Motorola's price-fixing appeal rejected by US court

Judge Richard Posner said Motorola could not invoke US antitrust law because the "immediate victims" had been non-US subsidiaries that had bought most of the LCD screens that carried inflated prices.

A federal appeals court rejected Motorola Mobility LLC's bid to sue several Asian suppliers under US antitrust law for fixing prices of mobile phone displays sold to its foreign units. 

Wednesday's decision by the 7th US Circuit Court of Appeals in Chicago may lessen protections against inflated prices for US consumers who buy cellphones, computers and other products whose components are made outside the country. 

Circuit Judge Richard Posner said Motorola could not invoke US antitrust law because the "immediate victims" had been non-US subsidiaries that had bought most of the liquid crystal display screens that carried inflated prices. 

While Motorola, a unit of China's Lenovo Group, claimed it paid the defendants more than $5 billion during a conspiracy that ran from 1996 to 2006, only 1% of the components were shipped to the United States. 

"Motorola's foreign subsidiaries were injured in foreign commerce — in dealings with other foreign companies," Posner wrote for a three-judge panel. 

"To give Motorola rights to take the place of its foreign companies and sue on their behalf under US antitrust law would be an unjustified interference with the right of foreign nations to regulate their own economies," he added. 

The defendants include AU Optronics, Chunghwa Picture Tubes, HannStar Display, LG Display, Samsung Electronics, Samsung SDI, Panasonic's Sanyo unit, Sharp and Toshiba. 

Some LCD makers have pleaded guilty to US criminal price-fixing charges. Wednesday's decision limits the scope of Motorola's separate, civil lawsuit, which also alleged violations of state antitrust and consumer protection laws. 

The civil case had also drawn concern from the court that Motorola was trying to obtain US antitrust protections even as it shifted tax burdens to other countries. 

Motorola, which is based in Chicago, denied that accusation, saying it repatriated foreign profits and paid US taxes. 

Unfriended
"The court's opinion basically says that Motorola can't have it both ways," said Robert Wick, a partner at Covington & Burling who represents Samsung Electronics and argued the defendants' case before the 7th Circuit on November 13. "Motorola can't be a foreign company for purposes of manufacturing phones, but a US company when it comes to asserting antitrust claims." 

Motorola spokesman Will Moss said: "We disagree with the decision, and are considering our options." 

Posner said Motorola and its customers were only "indirect" purchasers of the LCD screens, and that Motorola's claims were barred under a 1982 law limiting antitrust claims against non-US companies to conduct directly linked to domestic commerce. 

Of the screens shipped to non-US factories, 42% were used in products sold in the United States and 57% in products sold elsewhere. 

The US Department of Justice and Federal Trade Commission had submitted a brief urging that US antitrust law did cover the price-fixing conspiracy. 

But Posner said the government stopped short of saying Motorola deserved antitrust damages, and merely sought assurance that US efforts to obtain criminal and civil sanctions against foreign companies for antitrust violations would not be impeded. 

"Motorola has lost its best friend," Posner said, referring to the government. 

A Justice Department spokesman said the government is pleased the court recognized the "propriety" of its efforts to protect US consumers from non-US price-fixing cartels. 

Lenovo bought Motorola Mobility for $2.91 billion in October from Google, which had purchased the company two years earlier. 

The case is Motorola Mobility LLC v AU Optronics Corp, et al, 7th US Circuit Court of Appeals, No. 14-8003
.

Google must apply 'right to be forgotten' globally: EU

European privacy regulators want internet search engines such as Google and Microsoft's Bing to scrub results globally, not just in Europe, when people invoke their "right to be forgotten" as ruled by an EU court. 

The European Union's privacy watchdogs agreed on a set of guidelines on Wednesday to help them implement a ruling from Europe's supreme court that gives people the right to ask search engines to remove personal information that is "inadequate, irrelevant or no longer relevant." 

Google, which dominates internet searches in Europe, has been scrubbing results only from the European versions of its website such as Google.de in Germany or Google.fr in France, meaning they still appear on Google.com. 

