Independent Exhibitors Film Bulletin (1954)

Scha^ppel Vaicos Hape far Arbiiraiian (Continued from Page 16) opportunity fcr conduct resulting in express or implied agreements between distributors and exhibitors relating to admission prices and the time when a distributor will license other runs is obviously increased. Moreover it also accentuates them because the very fact that a large number of pictures are being pre released, which play at only advanced admission prices and which are licensed for other runs only after a period of time substantially in excess of when they would normally play on such runs, tends to establish a pattern of doing business on the part of the distributors which of itself furnishes some basis for inferring a purpose to enter into agreements with exhibitors to fix admission prices and to grant improper clearances. You have asked whether the Division considers it advisable to petition for amendments of the consent judgments. The courts have been reluctant to amend judgments entered in antitrust suits without a very strong showing of a change of circumstances or that the amendments are necessary to effectuate their basic purposes. We are doubtful that on the basis of the operation of the judgments so far such a showing could be made. With reference to your inquiry concerning the number of complaints received from exhibitors since July 1953, the number is approximately seventeen. A number of these complaints were found, upon review, to relate to matters to which the judgments could not be regarded as applicable, and which properly should be left for determination by negotiation between the parties concerned. Due to the many difTerent phases of our work which are not capable of exact comparison, we are unable to estimate in any realistic manner what percentage of the Division's work load such complaints constitutued. You have asked about the number of personnel currently assigned to motion picture matters. In addition to the judgments entered in the Paramount case, judgments have been entered in the cases entitled United States v. Schine Chain Theatres, Inc., United States v. Crescent Amusement Co., Inc., and United States v. Griffith Amusement Co. These cases concerned violations of the antitrust laws on the part of a number of large theatre circuits. In addition, there are three cases presently in the litigation stage involving motion picture matters. One of these, United States v. Alliance Theatre Corporation, et al., relates to allegedly illegal restraints of trade and monopolization with respect to motion picture exhibition in Terre Haute, Indiana; another, United States v. National Screen Service Corporation, et al., relates to alleged monopolization and attempted monopolization of the manufacture and distribution of trailers, which are motion picture films of short duration advertising forthcoming exhibition of full length feature films at motion picture theatres, and of socalled film accessories (posters, signs, still pictures, colored sheets and other advertising matters) used by exhibitors to advertise tiieir current feature films and the feature films to be shown in their theatres in the future; and the third. United States v. Twentieth Century-Fox Film Corporation, et al., relates to an alleged conspiracy to prevent 16 mm feature films from being exhibited in competition with established motion picture theatres. Five attorneys are currently spending all or substantially all of their time, another attorney is currently spending about seventyfive percent of his time, still another attorney is currently spending at least half of his time, and three attorneys are spending varying portions of their time on the abovedescribed motion picture matters. One attorney has been and continues to spend substantially his full time on matters relating to the judgments entered in the Paramount case. The Division, of course, does not have an unlimited staff which is available for assignment to motion picture matters, especially in view of the Division's over-all responsibility to enforce the antitrust laws generally throughout the economy. On the basis of the personnel we now have we believe at least a fair share of such personnel have been assigned to motion picture matters. You have asked whether the Division now contemplates using Section 6(c) of the Federal Trade Commission Act in order to enforce compliance with the consent judgments. We are not presently contemplating proceedings under Section 6(c) and I shall endeavor to explain our reasons for this. The first of the jujdgments in the Paramount case was entered on November 8, 1948, and the last of such judgments was entered on February 6, 1952. The Antitrust Division has now had considerable experience in enforcing such judgments. In addition, during the last fifteen years the Division has acquired a very considerable background of factual data, information and experience with respect to the types of problems arising in the motion picture industry, as well as with respect to the background of many of the situations with respect to which judt;ment problems arise. Also, personnel in the Division have had a great mans dealings with exhibitors, distributors and the court which has jurisdiction of the Paramount case. This has enabled the Division to handle judgment problems with an expedition and efficiency which the personnel of an agency lacking that background could only duplicate with difficulty and over a very considerable length of time. In addition, the Division is enforcing the three judgments entered against large exhibitor circuits which we have already referred to. It attempts to correlate problems of enforcement arising under those judgments with the Paramount judgments and endeavors to keep all these judgments in mind when confronted with policy or interpretation problems under any of them. Moreover, questions under these judgments must at times be evaulated in the context of policy situations involved in enforcing or negotiating judgments in other fields. The Federal Trade Commission pointed out to your Committee that it now has some 4200 cease and desist orders to enforce ani it indicated that funds available to it for en j forcement activities are, just as in the cascj of the Antitrust Division, limited. If the Federal Trade Commission were requested to make investigations and recommendations concerning judgment problems arising under the judgments entered in the Paramount case, this of course would add to the personnel problems of that agency. You have asked whether the Division has reviewed the transcript of the motion picture hearings. The Division carefully followed such hearings. The transcript of the testimony of all witnesses was read and we also endeavored to examine the exhibits as they were submitted. Some of the witnesses made allegations which, if supported, would tend to indicatev iolations of the judgments. On the other hand, testimony offered in refutation, if supported, would tend to indicate that such violations of the judgments had not occurred. A great deal of the testimony, though relating to distributor-exhibitor relations and the conduct of distributors in relatend to indicate violations of the judgments, did not indicate conduct violative of the judgments; and a great deal of the testimony related to matters which cannot properly be considered judgment problems. Sincerely yours, STANLEY N. BARNES Assistant Attorney General * * * Statement by Senator Schoeppel, released January 13: Senator Andrew F. Schoeppel (R. Kansas), Chairman of the Monopoly Subcommittee of the Senate Committee on Small Business, today made the following statement : "1 am today releasing a copy of a letter from Judge Stanley Barnes, Assistant Attorney General in charge of the Antitrust Division. Judge Barnes' letter is in reply to a letter of November 2, 1953 from me in my capacity as Chairman of the Monopoly Subcommittee, in which our group asked a series of questions which evolved out of our Committee hearings on trade practices in tlic motion picture industry held last year. Our questions, in the main, dealt with matters relating to certain trade practices in the motion picture industry, whether such practices are lawful, and the enforcement of certain judgments in the motion picture industry. "The reply from the .Antitrust Division speaks for itself. It has been the subject of extensive study by the members of the Committee, the staff of the Small Business Committee and myself. "In filing its final report last year, the Committee emphasized that it is clear that most of the problems between distributors and exhibitors in the motion picture industry are intra-industry problems in which the h'ederal Government should not be directly involved. 1 understand that serious attention is again being given to working out arbitration methods and, personally, I hope they are not long delayed." Pd9« 20 FILM BULLETIN January 2S, 1954