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Antitrust Keyed to Gavil, 5th Ed.
Interstate Circuit, Inc. v. United States
Citation:
306 U.S. 208, 59 S. Ct. 467, 83 L.Ed. 610 (1939)Facts
Interstate Circuit and Texas Consolidated Theatres dominated the motion picture exhibition business in their respective territories in Texas, controlling first-run theaters in major cities. In July 1934, Interstate’s manager sent identical letters to the eight major film distributors, demanding that they impose two restrictions on subsequent-run theaters: (1) a minimum admission price of 25 cents for adults, and (2) prohibition of showing the distributors’ “A” films as part of double features. The letter explicitly named all eight distributors as addressees, ensuring each knew the demands were being made to all. The distributors, who collectively controlled about 75% of all first-class feature films in the United States, uniformly complied with these demands in Dallas, Fort Worth, Houston, and San Antonio, though they unanimously rejected similar demands for other territories. These restrictions forced subsequent-run theaters to either significantly increase their prices (by 25% to 150%) and abandon double features, or forego showing the distributors’ popular films. The District Court found that the restrictions were imposed to protect Interstate’s monopoly position and resulted in deflecting attendance from subsequent-run theaters to Interstate’s first-run theaters.
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