The film daily year book of motion pictures (1941)

The arbitration machinery will be administered by the American Arbitration Association. The decree provides that a panel of not less than ten arbitrators shall be established in each of the thirtytwo exchange centers in the United States. The arbitrators, who are to be selected by the American Arbitration Association, must be persons having no past or present connection with the motion picture industry. Arbitration can be instituted by the payment of a nominal filing fee. Controversies are to be heard by arbitrators from the panel, selected either by agreement of the parties or by the American Arbitration Association. Persons whose business or property may be affected by an award are given the right to intervene as parties and to participate in the proceeding. Provision is made for an appeals board of three members to be appointed by the Court to hear appeals from decisions of the local arbitrators. The board is to have its offices and hold its hearings in the City of New York. The cost of maintaining the arbitration system is to be borne by assessments levied against the defendant companies. This arbitration system will provide a simple, speedy, inexpensive and impartial remedy for the settlement of disputes between distributors and exhibitors. Jurisdiction Reserved for Further Relief The petition filed by the Government in this case ask the court to order the divorcement of production and distribution of pictures from exhibtion. The petition is based on the theory that divorcement of production and distribution from exhibition is necessary to eliminate the unfair competitive practices in the industry and to restore fair competition therein. The purpose of the present decree is to provide a means for the elimination of unfair competitive practices in the industry without resorting to the more drastic remedy of divorcement. The establishment of a sytem of arbitration to implement the slower and more expensive remedy of private suits under the anti-trust laws supplies a long felt need in the motion picture industry. It is to be noted, however, that the decree takes away no existing legal rights of any exhibitor under the anti-trust laws. It provides an additional forum for the settlement of disputes for which no provisions have heretofore been made. Properly administered it should put an end to disputes between distributors and exhibitors which have been a constant source of discord and friction in the past and should result in placing the industry on a fair competitive basis. If these results are not obtained after a reasonable trial period, there will be no alternative for the Government but to proceed with the litigation and press for a revision of the industry structure in accordance with the prayer of the petition. To give the arbitration system a fair trial the Government will not seek divorcement or dissolution for a period of three years. In the interim the defendants have agreed not to engage in any general program of expansion of theater holdings, with certain stated exceptions. Thus the status quo will be maintained during the three-year period to the extent that it is practicable. Parties Consenting The companies consenting to the decree are Paramount Pictures. Inc.. Loew s. Incorporated, RKO Radio Pictures, Inc, Warner Brothers Pictures. Inc., Twentieth Century-Fox Film Corporation and their subsidiary and affiliated companies. All five of these companies are engaged in the exhibition of pictures as well as in production and distribution. Three of the companies that were named in the original complaint, namely. United Artists Corporation, Universal Pictures Company, Inc., and Columbia Pictures Corporation, have not joined in the decree. None of these companies owns any theaters. The case will proceed to trial against the court. To protect the consenting defendants against the competitive advantages that the three nonconsenting companies may enjoy if they are not required to conform their selling practices to the provisions of the decree with respect to trade showing and sales in small groups, the decree provides for the termination of these provisions as against the five consenting companies in the event the Government has not succeeded in procuring a decree requiring the three non-consenting companies to comply with similar provisions by June 1. 1942. All of the other provisions of the decree remain in effect regardless of the outcome of the suit against the three non-consenting companies. Continued Supervision by Department of Justice The Department proposes to keep a constant check on the operation of the decree. The records of the arbitration system are subject to inspection by the Department at all times, as are the records of the defendant relating to the operation of the decree. A unit will be established in the Antitrust Division to keep in touch with the operation of the decree and to handle complaints with respect to it. As a result of the information thereby obtained, the Department will be in position to determine what further action, if any, need be taken at the end of the trial period. D. of J. Statement On The Policing Unit — —— in -~ THE importance attached by the Department of Justice to its special industry policing unit for which provision was made in the New York consent decree is indicated in a formal department statement designotinq Robert L. Wright, special assistant to the Attorney General, to supervise Its work. While previously, spokesmen for the Government had assured that there was nothing unusual in the establishment of such a unit, the formal statement established that it was charged with broad duties, not all of which ware related to the consent decree and its proviiioni. As defined in the statement, the work of the unit will embrace the following activities: I. Enforcement of the Decree As enforcement of the decree in the first instance rests largely in the hands of independent exhibitors, the unit will be available to such exhibitors for advice with respect to the remedies to them under the decree. It cannot, of course, undertake to initi 640