"From the legal and technical analysis we are doing, they should include the '.com'," said Isabelle Falque-Pierrotin, the head of France's privacy watchdog and the Article 29 Working Party of EU national data protection authorities, at a news conference. 

A spokesman for Google said the company had not yet seen the guidelines but would "study them carefully" when they are published. 

Pierrotin said the guidelines should be published on Thursday or Friday. 

Google previously said that it believed search results should be removed only from its European versions since Google automatically redirects people to the local versions of its search engine. 

The issue of how far to push the "right to be forgotten" has divided experts and privacy regulators, with some arguing that Google's current approach waters down the effectiveness of the ruling, given how easy it is to switch between different national versions. 

Wednesday's decision was another setback for Google, which is facing multiple investigations into its privacy policy and is mired in a four-year EU antitrust inquiry. 

The ruling has pitted privacy advocates against free speech campaigners, who say allowing people to ask search engines to remove information would lead to a whitewashing of the past. 

Pierrotin also said that notifying publishers and media outlets when their stories are delisted from search results would not be mandatory, as Google has previously argued. 

"There is no legal basis for routine transmission from Google or any other search engine to the editors. It may in some cases be necessary, but not as a routine and not as an obligation," she said.

Google's decision to notify press outlets and webmasters via email was criticized by regulators earlier this year for sometimes bringing people's names back into the open
.

Amazon Fire phone gets a price cut again

The price cut, which would last until December 1, is the second for the Fire phone.

Amazon has slashed the price of its Fire smartphone that stalled after launch early this year, becoming a drag on the US online retail titan's bottom line. 

The price cut, which Amazon said would last until December 1, is the second for Fire phone and is included in a set of holiday-shopping season deals announced for items including Kindle e-readers. 

Fire smartphones free of accompanying contracts with telecom carriers are available for $199 and come with a year-long membership to Amazon Prime subscription service which gives customers free shipping and access to music, videos and other online content. 

Fire phone hit the market mid-year at a price of $649 each without contracts, or $200 with multi-year telecom service deals. 

Unlocked Fire phone are compatible with GSM networks provided by US carriers such as AT&T, T-Mobile, Metro PCS and Cricket. 

Seattle-based Amazon in September tried to ignite Fire sales by dropping the unlocked price to $449, and offering handsets for just 99 cents if bought along with a two-year service contract with telecom carrier AT&T. 

While some Amazon products and services have been popular, its smartphone market share has been "effectively zero," according to the Consumer Intelligence Research Partners consultancy. 

Amazon posted widening losses in the recently ended fiscal quarter, raising doubts on whether investors will support chief executive Jeff Bezos's strategy of putting investment ahead of profit. 

Amazon took a charge of $170 million for inventory, mainly for unsold phones. 

Some analysts believe that the US holiday season will test Amazon because traditional brick-and-mortar retailers are responding to the competition with offerings such as free shipping.

BlackBerry paying iPhone users to switch to Passport

 Canadian smartphone maker BlackBerry is wooing Apple customers with a cash offer for trade-ins of iPhones for its new square-screened, keyboard-equipped Passport.

The promotion was announced late Monday and will be available starting next month until February 13, in Canada and the United States.

Customers who trade in their iPhones could receive up to $400 cash back depending on the model and condition of their trade-in, plus a $150 gift card.

This marks the first time that BlackBerry has gone head-to-head with Apple since the Canadian firm launched a turnaround plan last year aimed at stemming massive losses.

The Passport was launched in September.

Named for its approximate size to the travel document, the phone was designed to win back key corporate users after BlackBerry was effectively knocked out of the highly competitive consumer smartphone market dominated by Apple and Samsung.

Investors seemed pleased, pushing up the Waterloo, Ontario-based company's share price slightly in morning trading.

But analysts were more skeptical. Carl Simard of Medici called it a very "desperate move."

In September, BlackBerry reported it narrowed its loss in the latest quarter, and expressed optimism that its major restructuring and new business-friendly devices would help fuel a turnaround.

For the three months ended August 30, BlackBerry posted a loss of $207 million on $916 billion in revenues largely split between sales of services and software and more than two million smartphones.

