District Court Permits Plaintiffs to Amend Complaint To Allege Sherman Act Damages Arising from Non-U.S. Sales of eBooks

The World in U.S. Courts: Winter 2015 - Antitrust/Sherman Act/Foreign Trade Antitrust Improvements Act (FTAIA) | December.03.2014

Lovoho, LLC v. Apple Inc., U.S. District Court for the Southern District of New York, December 3, 2014

This is follow-on private litigation arising out of the criminal case brought against Apple and various book publishers that alleged price-fixing with respect to the sale of eBooks. The plaintiffs are certain U.S. retailers of eBooks who claim that they went out of business as a result of the reduced margins the alleged conspiracy imposed on retailers. At issue was their request to amend their complaint to allege damages arising from lost eBook sales to customers outside the U.S.

The District Court in New York observed that the viability of the potential damages claim turned on the application of the FTAIA to “export trade,” a term whose application the Court noted was not entirely clear in the context of the sale of eBooks. Among other requirements, the Court stated that the FTAIA permitted Sherman Act claims relating to U.S. “export trade” to proceed only if the alleged conspiracy “had a direct effect on export transactions in which the plaintiffs were engaged,” and that effect gave rise to their claim.” Because such a claim could be brought but had not been included in the complaint, the Court allowed the plaintiffs to amend the complaint to try to allege facts that would support the claim.

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