Investigation of concentration of economic power; monograph no. 1[-43] (1940)

74 CONCENTRATION OF ECONOMIC POWER Permit circuit theaters to modify contract terms with respect to film rentals, transfer of pictures from one theater to another, cancelation of some pictures to permit extended run on more successful features, and the like, without extending similar privileges to independent exhibitors. The following additional charges were made against the five pro- ducer-distributor-exhibitor companies: Conditioning licensing of films distributed by one in the theaters of the other on the licensing of films of the other in the theaters of the former. Excluding independent productions from affiliated theaters. Excluding independent exhibitors from operating first-run theaters where affiliated theaters are located. Excluding independent exhibitors from the same subsequent-run as affiliated theaters in cities where both are located. Using affiliated theaters to control film supph', run, clearance, and admission prices. Coercing and intimidating independent exhibitors into licensing films on arbitrary terms by threatening to build or acquire competing theater. Coercing and intimidating independent exhibitors into relinquishing part or whole interest in a theater to one of the affiliated companies by threatening to build or acquire competing theaters. Eliminating competition by jointly operating theaters. Dividing available films between two or more affiliated theaters in the same competitive area, thus eliminating competition. Refraining from competition with each other in the exhibition field. To end these conditions, the Department of Justice asked of the court: * * * That each of the contracts, combinations, and conspiracies in restraint of interstate trade and commerce, together with the attempts to monopolize and the monopolization of the same, hereinbefore described, be declared illegal and violative of the Sherman Act. * * * That the defendants herein, their subsidiaries * * * be per- petually enjoined and restrained from continuing to carry out, directly or in- directly, expressly or impliedly, the attempts at monopolization, the monopolies and all restraints of said interstate trade and commerce in the production, distribu- tion, and exhibition of motion pictures described herein, and from enteri?ig into and carrying out, directly or indirectly, expressly or impliedly, any monopolies or restraints of interstate trade and commerce similar to those alleged herein to be illegal. * * * That a nation-wide system of impartial arbitration tribunals or such other means of enforcement as the court may deem proper be established pursuant to the final decree of this court in order to secure adequate enforcement of whatever general and nation-wide prohibitions of illegal practices may be contained therein. * * * That the integration of the production and exhibition branches of the industry by the producer-exhibitor defendants herein, and each of them, be declared to be unlawful as an instrumentality of monopoly and restraint upon interstate trade and commerce, and violative of the Sherman Anti-Trust Act. * * * That the defendants Paramount Pictures, Inc., Twentieth Century- Fox Film Corporation, Warner Bros. Pictures, Inc., Loew's, Inc., and Radio- Keith-Orpheum Corporation, and each of them, under the direction and super- vision of the court be ordered and directed to divest themselves of all interest and ownership, both direct and indirect, either in theaters and theater holdings or in production and distribution facilities and that they, and each of them * * * be permanently enjoined from acquiring, directly or indirectly, any other interests in the branch of the industry divested or in any persons, firms, or corporations which are engaged or may engage in that branch of the industry; said divestiture to be accomplished and carried out upon such terms and conditions as the court may deem proper. * * * That the defendants Paramount Pictures, Inc., Twentieth Century- Fox Film Corporation, National Theatre Corporation, Warner Bros. Pictures, Inc., Warner Bros. Circuit Management Corporation, Loew's, Inc., Radio-Keith- Orpheum Corporation, Keith-Albee-Orpheum Corporation, R. K. O. Proctor Corporation, and R-K-O Midwest Corporation and each of them * * * be ordered and directed to divest themselves of all inteiests and ownership, both direct and indirect, in any theaters which the court shall find have been u.sed by one or more of them to unreasonabv restrain trade and commerce in motion