Reference > Media law & regulation > US anti-trust delays
The slowness and the damage done
US anti-trust investigations are slow and grind so exceeding small that by the time a verdict is delivered and then enforced, the damage has been done. Here are some examples.
1908 September 9 Motion Picture Patents Company (MPPC, known as The Trust) is formed by leading film companies, notably Edison and Biograph, to protect their patents and copyrights by pooling patents on equipment, to raise the stakes for new entrants to the industry and to reduce foreign imports, especially those from Europe, which have a 70 per cent market share.
1910 April 18 MPPC forms a subsidiary, the General Film Company, which introduces the practices of barring (called zoning in the US) to give particular exhibitors the exclusive rights to the first run of films in specific geographical areas, and of blind booking, requiring exhibitors to take whichever other films are offered in order to acquire the most popular titles. The first-run concept allows a higher rental to be charged for new films.
1912 The Department of Justice begins anti-trust action against the Motion Picture Patents Company. By now the independent producers who are not members of the MPPC are through their resistance wearing down the effectiveness of the Trust.
1915 The activities of the Motion Picture Patents Company and the General Film Company, its distribution subsidiary, are declared illegal under the Sherman anti-trust law and the GFC is dissolved by federal court order.
1917 Motion Picture Patents Company (MPPC) is finally dissolved by federal court order.
Famous Players Lasky Corporation
1921 August 30 US Federal Trade Commission (FTC) accuses Famous Players Lasky Corporation of block bookingrequiring exhibitors to take packages of films, unseen, in order to acquire the major titlesand commences an anti-trust action.
1927 FTC finds Famous Players Lasky guilty.
Delay: six years.
Paramount Consent Decree
1938 Anti-trust suit is initiated against the eight Hollywood majors by the Department of Justice, claiming unfair booking practices.
1940 A consent decree settles the US Justice Department's anti-trust case against the eight Hollywood majors, who agree to limit the number of films in the packages offered to exhibitors.
1944 The issue is re-opened.
1948 In the Paramount consent decree case, the US Supreme Court rules that for producers and distributors also to own cinema chains amounted to price-fixing conspiracies. Distribution companies have to dispose of their exhibition interests. This also had the effect of killing off any idea of the Hollywood majors controlling or buying into television.
1951 To comply with the Supreme Court ruling in the 'Paramount consent decree' case, Paramount Studios hives off its cinema exhibition business, which becomes United Paramount Theaters, which in 1953 buys the ABC television network.
1957 The last cinema divestiture by a studio is completed.
Page created 23 February 2004
© David Fisher