In United States. General Electric Co. et al., the Government alleged, among other things, that the defendants either prevented or hindered the manufacturers of raw material and machinery employed in the manufacture of lamps from selling to competitive companies with the purpose and result of driving them out of business, or forcing them to sell out to the defendants or to join the combination. The General Electric Co. and the lamp-manufacturing defendants were enjoined from "making or carrying out directly or indirectly, any contracts with any manufacturer or manufacturers of lamp-making machinery, or with any manufacturer or manufacturers of bulbs and tubing for incandescent lamps, whereby such manufacturers, or any of them shall be bound not to sell the goods, manufactured by them, respectively, to others than the said defendants or any of them, or hindered from so doing or obligated to sell to the said defendants or any of them, at other and different prices and terms of payment than those to which they severally may sell to other purchasers." Section 25. Coercion, threats, and intimidation. THREATS TO ESTABLISH COMPETING PLANTS.-In United States v. Central-West Publishing Co. et al., the defendants were enjoined1 from threatening competitors of either of them that they must cease competing or sell out to one or the other of them, and from threatening that unless they did their industries would be destroyed by the establishment of near-by plants to actively compete with them, or by any other method of unfair competition." The above-named companies were also enjoined from threatening any customer of a competitor with starting a competing plant unless he patronized one or the other of the defendants." 66 1 Consent decree. * Cf. Petition in United States v. Corn Products Refining Co., in which it was alleged that the defendant "informed the various candy manufacturers throughout the country that it expected them to purchase a certain very large percentage of the glucose needed by them from the Corn Products Refining Company; that if said company did not get a suffi cient percentage of such glucose business, it would go into the candy manufacture itself in competition with such manufacturers," and that pursuant to this threat it acquired control of the Novelty Candy & Chocolate Co. for the purpose (among others) of retaliation against those manufacturing confectioners purchasing starch and glucose from independent manufacturers. And see Rice r. Standard Oil Co., 134 Fed., 464, 469 (C. C., 1905), where it was alleged, among other things, that the defendant and its associates operated “retail stores for the sale of groceries, oil, and other commodities in localities where retailers banded together and agreed to purchase and did purchase oil of the plaintiff, for the purpose of injuring such retailers and customers of the plaintiff by destroying their grocery or other business so long as they should buy oil of the plaintiff," and that they also sold groceries and merchandise "to the customers of the plaintiff's customers at such ruinous prices as to threaten ruin and loss to the plaintiff's customers." The court sustained a motion to dis miss the declaration on the ground that the averments were too vague, and observed that the plaintiff failed to name any of his customers who were thus affected. See also Standard Oil Co. v. Doyle, p. 459. THREATS TO SUE FOR INFRINGEMENT OF PATENTS.-The New Departure Manufacturing Co. and other corporations engaged in the manufacture and sale of bicycle accessories and parts, particularly coaster brakes, formed a combination to fix prices and for other purposes, the scheme being built around a system of licensing the sale and use of articles in the construction of which a basic patent was professedly necessary. On the dissolution of this combination at the suit of the Government these corporations were enjoined 1 from warning, harassing, or intimidating by means of personal acts, letters or advertisements any corporations or persons in relation to the sale, shipment, and trade in bicycle accessories and parts. By reference to the petition in this case it appears that the intimidation consisted of threats to sue jobbers and dealers for infringement in case they dealt in any coaster brake other than that of the members of the combination. Section 26. Miscellaneous. RETENTION OF COMPETITOR'S PROPERTY.-The Central-West Publishing Co., the Western Newspaper Union, and the Western Newspaper Union of New York were enjoined 1" from in any manner retaining or permitting the retention by their agents or employees of plate metal or other property belonging to the American Press Association, or other competitor," and the American Press Association was likewise prohibited from retaining property belonging to the Western Newspaper Union.2 PURCHASE OF STOCK FOR THE PURPOSE OF HARASSING A COMPETITOR.— The Western Newspaper Union, the Western Newspaper Union of New York, the Central-West Publishing Co., and certain individuals were enjoined from causing any person or company to purchase stock or become interested in the American Press Association, a competitor, for the purpose or with the effect of harassing said association by unconscionable or unreasonable demands for an examination of its books or inquiry into its business methods, or the institution of suits with such or like purpose in view.3 FEDERAL TRADE COMMISSION ACT AND OTHER ACTS RELATING TO METHODS OF COMPETITION. Section 27. Federal Trade Commission Act. In section 5 of the Federal Trade Commission Act, approved September 26, 1914, unfair methods of competition in commerce are declared unlawful and the Commission is empowered to prohibit the 1 Consent decree. Cf. Warren Mills r. New Orleans Seed Co., p. 408. Cf. Funck e. Farmers' Elevator Co. of Gowrie et al., p. 400; and Forrest v. Ry. Co., p. 461. use of such methods. The language of this section has been quoted in full on page 130. The substantive law of the section is as follows: SEC. 5. That unfair methods of competition' in commerce are hereby declared unlawful. The commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, and common carriers subject to the acts to regulate commerce, from using unfair methods of competition in com merce. Authority is given the commission to proceed under this law if in its opinion such action is in the public interest. Section 28. Clayton Antitrust Act. Sections 2 and 3 of the Clayton Act, approved October 15, 1914, prohibit certain practices to lessen competition with respect to price discrimination and exclusive