The Paramount Antitrust Case

The Hollywood Antitrust Case (The Paramount Antitrust Case):
·       -  On May 3^rd 1948, the US Supreme Court decided the Paramount Antitrust Case, a long running government antitrust lawsuit against Paramount Pictures.

·         This Case was actually two major suits (and numerous minor ones). In result there were two "Paramount cases."

·         It effectively brought an end to the studio system and class cinema.

·         Before Paramount, there was a 1928 antitrust lawsuit brought by the Federal Trade commission against the Famous Players- Lasky Corporation (forerunner to paramount) and nine other major film studios.

·         They were declared guilty of violating antitrust law in 1930, however the studios were able to continue running as normal after making a controversial deal with the government.

·         In July 1938, the government took back its stance towards Hollywood and filed its lawsuit against seven major studios: Paramount, Universal, MGM, Twentieth Century- Fox, Warner Bros., Columbia and RKO.

·         The government’s case accused the studios of violating the Sherman Antitrust Act in their total control over movie distribution and exhibition (vertical integration. At the time, the studios controlled almost all the countries movie theatres. They did this through either ownership of their own theatre chains or block booking which was where independent theatre owners signed contracts with studios that meant they had to show a “block” of films.

·         The government was demanding that studios end block booking and get rid of their distribution arms or their theatres.

·         The case first went to trail in June 1940 but was called off when the government and studio attorneys comprised a deal where studios would keep their movie theatres but limit block booking.

·         This led to the formation of the Society of Independent Motion Picture Producers (SIMPP) by some of the leading movie producers of the time, including Charlie Chaplin, Walt Disney, Samuel Goldwyn, David O. Selznick, Mary Pickford and Orson Welles.

·         This then led to the government’s antitrust case being back into court in 1945. The case got taken to the U.S. Supreme court.

·         The trial proceeded quickly once it reached the Supreme Court in 1948.

·         On May 3^rd, the court issued its ruling, which confirmed the earlier verdicts and declared the studios guilty. The studios were made to sign consent decrees that would end block booking by requiring films to be sold on an individual basis.