United States v. Loews Inc.

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United States v. Loews Inc.

Introduction

The concept of antitrust refers to the set of public policies and laws that are aimed at prohibiting monopolization i.e. charging higher prices than market. It includes all endeavors to monopolization. However, any act of monopoly due to patent rights, copyrights rules and other governmental regulations are not considered as part of antitrust. In addition, any unjust and misleading trade practices also lie under regulations of antitrust that have a significant impact on competition in the market. The main purpose of antitrust laws and regulations is to encourage unbiased, stationary and active economic efficiency. There are two main agencies in USA that deal with the issues and regulations of antitrust and these are Department of Justice: Antitrust division and Federal Trade commission.

The antitrust related law and regulations are enforced by Private antitrust lawsuits system that is conducted via US District Courts. These lawsuit jurisdictions have played a major role in the implementation and enforcement of antitrust during last fifty years. As per statistics, more than 85% of cases are found to be private as per year basis. These cases include practices like restricted dealing, tying, extinction of dealer, and favoritism of price. More than 90% of cases are dropped by plaintiffs on voluntary basis. The most expensive and time consuming cases in this regard are found to be government based cases. Two third of cases are subject to the issue of horizontal pricing and the second most common issue faced in this regard are monopolization. Usually most of the cases end with approval verdict (An FTC Guide, n,d.).

There are two rules of antitrust cases, which are per se rule and rule of reason. The initial rule is applicable in the case of harmful implications of a business practice and the other rule is applied when the per se rule cannot be applied. The main purpose of this paper is to examine and analyze the case of US v. Loews Inc. in 1962.

Discussion

Summary of Facts of Antitrust Case U.S. v. Loews Inc

The case of US v. Loews Inc, an antitrust case that shed light on the block booking of movies and US Supreme Court claimed that shared assortment of movies violated Sherman Antitrust Act. In addition to it, the court highlighted economic related impact of these practices that involved product collection resulting in the price discrimination.

US lodged case against six major distributors in 1957 under section 4. These distributors released pre 1948 motion pictures films for exhibiting on television. Every defendant was claimed for conduct of block booking that violated Sherman Act as per Section 1. The government decided to prohibit every distributor to sell films to television stations individually in an effort to restore market competition. The district court also restricted all distributors to enter into a contract or agreement that affects the price of films or result into illegal block booking (Rubley, C., 1963).

The film distributors challenged the claim of illegality. The Supreme Court considered the appeal ...