contracts. The language of these two sections is as follows: SEC. 2. That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities, which commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly in any line of commerce: Provided, That nothing herein contained shall prevent discrimination in price between purchasers of commodities on account of differences in the grade, quality, or quantity of the commodity sold, or that makes only due allowance for difference in the cost of selling or transportation, or discrimination in price in the same or different communities made in good faith to meet competition: And provided further, That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade. Sic. 3. That it shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies or other commodities, whether pat In United States r Keystone Watch Cas› Co, et al, 218 Fod, 502, 518 (D. C., 1915), McPherson, Circult Judge, said in part: “Whatever makes it more difficult for such persons to carry on their business restrains them, and restrens their trade; but to speak gencrally) avevery successful effort of a merebant to incrise his own tride makes it harder for his rivals to succeed, and therefore restrains fair trade, and as Congress certainly did not intend to condemn the proper exercise of business real and energy, we must recur to the rule of rea on and ask -not nwrely what is restrait of trade, but what is unreasonable restraint of trade? On ts sub ect we are erts rly alle to say some things with con ful nee Competitors must not be of pressed or cocreed; frændul nt or unfair or oppressive # airy must not be pursued. And if these words are criticized as too general we may ready that such generality is apparently inavoidable, as some recent legislation of Congress testifies, and, moreover, we may safely deny t' at the w -1s are too Vigne for satisfactory fo, at tum t be pomen lend that toont 25, 22" et it of a ral op nion in the com duty furnishes an adequate guide to their practical weteng and their practical applicaThey are not likely to be misappreh nded or misapplied.” ented or unpatented, for use, consumption or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce. By section 11 the Federal Trade Commission is authorized to enforce compliance with sections 2 and 3 of the act. This legislation is of such recent date that there are as yet few decisions of courts to throw light on its construction or its application to concrete facts. In Elliott Machine Co. v. Center1 the defendant urged that section 3 of the Clayton Act was not retroactive and could not affect contracts entered into before its enactment. This contention was denied, Sessions, J., saying, in part: The statute does not in terms except from its operation any agreements or contracts, past, present or future, and in the absence of such exception, it is to be presumed that Congress intended to prohibit not only the making of future contracts but also the further performance of past contracts of the kind specified. ** It is now too well settled to admit of controversy that a contract to do a thing, lawful when made, may be avoided by subsequent legislation making it unlawful and that an Act of Congress may lawfully affect rights which had their inception before its passage.” In Sperry & Hutchinson Co. e. Fenster et al." it appeared that the plaintiff issued trading stamps to subscribers who agreed to distribute the stamps only to customers, and that the defendants obtained such stamps from subscribers under conditions equivalent to a purchase and gave them to their own customers as an inducement for trading. On an application for a preliminary injunction the defendants contended that the plaintiff's practice of seeking to enjoin and in certain States to prosecute dealers using such stamps without having subscribed for the right so to do, and without having obtained the stamps by payment to the issuing company, is contrary to the decisions of the United States Supreme Court and to the provisions of the laws forbidding monopoly. Chatfield, J., issued & temporary injunction, saying, in part: 1227 Fed., 124 (D. C., 1915). 2 Citing L. & N. R. R. Co. r. Mottley, 219 U. S., 467 (1911); Armour Packing Co. r. C. S., 209 U. S., 56 (1908); P. B. & W. R. R. Co. r. Schubert, 224 U. S., 603 (1912); Addyston Pipe & Steel Co. r. U. S., 175 U. S., 211 (1899); Portland Ry. Co. v. Öregon R. R. Comm., 229 U. S., 397 (1913); A. C. L. R. Co. v. Finn, 195 Fed., 685 (C. C. A., 1912); Holt r. Henley, 193 Fed., 1020 (C. C. A., 1912). 219 Fed., 755, 756 (D. C., 1915). 30035-16-32 This statute [Clayton Act, sec. 3] forbids the converse of the acts complained of in the present action, and we have nothing to do with what might happen if the Green trading stamp people were seeking to forbid the use by its subscribers of any other kind of trading stamps. This might or might not be a restriction upon competition or tend to effect a monopoly.1 Section 29. The Act to Regulate Commerce. In addition to the above, the provisions of the interstate-commerce law 2 making it a crime for a railroad to give, or for a shipper to receive, a rebate from the published tariffs of the railroads, as well as those provisions prohibiting unjust discrimination and the giving of undue preference to any shipper, may be regarded as directed at one form of unfair competition. A shipper who secures a lower rate than is enjoyed by his competitors, or who obtains an undue preference in some other form, is frequently in a position to exclude them from certain territory and thus to deprive the public entirely of competition in the particular locality. The administration of these provisions of the interstate-commerce law respecting rebates, unjust discriminations, and undue preferences is in large measure conferred on the Interstate Commerce Commission, and their enforcement is lodged with the said Commission and the courts. No attempt will be made in this report to summarize the decisions construing these pro- . visions, but the portions of the statutes quoted below will serve to give a general idea of the unfair advantages in competition which it was intended to prevent: * if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful. ** it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." it shall be unlawful for any person, persons, or corporation to offer, grant, or give, or to solicit, accept or receive any rebate, concession, or discrimination in respect to the transportation of any property in interstate or 1 Cf. Merchants' Legal Stamp Co. r. Murphy et al., p. 150u 24 U. S. Stats., pp. 379–380. |