstein was pushing his case of imposing a US price fixing lawsuit against the overseas suppliers, but he found himself in an awkward position when the former had to defend the tax structure of his client itself.
The US Circuit Judge, Richard A Posner questioned the approach of Motorola in seeking the US antitrust protection while transferring its tax burden to the other countries that have relaxed tax rules. It is important to note that Motorola had accused Samsung and other phone makers of fixing prices on mobile phones that are sold to their foreign units.
Posner’s question has arisen amidst a big political argument concerning tax inversions according to which the US companies try to outsource their work and also shift their headquarters abroad. For instance, a US based burger chain, Burger King is looking to acquire another company that will predominantly make it a Canadian company. The other companies in the US are also following the same approach in order to evade heavy taxes.
Motorola has been seeking the reversal of a court ruling that was given back in January. According to the ruling, many of the claims of Motorola are not applicable due to a law made in 1982 that reads that the overseas reach of the anti-trust suits is limited to a great extent, especially when there is a direct link to the domestic commerce.
Goldstein, who is fighting the case for Motorola argued with the Judge that antitrust law is nowhere connected with the tax structure of the companies. According to him, Samsung and Sharp had worked together with Motorola and they all shared the pricing data. He added, “If we had known we were paying a cartel price, we would have refused”.
We will have to wait and see which direction the case leads in the upcoming hearings.