Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-10-28
Justice Official Denies
Antitrust Action
Against Advertising
Arnold Explains Only
Unreasonable Use of
Power Is Illegal

-
NEW YORK, Oct. 28.-Assistant
Attorney General Thurman Arnold
asserted in a statement made public
yesterday that the Justice Depart
ment had not directed any anti
trust cases against advertising but,
rather, against IAN unreasonable
use of power which has been &C
quired by legitimate method"
In letter to Edwin S. Friendly,
business manager of the New York
Sun and chairman of the Bureau of
Advertising of the American News
paper. Publishers Association, Mr..
Arnold said he wanted to clarity the
departments position in respect to
advertising, about which there has
been much confusion in the press in
editorial comment"
THE only thing that the Antitrust
Division attacks is the unreasonable
and coercive use of organized poW-
er, - Mr. Arnold said.
Sometimes advertising is one of
the weapons by which an organiza-
ton destroys free market. Some
times the weapon is the unreason-
able use of patents, or corporation
merger, or agreements or trade asso-
Citations.
"All of these things are legitimate
in themselves, but they may be
used for illegitimate purposes"
Cites Example.
Mr.. Arnold pointed out that
manufacturers advertising in a way
which should be encouraged be-
cause it creates demand for products
and thus distributes more goods"
often build up such a demand for a
product that retailers would lose
customers If they did not carry
that product.
But after the national demand
has been established, Mr.. Arnold
went on. 1t is possible for manu-
facturer to threaten to withdraw
the popular product from the re-
taller unless the retailer agrees to
carry other products of the manu-
facturer or withdraw from sale
products of the manufacturer COM
petitor.
This the Antitrust Division
calls an unreasonable use of power
which has been acquired by legiti-
mate method" Mr.. Arnold said. ut
is this unreasonable use that is
illegal"
Mr. Arnold said he was making
this explanation because attacks on
the departments attitude followed
complete misconceptions in some
cases of the Governments antitrust
charges last July against eight
major tobacco companies and GER
tain company executives.
Declared Coercion.
There We charge that demand,
built up by advertising, has been
used to coerce competitors, jobbers
and retailers to eliminate competi-
ton and to deprive the consumer
of a free market" Mr.. Arnold said.
There is no attack whatever upon
the principle of legitimate advertis-
ing of cigarettes or any attempt to
stop that kind Of advertising"
If groups seek to fix prices and
control other groups in an industry,
Mr. Arnold continued. their efforts
are easier if they are in positions
powerful enough to give them con-
troll Of the field.
THE charge lin the tobacco case)
is that the defendants Use this
power and dominant position, built
up by several specified means, in
Guiding advertising, to facilitate their
violations of the Sherman Act" Mr..
Arnold said.
THE charge is not that advertis-
ing is violation of the law, and no
fair minded, intelligent persons
reading the charges could possibly
come to the conclusion that it is"