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Back to The History of American Film: Primary Sources

United States v. Paramount Pictures, Inc. (1947)

The U.S. Supreme Court finds the film industry in violation of federal anti-trust statutes.

We have no doubt that moving pictures, like newspapers and radio, are included in the press whose freedom is guaranteed by the First Amendment....The main contest is over the cream of the exhibition business--that of the first-run theatres.....The question here is not what the public will see or if the public will be permitted to see certain features. It is clear that under the existing system the public will be denied access to none. If the public cannot see the features on the first-run, it may do so on the second, third, fourth, or later run. The central problem presented by these cases is which exhibitors get the highly profitable first-run business....

The controversy over monopoly relates to monopoly in exhibition and more particularly monopoly in the first-run phase of the exhibition business.

The five majors in 1945 had interests in somewhat over 17 percent of the theatres in the United States--3,137 out of 18,076. Those theatres paid 45 percent of the total domestic film rental received by all eight defendants.

In the 92 cities of the country with populations over 100,000 at least 70 per cent of all the first-run theatres are affiliated with one or more of the five majors....In 38 of those cities there are no independent first-run theatres....

The District Court...found that the five majors..."do not and cannot collectively or individually, have a monopoly of exhibition." The District Court also found that where a single defendant owns all of the first-run theatres in a town, there is no sufficient proof that the acquisition was for the purpose of creating a monopoly. It found rather that such consequence resulted from the interests of competitors, their lack of financial ability to build theatres comparable to those of the five majors, or the preference of the public for the best equipped theatres....

The District court...did find an attempt to monopolize in the fixing of prices, the granting of unreasonable clearances, block booking, and other unlawful restraints of trade....

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