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United States v. Griffith Amusement Co. et al. - 334 U.S. 100, 68 S. Ct. 941 (1948)

Rule:

The existence of power to exclude competition when it is desired to do so is itself a violation of § 2 of the Sherman Act, 15 U.S.C.S. § 2, provided it is coupled with the purpose or intent to exercise that power. It is indeed unreasonable, per se, to foreclose competitors from any substantial market. The antitrust laws are as much violated by the prevention of competition as by its destruction. It follows a fortiori that the use of monopoly power, however lawfully acquired, to foreclose competition, to gain a competitive advantage, or to destroy a competitor, is unlawful.

Facts:

The appellees in this case are four affiliated corporations and two individuals who were associated with them as stockholders and officers. The corporations operated moving picture theatres in Oklahoma, Texas, and New Mexico. In April 1939, the United States brought a suit against appellees to prevent and restrain the latter from violating  §§ 1 and 2 of the Sherman Act. 26 Stat. 209, as amended, 50 Stat. 693, 15 U. S. C. §§ 1, 2. During the time the suit is initiated, the corporate appellees had interests in theatres in 85 towns. In 32 of those towns, there were competing theatres; and 53 of the towns were closed towns, i.e., towns in which there were no competing theatres. According to the complaint, certain exclusive privileges were granted to the appellees, which prevented their competitors from obtaining first or second-run films from the distributors, thereby restraining competition. The District Court found no conspiracy between the appellees or between the appellees and the distributors, which violated the Act. United States challenged the decision in the United States Supreme Court.

Issue:

Did appellees commit acts that violate the Sherman Act?

Answer:

Yes.

Conclusion:

The Supreme Court held that appellees, by combining with each other and with film distributors to obtain monopoly rights, formed a conspiracy in violation of the Act. According to the Court, it was not necessary to find an intent to restrain trade or build a monopoly to find an antitrust violation. The Court averred that while large-scale buying was not unlawful per se, it could not be used to monopolize or attempt to monopolize commerce. The extent of the effect on competitors of appellees' monopoly power had to be determined by the district court, which was also responsible for devising an order to undo the past wrongs and prevent further violations, thereby, the Court remanded the case to the trial court.

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