Legal Document

402 U.S. 549 91 Supreme Court Reporter 1692 29 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 170 UNITED STATES, Appellant,v.GREATER BUFFALO PRESS, INC., et al. Number 821. Argued April 19, 1971. Decided June 1, Syllabus The brought this civil antitrust suit charging that the acquisition by Greater Buffalo Press (Buffalo) in 1955 of all stock International Color Printing company (International) violated § 7 Clayton Act; and Buffalo, Hearst Corp., through its unincorporated division King Features Syndicate (King), Newspaper Enterprise Assn. (NEA), others had conspired to restrain sale newspapers printing color comic supplements violation 1 Sherman Act. Before trial a consent decree was entered against Hearst. which does not control ownership features or license them, prints for sells them. only King, controls many popular is licensor. International's owners wanted sell rather than raise capital modernization expansion. paid dividends every year, year profits increased. Only Buffalso were considered as prospective purchasers; no even approached. After acquiring International, controlled about 75% independent supplement business and, it into 10-year contract with supply King's printing. District dismissed complaint after trial. As Act claim, found two distinct lines commerce: (1) their own, (2) syndicates selling copyrighted newspapers. That court also be within 'failing company' execption appeals from dismissal claim. did reach question remedy. Held: 1. line commerce here business, includes sale, 'area effective competition' encompasses King. While there may submarkets broad market, 'submarkets are basis disregard broader has economic significance.' Pp. 552—554. 2. test Act, whether effect an 'may substantially lessen competition,' met Buffalo's business. Pacific KF135 P2 555. 3. erred finding exception, requirements, (a) resources 'so depleted prospect rehabilitation remote faced grave probability failure,' (b) other purchaser, satisfied. 555—556. 4. mere passage time barrier divestiture illegally acquired. 556. 5. case remanded initial responsibility drafting will provide appropriate 556—557. 327 F.Supp. 305, reversed remanded. Daniel M. Friedman, Washington, D.C., appellant. Frank G. Raichle, N.Y., appellees. Mr. Justice DOUGLAS delivered opinion Court. This Act,1 amended, 64 Statutes-at-Large 1125, 15 Code KF62 18. main thrust involves Press, Incorporated (Greater Buffalo), (International). complaint, at secondary level, charged Association, 26 209, It NEA violators certain tying arrangements involving licensing supplements.2 2 Hearst, enjoining entering any agreement limiting competition colorcomic barring arrangement. 3 full 305.3 came under Expediting 32 823, 29. We noted probable jurisdiction, 400 990, 460, 27 437. reverse judgment below. 4 used weekends most Some papers print own supplements; purchase 5 6 only. Most printed companies like sold But individual those comics particular papers. 8 major metropolitan 9 over therefore noted, however, licensor; moreover, 'ready-print' preprinted supplied masthead change. 10 declared not, result substantial lessening industry, constitute 11 basic error Court, our view, significant involved action should divided 'two separate categories: do engaged These commerce—to treat them together one commerce, i.e., would ignore tremendous leverage features.' 12 we read record, component parts One firm both sell; another yet third organization, Standard Oil versus States, 337 293, 299—300 n. 5, 69 1051, 1055—1056, 93 L.Ed. 1371, comprises There market purposes (Brown Shoe 370 294, 325, 82 1502, 1523—1524, 510), but, said Phillipsburg National Bank & Trust Co., 399 350, 360, 90 2035, 2041, 658 13 proceeding premise relevant analyzed effects on between resulting latter. true import include but alliance client, International. three single consisting distribution supplements. same matter whom done they distributed. combination who fastens more tightly hold group side acquisition, become dependent Buffalo. said, long-term following acquisition. Yet almost right principal competitor, summer evidence taken accounts since existing naturally restricted sales price higher charges printing; fuller could exist if source. 14 executive officer proposed, acquire capacity. 'Even cost money diminished profits, wouldn't better eventual loss most, all, readyprint business? 16 'The quarter century been number field now best two, quite helpless. history clearly emphasizes difficulty, fact hopelessness regaining lost position. plenty current substantiate this. 17 'If Koessler (head because what he past few years, attacked, my lose, danger, N Dec. Immigration Nationality Decisions suppose, becoming accessory. Here reason why think plants restore competitive aspect certainly discouraged Washington.' 18 Prior put pressure construct southern plant meet proposed expansion there. induced cut actually transferred contracts prices. 19 Those practices ceased acquired printing, leaving reliable alternative supply. competitors such. threat newspaper customers course factor situation. But, according requires exacting mechanical techniques performed specially trained personnel, printers specializing handling high volume can produce quality product economically 20 competition.' concentration points firmly conclusion difficulties new entrants real greatly 21 disagree exception 22 requirements satisfied: so failure * *,' Federal Trade Comm'n, 280 291, 302, 50 89, 93, 74 431, purchaser it. Citizen Publishing 394 131, 138, 89 927, 931—932, 148. 23 wished needed expansion, sole customer, threatening place some elsewhere. threatened invoke, nor invoked, six-month cancellation provision contract. Its plans being actively pursued continued pay owners. Indeed shown increase profits. 24 Moreover, numerous smaller never 25 Since 7, remedy though violation, warrant 'a court's exercising discretion order fifteen years occurrence alleged illegal conduct.' law; per se Du Pont, 353 586, 590, 77 872, 875—876, 1057; 366 316, 81 1243, 318. Divestiture performs several functions, foremost liquidation power. Schine Chain Theatres 334 110, 127—129, 68 947, 956—958, 92 1245. divestiture. majority view nature fashioned initially In connection additional questions need passed First said: 'King continue engage practice combining until shall determine issue provided obey laws during pendency action.' 28 have enough information operation related facts know how integrated decree. Second. fifties erected Lufkin, Texas, improve area saving transportation costs. 1950 made moral commitment build Deep South. A constructed Sylacauga, Alabama, 30 cross-currents record suggest Sylacauga wishes, primary motive eliminate planned South threat. 31 status controlling precedents. See, e.g., Aluminum America, 247 308, aff'd 382 12, 86 24, cause making such findings respects necessary 33 Reversed Section provides part: 'That corporation acquire, directly indirectly, whole part share subject jurisdiction Commission assets where section country, competition, tend create monopoly.' monopolization charge eliminated amended complaint. appeal NEA.

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