The Canadian manufacturer pioneered the smartphone market but has struggled to keep up with competitors in recent years.

Last year, the company introduced the BlackBerry 10 operating system and new smartphones in an effort to regain ground lost to rivals such as Apple and others using the Google Android operating system
.

Lava in talks to buy Nokia's Chennai plant: Sources

Fast-growing smartphone maker Lava is said to be in talks to buy Nokia's Chennai handset factory, once the world's biggest but now non-operational. If a deal is struck, that could raise the possibility of thousands of former workers getting a chance at re-employment at the plant that had been regarded as a showpiece of India's manufacturing capabilities. 

The two companies have signed a nondisclosure agreement, people familiar with discussions told ET. "Lava's manufacturing team has already visited the plant and has done the assessment. It will make a proposal to Nokia mid-December after taking all aspects into consideration," one of the people said. "The tax issue needs to be sorted out before a final deal is sealed though." 

He was referring to the tax dispute between Nokia and the government, which had prevented the Finnish company from transferring the factory to Microsoft as part of a global $7.2-billion deal to sell its devices business to the US company. The tax row is in court and the factory is silent after Microsoft decided to stop using it from November 1 as a contract manufacturer for its devices, putting thousands out of work. 

Another person said a top executive of Nokia Finland's M&A team was recently in India to discuss the sale with Lava, which has moved up to the No. 3 spot among smartphone vendors in the July-September quarter from No. 4 in the second quarter, according to IDC. The Noida-based company, headed by co-founder and chairman & managing director Hari Om Rai, was set up in 2009 and sells devices under the Lava and Xolo brand names. 

"Nokia has already communicated to Lava that the ongoing tax and lease-related issues are being discussed with the authorities concerned," said the person cited above. "It has asked Lava to continue with the assessment since there are high chances that these issues would get resolved soon." 

A Nokia spokesperson said in an email: "With production at Chennai suspended, we would like to see the asset freeze imposed by the tax authorities lifted. This will allow us to explore potential opportunities for sale to a suitable buyer." 

Nokia and Lava declined comment on any talks they might be having. 

While there are no valuation estimates available, the Indian tax department had pegged Nokia's fixed assets including the factory and a few sales offices at Rs 586 crore in the Delhi High Court last December. 

"The valuation would have gone down by 10-12% considering depreciation," said the second person quoted above. 

At its peak, the factory was the world's largest mobile phone manufacturing plant with 8,000 permanent employees working three shifts producing more than 15 million phones a month. ET recently reported that Nokia will renew the factory's licence by the end of November so the machines run occasionally and are kept in working condition, allowing the company to sell it off as a functional unit without too much of a cut in valuation. 

A third person said Nokia is also open to leasing out the plant to contract manufacturers. "The plant's machinery can also be used for making other electronic equipment such as tablets or personal computers after some tweaking," he said. 

Nokia had approached Celkon Mobiles for a possible lease arrangement, said executive director Murali Retineni."We've not given it serious thought," said the Celkon executive. 

The person cited above said Celkon may not need the kind of big capacity that the factory offers, given its volumes. 

Buying the plant, however, makes sense for Lava, among the fastest-growing phone makers in India. It aims to start domestic manufacturing next year due to the rapidly increasing cost of labour in China. Lava has already said it plans to spend Rs 500 crore on local manufacturing operations over three years. 

The company was earlier in talks with Chinese original equipment manufacturer (OEM) Vivo for setting up a manufacturing unit, but this fell through. The company is hoping the Nokia deal works out but will otherwise set up its own plant, land for which has already been earmarked, people said. 

"Being one of the fastest-growing handset vendors, Lava has witnessed growth in both their brands — Lava and Xolo," IDC said in its latest market report on India released on Wednesday. 

Lava is set to cross $1 billion (Rs 6,000 crore) revenue by the end of the current financial year, sharply higher than the Rs 2,909 crore it posted last year. It was the first Indian phone vendor to introduce its own user interface or skin, Hive, riding on the Android OS. Convergence Catalyst's founder analyst Jayanth Kolla said this is a "strong product differentiator" for Lava devices in India
.