Tags: Constitutional Law, Enforcement
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The case of United States v. Griffith et al. involved a lawsuit against corporations and individuals who operated movie theaters in Oklahoma, Texas, and New Mexico. The complaint alleged that they violated the Sherman Act by using exclusive privileges granted to them in agreements with film distributors to unreasonably restrain competition and prevent competitors from obtaining enough films to operate successfully. The District Court dismissed the complaint, but the case is now on appeal. The court found that the agreements were not in restraint of trade, and the appellees did not monopolize or attempt to monopolize the licensing or supply of films. However, intent to restrain trade or build a monopoly is not always necessary to prove a violation of anti-trust laws. The necessary and direct result of a defendant's conduct or business arrangements is sufficient. Having a monopoly in the popular sense is not necessarily a violation of the Sherman Act, but acquiring or maintaining a strategic position, expanding a monopoly, or using restraints of trade that violate Section 1 can be. The use of monopoly power, even if lawfully acquired, to foreclose competition, gain a competitive advantage, or destroy a competitor is unlawful.
The use of monopoly power to acquire exclusive film rights in competitive situations is a misuse of power under the Sherman Act. The District Court erred in assuming that the use of circuit buying power was wholly lawful and treating the master agreements as legitimate competition. The case is remanded to the District Court for further determination.
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