United States v. Paramount Pictures, Inc.
| United States v. Paramount Pictures, Inc. | |
|---|---|
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| Argued February 9–11, 1948 Decided May 3, 1948 |
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| Full case name | United States v. Paramount Pictures, Inc. et al. |
| Citations | 334 U.S. 131 (more)
68 S. Ct. 915; 92 L. Ed. 1260; 1948 U.S. LEXIS 2850; 77 U.S.P.Q. (BNA) 243; 1948 Trade Cas. (CCH) P62,244
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| Prior history | Injunction granted, U.S. District Court (66 F.Supp. 323) |
| Holding | |
| Practice of block booking and ownership of theater chains by film studios constituted anti-competitive and monopolistic trade practices. | |
| Court membership | |
| Case opinions | |
| Majority | Douglas |
| Concur/dissent | Frankfurter |
| Jackson took no part in the consideration or decision of the case. | |
| Laws applied | |
| Sherman Antitrust Act; 15 U.S.C. § 1, 2 | |
United States v. Paramount Pictures, Inc., 334 US 131 (1948) (also known as the Hollywood Antitrust Case of 1948, the Paramount Case, the Paramount Decision or the Paramount Decree) was a landmark United States Supreme Court antitrust case that decided the fate of movie studios owning their own theatres and holding exclusivity rights on which theatres would show their films. It would also change the way Hollywood movies were produced, distributed, and exhibited. The Court held in this case that the existing distribution scheme was in violation of the antitrust laws of the United States, which prohibit certain exclusive dealing arrangements.
The case is important both in U.S. antitrust law and film history. In the former, it remains a landmark decision in vertical integration cases; in the latter, it is seen as the first nail in the coffin of the old Hollywood studio system.
The legal issues originated in the silent era, when the Federal Trade Commission began investigating film companies for potential violations under the Sherman Antitrust Act of 1890.
The major film studios owned the theaters where their motion pictures were shown, either in partnerships or outright and complete. Thus specific theater chains showed only the films produced by the studio that owned them. The studios created the films, had the writers, directors, producers and actors on staff ("under contract" as it was called), owned the film processing and laboratories, created the prints and distributed them through the theaters that they owned: In other words, the studios were vertically integrated, creating a de facto oligopoly. By 1945, the studios owned either partially or outright 17% of the theaters in the country, accounting for 45% of the film-rental revenue.
Ultimately, this issue of the studios' allegedly illegal trade practices led to all the major movie studios being sued in 1938 by the U.S. Department of Justice. As the largest studio, Paramount was the primary defendant, but all of the other Big Five (Loew's (MGM), Warner Bros., 20th Century Fox, RKO Pictures) and Little Three (Universal Studios, Columbia Pictures, United Artists) were named, as well as numerous subsidiaries and executives from each company. Separate cases were also filed against large independent chains, including the 148-theater Schine.
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