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Antitrust Keyed to Areeda, 8th 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 Texas cities, controlling all first-run theaters and many subsequent-run theaters. In 1934, Interstate’s manager O’Donnell sent identical letters to 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) a prohibition on showing the distributors’ “A” films as part of double features. The letter explicitly named all eight distributors as addressees, ensuring each knew the others had received the same proposal. The distributors uniformly adopted these restrictions in four Texas cities, forcing subsequent-run theaters to either raise prices substantially (by 25% to 150%) and eliminate double features, or forego showing the distributors’ films. The restrictions were particularly harsh on smaller theaters that had previously charged lower admission prices and used double features to attract patrons. None of the distributors’ executives who negotiated the agreements testified at trial, though they were in the best position to know whether collusion had occurred.
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